EXHIBIT 10.3.1
[EXECUTION COPY]
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MOBILE MINI, INC.
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated: February 11, 2002
Amended and Restated: June 26, 2003
$250,000,000
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FLEET CAPITAL CORPORATION
Individually and as Agent for any Lender which is
or becomes a Party hereto
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FLEET SECURITIES, INC.
and
DEUTSCHE BANK SECURITIES INC.
as Co-Lead Arrangers and Book Managers
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DEUTSCHE BANK SECURITIES INC.
and
WASHINGTON MUTUAL BANK
as Co-Documentation Agents
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BANK ONE, NA
and
XX XXXXXX XXXXX BANK
as Co-Syndication Agents
TABLE OF CONTENTS
SECTION 1. CREDIT FACILITY........................................................................... 2
1.1 Revolving Credit Facility................................................................ 2
1.2 Letters of Credit; LC Guaranties......................................................... 3
SECTION 2. INTEREST, FEES AND CHARGES................................................................. 4
2.1 Interest................................................................................. 4
2.2 Computation of Interest and Fees......................................................... 5
2.3 Fee Letter............................................................................... 5
2.4 Letter of Credit and LC Guaranty Fees.................................................... 5
2.5 Unused Line Fee.......................................................................... 6
2.6 [intentionally omitted].................................................................. 6
2.7 Audit Fees............................................................................... 6
2.8 Reimbursement of Expenses................................................................ 7
2.9 Bank Charges............................................................................. 7
2.10 Collateral Protection Expenses........................................................... 7
2.11 Payment of Charges....................................................................... 8
SECTION 3. LOAN ADMINISTRATION........................................................................ 8
3.1 Manner of Borrowing Revolving Credit Loans; Swing Line Loan.............................. 8
3.2 Payments................................................................................. 13
3.3 Mandatory and Optional Prepayments....................................................... 14
3.4 Application of Payments and Collections.................................................. 16
3.5 All Loans to Constitute One Obligation................................................... 16
3.6 Loan Account............................................................................. 16
3.7 Statements of Account.................................................................... 17
3.8 Sharing of Payments, Etc................................................................. 17
3.9 Increased Costs; Taxes................................................................... 17
3.10 Basis for Determining Interest Rate Inadequate or Unfair................................. 20
SECTION 4. TERM AND TERMINATION....................................................................... 21
4.1 Term of Agreement........................................................................ 21
4.2 Termination.............................................................................. 21
4.3 Effect of Termination.................................................................... 22
SECTION 5. SECURITY INTERESTS......................................................................... 22
5.1 Security Interest in Collateral.......................................................... 22
5.2 Other Collateral......................................................................... 24
5.3 Lien Perfection; Further Assurances...................................................... 24
5.4 Lien on Realty........................................................................... 00
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XXXXXXX 0. COLLATERAL ADMINISTRATION.................................................................. 25
6.1 General.................................................................................. 25
6.2 Administration of Accounts............................................................... 27
6.3 Records and Reports of Inventory, Machinery and Equipment................................ 28
6.4 Administration of Equipment.............................................................. 28
6.5 Appraisals............................................................................... 29
6.6 Field Examinations....................................................................... 29
SECTION 7. REPRESENTATIONS AND WARRANTIES............................................................. 29
7.1 General Representations and Warranties................................................... 29
7.2 Continuous Nature of Representations and Warranties...................................... 36
7.3 Survival of Representations and Warranties............................................... 37
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS........................................................ 37
8.1 Affirmative Covenants.................................................................... 37
8.2 Negative Covenants....................................................................... 41
8.3 Specific Financial Covenants............................................................. 50
SECTION 9. CONDITIONS PRECEDENT....................................................................... 51
9.1 Documentation............................................................................ 51
9.2 No Default; Representations and Warranties............................................... 51
9.3 No Litigation............................................................................ 51
9.4 Material Adverse Effect.................................................................. 51
9.5 Cash Management System; Lockboxes........................................................ 51
9.6 Lien Perfection; Title Insurance......................................................... 52
9.7 Insurance................................................................................ 52
9.8 Senior Notes............................................................................. 52
9.9 Opinions................................................................................. 52
9.10 Existing Credit Agreement................................................................ 52
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT......................................... 53
10.1 Events of Default........................................................................ 53
10.2 Acceleration of the Obligations.......................................................... 55
10.3 Other Remedies........................................................................... 56
10.4 Set Off and Sharing of Payments.......................................................... 57
10.5 Remedies Cumulative; No Waiver........................................................... 57
SECTION 11. THE AGENT................................................................................. 58
11.1 Authorization and Action................................................................. 58
11.2 Agent's Reliance, Etc.................................................................... 59
11.3 Fleet and Affiliates..................................................................... 60
11.4 Lender Credit Decision................................................................... 60
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11.5 Indemnification.......................................................................... 60
11.6 Rights and Remedies to be Exercised by Agent Only........................................ 61
11.7 Agency Provisions Relating to Collateral................................................. 61
11.8 Agent's Right to Purchase Commitments.................................................... 62
11.9 Right of Sale, Assignment, Participations................................................ 62
11.10 Amendments............................................................................... 63
11.11 Resignation of Agent; Appointment of Successor........................................... 64
11.12 Co-Agents................................................................................ 65
SECTION 12. MISCELLANEOUS............................................................................. 65
12.1 Power of Attorney........................................................................ 65
12.2 Indemnity................................................................................ 66
12.3 Sale of Interest......................................................................... 66
12.4 Severability............................................................................. 66
12.5 Successors and Assigns................................................................... 66
12.6 Cumulative Effect; Conflict of Terms..................................................... 66
12.7 Execution in Counterparts; Effectiveness................................................. 67
12.8 Notices.................................................................................. 67
12.9 Consent.................................................................................. 68
12.10 Credit Inquiries......................................................................... 68
12.11 Time of Essence.......................................................................... 68
12.12 Entire Agreement......................................................................... 68
12.13 Interpretation........................................................................... 68
12.14 Confidentiality.......................................................................... 69
12.15 GOVERNING LAW; CONSENT TO FORUM.......................................................... 69
12.16 WAIVERS BY BORROWER...................................................................... 70
12.17 Increases In Total Revolving Loan Commitments............................................ 70
12.18 Existing Loan Agreement And Loan Documents............................................... 72
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as
of February 11, 2002 and amended and restated as of this 26th day of June, 2003,
by and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island corporation
with an office at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx
00000, individually as a Lender and as Agent ("Agent") for itself and any other
financial institution which is or becomes a party hereto (each such financial
institution, including Fleet, is referred to hereinafter individually as a
"Lender" and collectively as the "Lenders"), the LENDERS and MOBILE MINI, INC.,
a Delaware corporation with its chief executive office and principal place of
business at 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000
("Borrower"), DEUTSCHE BANK SECURITIES INC. and WASHINGTON MUTUAL BANK, as
Co-Documentation Agents, and BANK ONE, NA and XX XXXXXX CHASE BANK, as
Co-Syndication Agents. Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms
not otherwise specifically defined herein shall be construed in accordance with
GAAP consistently applied.
WHEREAS, Borrower, certain lenders (the "Prior Lenders"), Bank
of America, N.A. and Washington Mutual Bank, as Co-Documentation Agents, and
Bank One, N.A. and XX Xxxxxx Xxxxx Bank, as Co-Syndication Agents, and the Agent
are parties to that certain Loan and Security Agreement dated as of February 11,
2002, as amended by that certain First Amendment to Loan and Security Agreement
and Consent to Acquisition dated as of June 27, 2002 and that certain Waiver and
Second Amendment to Loan and Security Agreement dated as of September 30, 2002
(collectively, the "Existing Loan Agreement");
WHEREAS, concurrently herewith, Borrower is issuing its Senior
Notes due 2013 in the aggregate principal amount of $150,000,000 pursuant to the
Senior Note Indenture, the net proceeds of which will be used to repay certain
of the outstanding Obligations;
WHEREAS, immediately prior to the effectiveness of this
Agreement, certain of the Prior Lenders and certain of the Lenders have entered
into the Master Assignment Agreement;
WHEREAS, Borrower, the Lenders and the Agent wish to amend the
Existing Loan Agreement and restate it in its entirety;
WHEREAS, effective as of the Restatement Date, all Obligations
of Borrower under and as defined in the Existing Loan Agreement shall be deemed
to be Obligations under this Agreement and all provisions of this Agreement not
theretofore in effect shall become effective;
NOW, THEREFORE, in consideration of the above recitals and the
mutual agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
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SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon
the representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a Total Credit Facility of up to $250,000,000
available upon Borrower's request therefor, as follows:
1.1 Revolving Credit Facility.
1.1.1 Revolving Credit Loans. Each Lender agrees, effective
as of the Restatement Date, severally and not jointly, to (i) maintain its
Existing Revolving Credit Loans (which shall be treated as Revolving Credit
Loans for all purposes of this Agreement and the other Loan Documents) and (ii)
for so long as no Default or Event of Default exists and if the conditions set
forth in Section 9 are satisfied, to make Revolving Credit Loans to Borrower
from time to time during the period from the date hereof to but not including
the last day of the Term, as requested by Borrower in the manner set forth in
Subsection 3.1.1 hereof, up to a maximum principal amount at any time
outstanding equal to the lesser of (i) such Lender's Revolving Loan Commitment
minus such Lender's Revolving Loan Percentage of the sum of (x) the LC Amount
and (y) all unpaid LC Obligations and (ii) the product of such Lender's
Revolving Loan Percentage and an amount equal to the Borrowing Base at such time
minus the sum of (x) the LC Amount and (y) all unpaid LC Obligations minus the
Availability Reserve and minus other reserves, if any; provided that the
aggregate amount of the Revolving Loans plus the LC Amount plus all unpaid LC
Obligations shall not exceed the amount of secured Indebtedness permitted to be
outstanding hereunder under the terms of the Senior Note Documents. In addition
to the Availability Reserve, Agent shall have the right to establish other
reserves in such amounts, and with respect to such matters, as Agent shall
reasonably deem necessary or appropriate in its reasonable credit judgment
exercised in good faith, against the amount of Revolving Credit Loans which
Borrower may otherwise request under this Subsection 1.1.1 with respect to (i)
price adjustments, damages, unearned discounts, returned products or other
matters for which credit memoranda are issued in the ordinary course of business
of Borrower and its Subsidiaries; (ii) shrinkage, spoilage and obsolescence of
Inventory; (iii) other sums chargeable against Borrower's Loan Account as
Revolving Credit Loans under any section of this Agreement; (iv) liabilities and
clean up costs under Environmental Laws; and (v) such other specific events,
conditions or contingencies as to which Agent, in its reasonable credit judgment
exercised in good faith, determines reserves should be established from time to
time hereunder. Notwithstanding the foregoing, Agent shall not establish any
reserves in respect of any matters relating to any items of Collateral that have
been specifically taken into account in determining eligibility of any category
of assets or the amount or value thereof for determining the Borrowing Base. The
Revolving Credit Loans shall be further evidenced by, and repayable in
accordance with the terms of, the Revolving Notes and shall be secured by all of
the Collateral.
1.1.2 [intentionally omitted]
1.1.3 Use of Proceeds. The Revolving Credit Loans shall be
used solely for (i) general operating capital needs (including Capital
Expenditures) of Borrower and its
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Subsidiaries in a manner consistent with the provisions of this Agreement and
all applicable laws, and (ii) for other purposes permitted under this Agreement.
1.2 Letters of Credit; LC Guaranties. Agent agrees, for so long as
no Default or Event of Default exists and if requested by Borrower, to (i) issue
its, or cause to be issued by Bank or another Affiliate of Agent, on the date
requested by Borrower, Letters of Credit for the account of Borrower or any
Guarantor or (ii) execute LC Guaranties by which Bank, or another Affiliate of
Bank, on the date requested by Borrower, shall guaranty the payment or
performance by Borrower of its reimbursement obligations with respect to Letters
of Credit and letters of credit issued with the prior approval of Agent for
Borrower's account by other Persons in support of Borrower's or any of its
Subsidiaries' obligations (other than obligations for the repayment of money
borrowed), provided that the sum of the LC Amount plus all unpaid LC Obligations
shall not exceed $10,000,000 at any time. No documentary Letter of Credit or LC
Guaranty of a documentary letter of credit may have an expiration date that is
more than 180 days after the date of issuance thereof and all such documentary
Letters of Credit shall be payable at sight; and no standby Letter of Credit or
LC Guaranty of a standby letter of credit may have an expiration date that is
more than one year from the date of issuance thereof, which expiration date may
be extended for additional periods of up to one year for each additional period,
subject to the immediately following sentence. No Letter of Credit or LC
Guaranty may have an expiration date that is after the last day of the Term.
Notwithstanding anything to the contrary contained herein, Borrower, Agent and
Lenders hereby agree that all LC Obligations and all Obligations of Borrower
relating thereto shall be satisfied by the prompt issuance of one or more
Revolving Credit Loans that are Base Rate Portions, which Borrower hereby
acknowledges are requested and Lenders hereby agree to fund. In the event that
Revolving Credit Loans are not, for any reason, promptly made to satisfy all
then existing LC Obligations, each Lender hereby agrees to pay to Agent, on
demand, an amount equal to such LC Obligations multiplied by such Lender's
Revolving Loan Percentage, and until so paid, such amount shall be secured by
the Collateral and shall bear interest and be payable at the same rate and in
the same manner as Base Rate Portions. Immediately upon the issuance of a Letter
of Credit or an LC Guaranty under this Agreement, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from Agent, without
recourse or warranty, an undivided interest and participation therein equal to
such LC Obligations multiplied by such Lender's Revolving Loan Percentage. All
Letters of Credit and LC Guaranties outstanding under the Existing Credit
Agreement and all LC Obligations relating thereto shall, from and after the
Restatement Date, be deemed to be outstanding under this Agreement.
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest. Interest shall accrue on the
principal amount of the Base Rate Portions outstanding at the end of each day at
a fluctuating rate per annum equal to the Applicable Margin then in effect plus
the Base Rate. Said rate of interest shall increase or decrease by an amount
equal to any increase or decrease in the Base Rate, effective as of the opening
of business on the day that any such change in the Base Rate occurs. Interest
shall accrue on the principal amount of each of the LIBOR Advances outstanding
at the end of each
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day at a fixed rate per annum equal to the Applicable Margin then in effect plus
the LIBOR for the applicable Interest Period.
2.1.2 Default Rate of Interest. At the option of Agent or
the Majority Lenders, upon and after the occurrence of an Event of Default, and
during the continuation thereof, the principal amount of all Loans shall bear
interest at a rate per annum equal to 2.0% plus the interest rate otherwise
applicable thereto (the "Default Rate"). Such Default Rate shall apply
automatically in the case of a Default under Section 10.1.9.
2.1.3 Maximum Interest. In no event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under the Revolving Notes
and charged or collected pursuant to the terms of this Agreement or pursuant to
the Revolving Notes exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. If any provisions of this Agreement or the Revolving Notes are in
contravention of any such law, such provisions shall be deemed amended to
conform thereto.
2.2 Computation of Interest and Fees. Interest, Letter of Credit
and LC Guaranty fees and Unused Line Fees hereunder shall be calculated daily
and shall be computed on the actual number of days elapsed over a year of 360
days.
2.3 Fee Letter. Borrower shall pay to Agent certain fees and other
amounts in accordance with the terms of the fee letter between Borrower and
Agent (the "Fee Letter").
2.4 Letter of Credit and LC Guaranty Fees. Borrower shall pay to
Agent, for the ratable benefit of the Lenders, a fee equal to the Applicable
Margin then in effect for LIBOR Advances per annum multiplied by the aggregate
face amount of all Letters of Credit and LC Guaranties outstanding from time to
time during the term of this Agreement, which fees shall be payable monthly in
arrears on the first day of each month hereafter, and, in the case of standby
and documentary Letters of Credit (and the related LC Guaranties) all normal and
customary charges of Bank associated with the issuance of such Letters of Credit
and LC Guaranties for the account of borrowers with creditworthiness similar to
Borrower's, which fees and charges shall be deemed fully earned and shall be due
and payable upon issuance of each such Letter of Credit or LC Guaranty and shall
not be subject to rebate or proration upon the termination of this Agreement for
any reason. At the option of Agent or the Majority Lenders, upon and after the
occurrence of an Event of Default, and during the continuation thereof, the fee
shall increase to the Applicable Margin then in effect for LIBOR Advances per
annum plus two percent (2%) multiplied by the aggregate face amount of all
Letters of Credit and LC Guaranties outstanding at such time.
2.5 Unused Line Fee. Borrower shall pay to Agent, for the ratable
benefit of the Lenders, a fee (the "Unused Line Fee") equal to the amount by
which the Total Credit Facility exceeds the average daily amount of the Facility
Utilization for the preceding month multiplied by the percentage set forth below
opposite the applicable Facility Utilization percentage:
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Facility Utilization Unused Line Fee
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< than = 33.33% 0.50%
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> 33.33% but 0.375%
< 66.66%
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> than = 66.66% 0.30%
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Notwithstanding the foregoing, from the Restatement Date until
December 31, 2003, the Unused Line Fee shall not be less than 0.375%. The Unused
Line Fee shall be payable monthly in arrears on the first day of each month
hereafter.
2.6 [intentionally omitted]
2.7 Audit Fees. Borrower shall pay to Agent all reasonable
out-of-pocket expenses incurred by Agent in connection with audits of the books
and records and Properties of Borrower and its Subsidiaries and Affiliates and
such other matters as Agent shall deem appropriate in its reasonable credit
judgment, whether such audits are conducted by employees of Agent or by third
parties hired by Agent. Agent shall use commercially reasonable efforts to cause
such audits to be conducted by its own employees whenever feasible. The
out-of-pocket expenses incurred in connection with the audits shall be payable
as incurred and following the issuance by Agent of a request for payment thereof
to Borrower.
2.8 Reimbursement of Expenses. If, at any time or times regardless
of whether or not an Event of Default then exists, (i) Agent or Fleet Securities
Inc. incurs legal or accounting expenses or any other costs or out-of-pocket
expenses in connection with (1) the negotiation and preparation of this
Agreement or any of the other Loan Documents, any amendment of or modification
of this Agreement or any of the other Loan Documents, the syndication of the
Loans or any other sale or attempted sale of any interest herein to any assignee
(including, without limitation, printing and distribution of materials to
prospective Lenders and all costs associated with bank meetings) or (2) the
administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; or (ii) Agent or any Lender incurs
legal or accounting expenses or any other costs or out-of-pocket expenses in
connection with (1) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) relating
to the Collateral, this Agreement or any of the other Loan Documents or
Borrower's, any of its Subsidiaries' or any Guarantor's affairs; (2) any attempt
to enforce any rights of Agent or any Lender against Borrower, any Guarantor or
any other Person which may be obligated to Agent or any Lender by virtue of this
Agreement or any of the other Loan Documents, including, without limitation, the
Account Debtors; or (3) after the occurrence of an Event of Default and during
the continuance thereof, any attempt to inspect, verify, protect, preserve,
restore, collect, sell, liquidate or otherwise dispose of or realize upon the
Collateral; then all such legal and accounting expenses (including allocated
costs of in-house counsel in lieu of outside counsel), other costs and out of
pocket expenses of Agent or (in the case of clause (ii) only) any Lender, as
applicable, shall be charged to Borrower; provided, that Borrower shall
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not be responsible for such costs and out-of-pocket expenses of any Person to
the extent incurred because of the gross negligence or willful misconduct of
such Person. Borrower shall also reimburse Agent for expenses incurred by Agent
in its administration of the Collateral to the extent and in the manner provided
in Section 2.10 hereof.
2.9 Bank Charges. Borrower shall pay to Agent any and all fees,
costs or expenses which Agent pays to a bank or other similar institution
arising out of or in connection with (i) the forwarding to Borrower or any other
Person on behalf of Borrower by Agent of proceeds of Loans made to Borrower
pursuant to this Agreement and (ii) the depositing for collection by Agent of
any check or item of payment received or delivered to Agent on account of the
Obligations.
2.10 Collateral Protection Expenses. All out-of-pocket expenses
incurred in protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral, any and all excise, property, sales, and use taxes
imposed by any state, federal, or local authority on any of the Collateral or in
respect of the sale thereof shall be borne and paid by Borrower. If Borrower
fails to promptly pay any portion thereof when due, Agent may, at its option,
but shall not be required to, pay the same and charge Borrower therefore.
2.11 Payment of Charges. All amounts chargeable to Borrower under
this Agreement shall be Obligations secured by all of the Collateral, shall be,
unless specifically otherwise provided, payable on demand and shall bear
interest from the date demand was made or such amount is due, as applicable,
until paid in full at the rate applicable to Base Rate Portions from time to
time.
SECTION 3. LOAN ADMINISTRATION.
3.1 Manner of Borrowing Revolving Credit Loans; Swing Line Loan.
Borrowings under the credit facility established pursuant to Section 1 hereof
shall be as follows:
3.1.1 Loan Requests. A request for a Revolving Credit Loan
shall be made, or shall be deemed to be made, in the following manner: (i)
Borrower may give Agent notice of its intention to borrow, in which notice
Borrower shall specify the amount of the proposed borrowing and the proposed
borrowing date, no later than 10:00 a.m. Los Angeles time on the proposed
borrowing date (or in accordance with Section 3.1.5 in the case of a request for
a LIBOR Advance), provided, however, that no such request may be made at a time
when there exists a Default or an Event of Default or other conditions set forth
in Section 9 are not satisfied; and (ii) the becoming due of any amount required
to be paid under this Agreement, or the Revolving Notes, whether as interest or
for any other Obligation, shall be deemed irrevocably to be a request for a
Revolving Credit Loan on the due date in the amount required to pay such
interest or other Obligation.
3.1.2 Disbursement. Borrower hereby irrevocably authorizes
Agent to disburse the proceeds of each Revolving Credit Loan requested, or
deemed to be requested, pursuant to Subsection 3.1.1 as follows: (i) the
proceeds of each Revolving Credit Loan requested under Subsection 3.1.1 and each
Swing Line Loan shall be disbursed by Agent in lawful money of the United States
of America in immediately available funds, in the case of
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the initial borrowing, in accordance with the terms of the written disbursement
letter from Borrower, and in the case of each subsequent borrowing, by wire
transfer to such bank account as may be agreed upon by Borrower and Agent from
time to time or elsewhere if pursuant to a written direction from Borrower; and
(ii) the proceeds of each Revolving Credit Loan deemed requested under
Subsection 3.1.1(ii) shall be disbursed by Agent by way of direct payment of the
relevant interest or other Obligation.
3.1.3 Payment by Lenders. Unless Agent elects to make a
Swing Line Loan in accordance with Subsection 3.1.11, Agent shall give to each
Lender prompt written notice electronically or by facsimile, or telecopy of the
receipt by Agent from Borrower of any request for a Revolving Credit Loan. Each
such notice shall specify the requested date and amount of such Revolving Credit
Loan, whether such Revolving Credit Loan shall be a LIBOR Advance, and the
amount of each Lender's advance thereunder (in accordance with its applicable
Revolving Loan Percentage). If Agent gives notice, electronically or facsimile,
to a Lender by noon (Los Angeles time), each Lender shall, not later than 1:00
p.m. (Los Angeles time) on such requested date (or on the next Business Day if
Agent gives later notice), wire to a bank designated by Agent the amount of that
Lender's Revolving Loan Percentage of the requested Revolving Credit Loan. The
failure of any Lender to make the Revolving Credit Loans to be made by it shall
not release any other Lender of its obligations hereunder to make its Revolving
Credit Loan. Neither Agent nor any other Lender shall be responsible for the
failure of any other Lender to make the Revolving Credit Loan to be made by such
other Lender. The foregoing notwithstanding, Agent, in its sole discretion, may
from its own funds make a Revolving Credit Loan on behalf of any Lender. In such
event, the Lender on behalf of whom Agent made the Revolving Credit Loan shall
reimburse Agent for the amount of such Revolving Credit Loan made on its behalf
on the next Business Day. The entire amount of interest attributable to such
Revolving Credit Loan for the period from the date on which such Revolving
Credit Loan was made by Agent on such Lender's behalf until Agent is reimbursed
by such Lender, shall be paid to Agent for its own account.
3.1.4 Authorization. Borrower hereby irrevocably authorizes
Agent to advance to Borrower, and to charge to Borrower's Loan Account hereunder
as a Revolving Credit Loan, a sum sufficient to pay all interest accrued on the
Obligations during the immediately preceding month and to pay all fees, costs
and expenses and other Obligations at any time owed by Borrower to Agent or any
Lender hereunder.
3.1.5 LIBOR Advances. Notwithstanding the provisions of
Subsection 3.1.1, in the event Borrower desires to obtain a LIBOR Advance,
Borrower shall give Agent prior, written, irrevocable notice no later than 10:00
a.m. Los Angeles time on the 3rd Business Day prior to the requested borrowing
date specifying (i) Borrower's election to obtain a LIBOR Advance, (ii) the date
of the proposed borrowing (which shall be a Business Day) and (iii) the amount
to be borrowed, which amount shall be in a minimum principal amount of
$2,000,000 and may increase in integral multiples of $100,000. In no event shall
Borrower be permitted to have outstanding at any one time LIBOR Advances with
more than eight (8) different Interest Periods.
3.1.6 Conversion of Base Rate Advances. Provided that no
Default or Event of Default has occurred which is then continuing, Borrower may,
on any Business Day,
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convert any Revolving Credit Loan which is a Base Rate Advance into a LIBOR
Advance. If Borrower desires to convert such a Base Rate Advance, Borrower shall
give Agent not less than three (3) Business Days' prior written notice (prior to
10:00 a.m. Los Angeles time on such Business Day), specifying the date of such
conversion and the amount to be converted; provided that only two (2) Business
Days' notice shall be required to convert the Loans made on the Restatement
Date. Each conversion into or conversion of a LIBOR Advance shall be in a
minimum principal amount of $2,000,000 and may increase in integral multiples of
$100,000 in excess thereof. After giving effect to any conversion of Base Rate
Advances to LIBOR Advances, Borrower shall not be permitted to have outstanding
at any one time LIBOR Advances with more than eight (8) different Interest
Periods.
3.1.7 Continuation of LIBOR Advances. Borrower shall have
the right on three (3) Business Days' prior irrevocable written notice given to
Agent by Borrower (prior to 10:00 a.m. Los Angeles time on such Business Day),
subject to the provisions hereof, to continue any LIBOR Advance into a
subsequent Interest Period of the same or a different permitted duration, in
each case subject to the satisfaction of the following conditions:
(i) in the case of a continuation of
less than all LIBOR Advances, the LIBOR Advances continued
shall each be in a minimum principal amount of $2,000,000 and
may increase in integral multiples of $100,000; and
(ii) no LIBOR Advance (or portion
thereof) may be continued as a LIBOR Advance if a Default or
Event of Default has occurred which is then continuing or if,
after giving effect to such continuation, Borrower shall have
outstanding more than eight (8) separate LIBOR Advances in the
aggregate.
If Borrower shall fail to give timely notice of its election
to continue any LIBOR Advance or portion thereof as provided above, or if such
continuation shall not be permitted, such LIBOR Advance or portion thereof,
unless such LIBOR Advance shall be repaid, shall automatically be converted into
a Base Rate Advance at the end of the Interest Period then in effect with
respect to such LIBOR Advance.
3.1.8 Inability to Make LIBOR Advances. Notwithstanding any
other provision hereof, if any (i) change in applicable law, treaty, regulation
or directive, or any change in the interpretation or application thereof, shall
make it unlawful for any Lender (for purposes of this Subsection 3.1.8, the term
"Lender" shall include the office or branch where a Lender or any corporation or
bank then controlling such Lender makes or maintains any LIBOR Advances) to make
or maintain its LIBOR Advances, or (ii) if with respect to any Interest Period,
Agent is unable to determine the LIBOR relating thereto, or (iii) adverse or
unusual conditions in, or changes in applicable law relating to, the London
interbank market make it, in the reasonable judgment of a Lender, impracticable
to fund therein any of the LIBOR Advances, or (iv) if Majority Lenders shall, at
least one Business Day before the requested date of any Borrowing hereunder,
notify Agent that the projected LIBOR is unreflective of the actual costs of
funds therefore to such Lenders, the obligation of the affected Lender (or in
the case of clauses (ii) and (iv), all Lenders) to make LIBOR Advances
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hereunder shall forthwith be suspended during the pendency of such circumstances
and Borrower shall, if any affected LIBOR Advances are then outstanding,
promptly upon request from such Lender, convert such affected LIBOR Advances
into Base Rate Advances; provided, that if Borrower receives a notice pursuant
to clauses (iii) or (iv), so long as no Default or Event of Default shall have
occurred and be continuing and Borrower has obtained a commitment from another
Lender or other financial institution, acceptable to Agent in its reasonable
discretion, to become a Lender for all purposes under this Agreement and to
assume all obligations of the Lender to be replaced, at any time after receipt
of such notice and while the circumstances causing LIBOR not to be available,
Borrower may require the Lender giving such notice to assign all of its Loans,
Revolving Loan Commitments and other Obligations to such other Lender or
financial institution pursuant to the provisions of Subsection 11.9; provided
further that, prior to or concurrently with such replacement (x) Borrower has
paid to the Lender giving such notice all principal, interest, fees and other
amounts due and owing to such Lender through such date of replacement, (y) Agent
has received the processing and recordation fee required to be paid by
Subsection 11.9.1, and (z) all of the requirements for such assignment contained
in Subsection 11.9, including, without limitation, the receipt by Agent of an
executed assignment and assumption agreement and other supporting documents,
have been fulfilled.
3.1.9 Letter of Credit and LC Guaranty Requests. A request
for a Letter of Credit or LC Guaranty shall be made in the following manner:
Borrower may give Agent and Bank a written notice of its request for the
issuance of a Letter of Credit or LC Guaranty, not later than 10:00 a.m. Los
Angeles time, one Business Day before the proposed issuance date thereof, in
which notice Borrower shall specify the proposed issuer, issuance date and
format and wording for the Letter of Credit or LC Guaranty being requested
(which shall be satisfactory to Agent and the Person being asked to issue such
Letter of Credit or LC Guaranty); provided, that no such request may be made at
a time when there exists a Default or Event of Default or other conditions set
forth in Section 9 are not satisfied. Such request shall be accompanied by an
executed application and reimbursement agreement in form and substance
satisfactory to Agent and the Person being asked to issue the Letter of Credit
or LC Guaranty, as well as any required resolutions.
3.1.10 Method of Making Requests. As an accommodation to
Borrower, unless a Default or an Event of Default is then in existence, (i)
Agent shall permit telephonic requests for Revolving Credit Loans to Agent, (ii)
Agent and Bank may, in their discretion, permit electronic transmittal of
requests for Letters of Credit and LC Guaranties to them, and (iii) Agent may,
in Agent's discretion, permit electronic transmittal of instructions,
authorizations, agreements or reports to Agent. Unless Borrower specifically
directs Agent or Bank in writing not to accept or act upon telephonic or
electronic communications from Borrower, neither Agent nor Bank nor any Lender
shall have any liability to Borrower for any loss or damage suffered by Borrower
as a result of Agent's or Bank's honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been
sent to Agent or Bank by an authorized officer of Borrower, and neither Agent
nor Bank shall have any duty to verify the origin of any such communication or
the authority of the person sending it. Each telephonic request for a Revolving
Credit Loan, Letter of Credit or LC
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Guaranty accepted by Agent and Bank, if applicable, hereunder shall be promptly
followed by a written confirmation of such request from Borrower to Agent and
Bank, if applicable.
3.1.11 Swing Line Loans; Settlement Procedures. In order to
facilitate the administration of the Revolving Credit Loans, notwithstanding the
provisions of Subsection 3.1.3, Agent may make Revolving Credit Loans on behalf
of the Lenders (each, a "Swing Line Loan"); provided that the Agent shall not
make any Swing Line Loan if the aggregate outstanding principal amount of all
Swing Line Loans (taking into account the Loan to be made and any repayments
received on such date) would exceed $10,000,000, and settlement will be made
among the Lenders and the Agent in accordance with this Subsection 3.1.11. Each
Lender's obligation to fund its Revolving Loan Percentage of each Swing Line
Loan shall commence on the date on which such Swing Line Loan is made by Agent,
and each Lender shall be deemed to have irrevocably and unconditionally
purchased a participation in such Swing Line Loan in an amount equal to its
Revolving Credit Percentage of the Swing Line Loan. All Swing Line Loans shall
be Base Rate Advances, and interest accrued on the Swing Line Loans shall be for
the account of the Agent until settlement is made in accordance with this
Section. Settlement of all Swing Line Loans in excess of $1,000,000 (or such
lesser amount as required by Agent) shall be made weekly on the date (each, a
"Settlement Date") selected by Agent and in any event on the date on which the
outstanding balance of the Swing Line Loans shall have increased or decreased
since the last Settlement Date by $10,000,000 or more, or more frequently if
Agent elects. Agent will advise each Lender electronically or by telephone,
facsimile or telecopy of its Revolving Loan Percentage of the Swing Line Loans,
and in the event that payments are necessary to be made so that each Lender has
funded Revolving Credit Loans equal to its Revolving Loan Percentage of all
outstanding Revolving Credit Loans, each Lender shall transfer such amount to
Agent, or Agent shall transfer such amount to each Lender, in immediately
available funds no later than 1 p.m. (Los Angeles time) on the Settlement Date
if Agent has delivered notice prior to noon (Los Angeles time) on the Settlement
Date or by l1:00 a.m. (Los Angeles time) on the next Business Day if notice is
given later. Settlements shall be made whether or not any Default or Event of
Default exists and whether or not the conditions to Revolving Credit Loans have
been met; provided however, that notwithstanding the foregoing, a Lender shall
not have any obligation to acquire a participation in a Swing Line Loan pursuant
to this Section 3.1.11 if a Default or Event of Default existed or any
conditions precedent to making Loans were not satisfied at the time such Swing
Line Loan was made and such Lender shall have notified the Agent in writing, at
least one Business Day prior to the time such Swing Line Loan was made, that the
foregoing circumstances existed and that such Lender would not acquire
participations in Swing Line Loans made while such circumstances continued. If
any Lender fails to fund any amount due to Agent under this Section on the
Settlement Date, Agent shall be entitled to recover such amount on demand from
such Lender, together with interest thereon at the interest rate then applicable
to the Revolving Credit Loans. All payments made by the Lenders under this
Section 3.1.11 shall be deemed to be Revolving Credit Loans made to Borrower in
accordance with this Agreement.
3.2 Payments. Except where evidenced by notes or other instruments
issued or made by Borrower to any Lender and accepted by such Lender
specifically containing payment instructions that are in conflict with this
Section 3.2 (in which case the conflicting
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provisions of said notes or other instruments shall govern and control), the
Obligations shall be payable, without setoff or counter-claim, as follows:
3.2.1 Principal. Principal payable on account of Revolving
Credit Loans shall be payable by Borrower to Agent for the ratable benefit of
Lenders immediately upon the earliest of (i) the receipt by Agent or Borrower of
any proceeds of any of the Collateral (except as otherwise provided herein),
including without limitation pursuant to Subsections 3.3.1 and 6.2.4, to the
extent of said proceeds, subject to Borrower's rights to reborrow such amounts
in compliance with Subsection 1.1.1 hereof; (ii) the occurrence of an Event of
Default in consequence of which Agent or Majority Lenders elect to accelerate
the maturity and payment of the Obligations, or (iii) termination of this
Agreement pursuant to Section 4 hereof; provided, however, that, if an
Overadvance shall exist at any time, Borrower shall immediately repay the
Overadvance. Each payment (including principal prepayments) by Borrower on
account of principal of the Revolving Credit Loans shall be applied first to
Base Rate Advances, then to LIBOR Advances, subject to Subsection 3.3.5 hereof.
If any amounts collected by Agent exceed the Revolving Credit Loans outstanding
(including any amounts charged to Borrower under this Agreement), such amounts
shall be disbursed to Borrower or at its written direction.
3.2.2 Interest.
(a) Base Rate Advances. Interest accrued on Base Rate
Advances shall be due and payable on the earliest of (1) the first
calendar day of each month (for the immediately preceding month),
computed through the last calendar day of the preceding month, (2) the
occurrence of an Event of Default in consequence of which Agent or
Majority Lenders elect to accelerate the maturity and payment of the
Obligations or (3) termination of this Agreement pursuant to Section 4
hereof.
(b) LIBOR Advances. Interest accrued on each LIBOR
Advance shall be due and payable on each LIBOR Interest Payment Date
and on the earliest of (1) the occurrence of an Event of Default in
consequence of which Agent or Majority Lenders elect to accelerate the
maturity and payment of the Obligations or (2) termination of this
Agreement pursuant to Section 4 hereof.
3.2.3 Costs, Fees and Charges. Costs, fees and charges
payable pursuant to this Agreement shall be payable by Borrower to Agent, as and
when provided in Section 2 hereof or to any other Person designated by Agent in
writing.
3.2.4 Other Obligations. The balance of the Obligations
requiring the payment of money, if any, shall be payable by Borrower to Agent
for distribution to Lenders, as appropriate, as and when provided in this
Agreement, the Other Agreements or the Security Documents, or if not so
provided, on demand.
3.2.5 Prepayment of LIBOR Advances. Borrower may prepay a
LIBOR Advance only on the last day of the Interest Period for such LIBOR
Advance. If Borrower shall nonetheless pay or repay a LIBOR Advance on any other
date, Borrower shall pay to Agent, upon request of Agent, such amount or amounts
as shall be sufficient (in the
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reasonable opinion of Agent) to compensate Lenders for any loss, cost, or
expense incurred as a result of: (i) any payment of a LIBOR Advance on a date
other than the last day of the Interest Period for such Loan; (ii) any failure
by Borrower to borrow a LIBOR Advance on the date specified by Borrower's
written notice; or (iii) any failure by Borrower to pay a LIBOR Advance on the
date for payment specified in Borrower's written notice. Without limiting the
foregoing, Borrower shall pay to Agent, for the ratable benefit of Lenders
(other than any Lender who waives such provision), a "yield maintenance fee" in
an amount computed as follows: the current LIBOR shall be subtracted from the
LIBOR in effect at the time of prepayment. If the result is zero or a negative
number, there shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be divided by 360
and multiplied by the number of days remaining in the Interest Period chosen
pursuant to the LIBOR Advance as to which the prepayment is made. Said amount
shall be reduced to present value. The resulting amount shall be the yield
maintenance fee due to Agent, for the ratable benefit of Lenders, upon the
payment of a LIBOR Advance. If by reason of an Event of Default, Agent or
Majority Lenders elect to declare the Obligations to be immediately due and
payable, then any yield maintenance fee with respect to a LIBOR Advance shall
become due and payable in the same manner as though Borrower had exercised such
right of prepayment.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation
of Collateral. Except as provided in Subsection 8.2.5(i), if Borrower or any of
its Subsidiaries sells or otherwise disposes of any of the Equipment or real
Property or other Collateral or assets, or if a Casualty Loss occurs with
respect to any of the Collateral, Borrower shall, unless otherwise agreed by
Majority Lenders, pay to Agent for the ratable benefit of Lenders as and when
received by Borrower or such Subsidiary and as a mandatory prepayment of the
Loans, as herein provided, a sum equal to the proceeds (including insurance
payments and condemnation awards but net of costs and taxes incurred in
connection with such sale or event) ("Sale Proceeds") received by Borrower or
such Subsidiary from such sale or Casualty Loss. The applicable prepayment shall
be applied to reduce the outstanding principal balance of the Revolving Credit
Loans, but, except as provided below, shall not permanently reduce the Revolving
Loan Commitments; provided that any sale or Casualty Loss of Inventory,
Equipment or Specified Real Property shall reduce the Borrowing Base to the
extent of the value of the applicable Property. Such reduction shall be
effective on the date of consummation of the sale or receipt of proceeds of a
Casualty Loss if the Sale Proceeds are equal to or greater than five percent
(5%) of Availability on such date (without giving effect to the application of
the Sale Proceeds) and otherwise as of the date on which Borrower delivers its
new Borrowing Base Certificate pursuant to subsection 8.1.4. If Borrower and its
Subsidiaries do not reinvest the proceeds of any sales or other dispositions of
assets within 364 days after receipt of such proceeds in assets used in their
business and would be required to make a "Net Proceeds Offer" (as defined in the
Senior Note Indenture), then the Revolving Loan Commitments shall be
automatically permanently reduced by an amount equal to the uninvested portion
of such proceeds on the 364th day after receipt of such proceeds.
3.3.2 [intentionally omitted]
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3.3.3 Proceeds from Issuance of Additional Indebtedness or
Equity. If Borrower or any Subsidiary issues any additional Indebtedness (other
than intercompany Indebtedness) or obtains any additional equity in a manner
permitted under this Agreement, Borrower shall pay to Agent for the ratable
benefit of Lenders, when and as received by any Borrower and as a mandatory
prepayment of the Obligations, a sum equal to 100% of the net cash proceeds to
Borrower or such Subsidiary of the issuance of such Indebtedness or equity. Any
such prepayment shall be applied to reduce the outstanding principal balance of
the Revolving Credit Loans, but shall not permanently reduce the Revolving Loan
Commitments. If the proceeds of the issuance of Securities are to be used to
redeem or repurchase Senior Notes in accordance with Section 8.2.6(b) hereof,
such proceeds shall be paid to the Agent for application to the Revolving Credit
Loans but, subject to the terms of this Agreement, may be reborrowed for such
redemption or repurchase.
3.3.4 [intentionally omitted]
3.3.5 LIBOR Advances. If the application of any payment
made in accordance with the provisions of this Section 3.3 at a time when no
Event of Default has occurred and is continuing would result in termination of a
LIBOR Advance prior to the last day of the Interest Period for such LIBOR
Advance, the amount of such prepayment shall not be applied to such LIBOR
Advance, but will, at Borrower's option, be deposited by Borrower in an interest
bearing account at Bank or another bank satisfactory to Agent in its discretion,
which account is in the name of Borrower and under the control of Agent and from
which account only Agent can make any withdrawal, in each case to be applied as
such amount would otherwise have been applied under this Section 3.3 at the
earlier to occur of (i) the last day of the relevant Interest Period or (ii) the
occurrence of a Default or an Event of Default.
3.3.6 [intentionally omitted]
3.3.7 Optional Reductions of Revolving Loan Commitments.
Borrower may, at its option from time to time upon not less than 3 Business
Days' prior written notice to Agent, terminate in whole or permanently reduce
ratably in part, the unused portion of the Revolving Loan Commitments, provided,
however, that (i) each such partial reduction shall be in an amount of
$5,000,000 or integral multiples of $1,000,000 in excess thereof and (ii) the
aggregate of all optional reductions to the Revolving Loan Commitments may not
exceed $25,000,000 during any 12 month period or $100,000,000 during the Term.
Except for charges under Subsection 3.2.5 applicable to prepayments of LIBOR
Advances, such prepayments shall be without premium or penalty, but Borrower
shall repay the Loans (or provide cash collateral for the LC Amount) to the
extent that the sum of the outstanding principal amount of the Revolving Credit
Loans, the LC Amount and all unpaid LC Obligations exceeds the Revolving Loan
Commitments as so reduced.
3.4 Application of Payments and Collections. All items of payment
received by Agent by 12:00 noon, Los Angeles time, on any Business Day shall be
deemed received on that Business Day. All items of payment received after 12:00
noon, Los Angeles time, on any Business Day shall be deemed received on the
following Business Day. Borrower irrevocably waives the right to direct the
application of any and all payments and collections at any time or times
hereafter received by Agent from or on behalf of Borrower or any Guarantor, and
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Borrower does hereby irrevocably agree that Agent shall have the continuing
exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Agent or its agent against the
Obligations, in such manner as Agent may deem advisable, notwithstanding any
entry by Agent or any Lender upon any of its books and records. If as the result
of collections of Accounts as authorized by Subsection 6.2.4 hereof or
otherwise, a credit balance exists in the Loan Account, such credit balance
shall not accrue interest in favor of Borrower, but shall be disbursed to
Borrower or otherwise at Borrower's direction in the manner set forth in
Subsection 3.1.2, upon Borrower's request at any time, so long as no Default or
Event of Default then exists. Agent may at its option, offset such credit
balance against any of the Obligations upon and during the continuance of an
Event of Default.
3.5 All Loans to Constitute One Obligation. The Loans shall
constitute one general Obligation of Borrower, and shall be secured by Agent's
Lien for the benefit of the Agent and the ratable benefit of the Lenders upon
all of the Collateral.
3.6 Loan Account. Agent shall enter all Loans as debits to a loan
account (the "Loan Account") and shall also record in the Loan Account all
payments made by Borrower on any Obligations and all proceeds of Collateral
which are finally paid to Agent, and may record therein, in accordance with
customary accounting practice, other debits and credits, including interest and
all charges and expenses properly chargeable to Borrower pursuant to this
Agreement or any other Loan Document.
3.7 Statements of Account. Agent will account to Borrower monthly
with a statement of Loans, charges and payments made pursuant to this Agreement
during the immediately preceding month, and such account rendered by Agent shall
be deemed final, binding and conclusive upon Borrower absent demonstrable error
unless Agent is notified by Borrower in writing to the contrary within 30 days
of the date each accounting is received by Borrower. Such notice shall only be
deemed an objection to those items specifically objected to therein.
3.8 Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of any Loan made by it in excess of its
ratable share of payments on account of Loans made by all Lenders, such Lender
shall forthwith purchase from each other Lender such participation in such Loan
as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each other Lender; provided, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lenders the purchase price to the extent of such recovery, together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.8 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
Borrower in the amount of such participation.
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Notwithstanding anything to the contrary contained herein, all purchases and
repayments to be made under this Section 3.8 shall be made through Agent.
3.9 Increased Costs; Taxes.
3.9.1 Increased Costs. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which any Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
governmental authority charged with the interpretation or application thereof,
or the compliance of such Lender therewith, shall:
(1) subject such Lender to any tax with
respect to this Agreement (other than (a) any tax based on or
measured by net income or otherwise in the nature of a net
income tax, including, without limitation, any franchise tax
or any similar tax based on capital, net worth or comparable
basis for measurement and (b) any tax collected by a
withholding on payments and which neither is computed by
reference to the net income of the payee nor is in the nature
of an advance collection of a tax based on or measured by the
net income of the payee) or (2) change the basis of taxation
of payments to such Lender of principal, fees, interest or any
other amount payable hereunder or under any Loan Documents
(other than in respect of (a) any tax based on or measured by
net income or otherwise in the nature of a net income tax,
including, without limitation, any franchise tax or any
similar tax based on capital, net worth or comparable basis
for measurement and (b) any tax collected by a withholding on
payments and which neither is computed by reference to the net
income of the payee nor is in the nature of an advance
collection of a tax based on or measured by the net income of
the payee);
(2) impose, modify or hold applicable any
reserve (except any reserve taken into account in the
determination of the applicable LIBOR), special deposit,
assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or
other credit extended by, any office of such Lender, including
(without limitation) pursuant to Regulation D of the Board of
Governors of the Federal Reserve System; or
(3) impose on such Lender or the London
interbank market any other condition with respect to any Loan
Document; or
(4) impose on such Lender any capital
requirements.
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining its Loans hereunder by an amount that such
Lender deems to be material or to reduce the amount of any payment (whether of
principal, interest or otherwise) in respect of any of such Loans by an amount
that such Lender deems to be material, or
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reduces the rate of return on such Lender's capital as a result of its
obligations hereunder by an amount such Lender deems to be material, then, in
any such case, Borrower shall pay such Lender, upon demand and certification not
later than six months following its receipt of notice of the imposition of such
increased costs or such reduced return, such additional amount as will
compensate such Lender for such additional cost or such reduction, as the case
may be, to the extent such Lender has not otherwise been compensated, with
respect to a particular Loan, for such increased cost or such reduced return as
a result of an increase in the Base Rate or the LIBOR. An officer of such Lender
shall determine the amount of such additional cost or reduced amount using
reasonable averaging and attribution methods and shall certify the amount of
such additional cost or reduced amount to Borrower, which certification shall
include a written explanation of such additional cost or reduction to Borrower.
Such certification shall be conclusive absent manifest error. If such Lender
claims any additional cost or reduced amount pursuant to this Subsection 3.9.1,
then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to designate a different lending office or to file any
certificate or document reasonably requested by Borrower if the making of such
designation or filing would avoid the need for, or reduce the amount of, any
such additional cost or reduced amount and would not, in the sole discretion of
such Lender, be otherwise disadvantageous to such Lender.
3.9.2 Net Payments. (a) All payments by Borrower hereunder
to or for the benefit of any Lender or the Agent shall be made without setoff,
counterclaim or other defense. Except as provided in Subsection 3.9.2 (b) below,
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments, or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding any tax imposed on or
measured by the net income or profits of the Lender or the Agent, as the case
may be, pursuant to the laws of the jurisdiction in which it is organized)
together with all interest, penalties or similar liabilities with respect
thereto (collectively, "Covered Taxes"). If Borrower shall be required by law to
deduct any Covered Taxes from any sum payable hereunder to any Lender or the
Agent, (A) the sum payable shall be increased as may be necessary so that after
making all required deductions of Covered Taxes (including deductions of Covered
Taxes applicable to additional sums payable under this Section such Lender or
the Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (B) Borrower shall make such
deductions and (C) Borrower shall pay the full amount so deducted to the
relevant taxation authority or other authority in accordance with applicable
law. Borrower shall furnish to the Agent within 45 days after the date the
payment of any Covered Taxes is due certified copies of tax receipts evidencing
such payment by Borrower. Borrower agrees to indemnify and hold harmless the
Lenders and the Agent and reimburse each of them, as the case may be, for the
amount of any Covered Taxes so levied or imposed and paid by them.
(b) Each Lender which is organized under the laws of a
jurisdiction other than the United States or any State thereof (a "Foreign
Lender") shall deliver to Agent and Borrower (i) two valid, duly completed
copies of IRS Form W-8ECI and W-8BEN or successor applicable form, as the case
may be, and any other required form, certifying in each case that such Foreign
Lender is entitled to receive payments under this Agreement and the
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Revolving Loan Notes payable to it without deduction or withholding of any
United States federal income taxes or with such withholding imposed at a reduced
rate (the "Reduced Rate"), or (ii) a valid, duly completed IRS Form W-8 or W-9
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Each such Lender shall also deliver to
Agent and Borrower two further copies of said Form W-8ECI or W-8BEN and W-8 or
W-9, or successor applicable forms, or other manner of required certification,
as the case may be, on or before the date that any such form expires or becomes
obsolete or otherwise is required to be resubmitted as a condition to obtaining
an exemption from a required withholding of United States federal income tax or
entitlement to having such withholding imposed at the Reduced Rate or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to Borrower and Agent, and such extensions or renewals thereof
as may reasonably be requested by Borrower and Agent, certifying (i) in the case
of a Form W-8ECI or W-8BEN that such Lender is entitled to receive payments
under this Agreement and the Revolving Loan Notes payable to it without
deduction or withholding of any United States federal income taxes, unless in
any such case any change in a tax treaty to which the United States is a party,
or any change in law or regulation of the United States or official
interpretation thereof has occurred after the Restatement Date and prior to the
date on which any such delivery would otherwise be required that renders all
such forms inapplicable or that would prevent such Foreign Lender from duly
completing and delivering any such form with respect to it, and such Foreign
Lender advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding at the Reduced Rate, or (ii) in
the case of a Form W-8 or W-9, establishing an exemption from United States
backup withholding tax.
3.9.3 Affected Lenders. If Borrower receives a demand for
payments under this Section 3.9, so long as no Default or Event of Default shall
have occurred and be continuing and Borrower has obtained a commitment from
another Lender or other financial institution, acceptable to Agent in its
reasonable discretion, to become a Lender for all purposes under this Agreement
and to assume all obligations of the Lender to be replaced, at any time after
receipt of such demand for payments and while the circumstances causing LIBOR
not to be available continue, Borrower may require the Lender giving such notice
to assign all of its Loans, Revolving Loan Commitments and other Obligations to
such other Lender or financial institution pursuant to the provisions of
Subsection 11.9; provided that, prior to or concurrently with such replacement
(i) Borrower has paid to the Lender giving such demand for payments all
principal, interest, fees and other amounts due and owing to such Lender through
such date of replacement, (ii) Agent has received the processing and recordation
fee required to be paid by Subsection 11.9.1, and (iii) all of the requirements
for such assignment contained in Subsection 11.9, including, without limitation,
the receipt by Agent of an executed assignment and assumption agreement and
other supporting documents, have been fulfilled.
3.10 Basis for Determining Interest Rate Inadequate or Unfair. In
the event that Agent shall have determined that:
(i) reasonable means do not exist for
ascertaining the LIBOR for any Interest Period; or
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(ii) Dollar deposits in the relevant
amount and for the relevant maturity are not available in the
London interbank market with respect to a proposed LIBOR
Advance, or a proposed conversion of a Base Rate Advance into
a LIBOR Advance; then
Agent shall give Borrower prompt written, telephonic or electronic notice of the
determination of such effect. If such notice is given, (i) any such requested
LIBOR Advance shall be made as a Base Rate Advance, unless Borrower shall notify
Agent no later than 10:00 a.m. (Los Angeles time) two (2) Business Days prior to
the date of such proposed borrowing that the request for such borrowing shall be
canceled or made as an unaffected type of LIBOR Advance, and (ii) any Base Rate
Advance which was to have been converted to an affected type of LIBOR Advance
shall be continued as or converted into a Base Rate Advance, or, if Borrower
shall notify Agent, no later than 10:00 a.m. (Los Angeles time) two (2) Business
Days prior to the proposed conversion, shall be maintained as an unaffected type
of LIBOR Advance.
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement. Subject to the right of Lenders to cease
making Loans to Borrower during the continuance of any Default or Event of
Default, this Agreement shall be in effect for the period from the Restatement
Date through and including February 11, 2008 (the "Term"), unless terminated as
provided in Section 4.2 hereof.
4.2 Termination.
4.2.1 Termination by Lenders. Agent may, and at the
direction of Majority Lenders shall, terminate this Agreement without notice
upon or after the occurrence and during the continuance of an Event of Default.
4.2.2 Termination by Borrower. Upon at least 30 days prior
written notice to Agent and Lenders, Borrower may, at its option, terminate this
Agreement; provided, however, no such termination shall be effective until
Borrower has paid or collateralized to Agent's reasonable satisfaction all of
the Obligations in immediately available funds, all Letters of Credit and LC
Guaranties have expired, terminated or have been cash collateralized to Agent's
satisfaction and Borrower has complied with Subsection 3.2.5. Unless Majority
Lenders otherwise agree, any notice of termination given by Borrower shall be
irrevocable and no Lender shall have any obligation to make any Loans or issue
or procure any Letters of Credit or LC Guaranties on or after the termination
date stated in such notice. Borrower may elect to terminate this Agreement in
its entirety only. No section of this Agreement or type of Loan available
hereunder may be terminated singly.
4.2.3 In addition to any other fees or charges payable
hereunder, in the event that Borrower provides less than 30 days prior written
notice of termination of this Agreement as required by Section 4.2.2 (a) in
addition to any other amounts which are required to be paid to Agent or any
Lender under the Loan Documents, (i) Borrower agrees to pay to Agent (for the
ratable benefit of Lenders) an amount equal to the product of (A) (I) the
product of (X) the aggregate payoff amount of the Obligations times (Y) the
interest rates then applicable to the
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Obligations, divided by (II) 360 times (B) the difference between 30 and the
number of days prior written notice of termination of this Agreement given by
Borrower to Agent and the Lenders.
4.3 Effect of Termination. All of the Obligations shall be
immediately due and payable upon the termination date stated in any notice of
termination of this Agreement. All undertakings, agreements, covenants,
warranties and representations of Borrower contained in the Loan Documents shall
survive any such termination and Agent shall retain its Liens in the Collateral
and Agent and each Lender shall retain all of its rights and remedies under the
Loan Documents notwithstanding such termination until all Obligations (other
than Derivative Obligations) have been discharged or paid, in full, in
immediately available funds, including, without limitation, all Obligations
under Subsection 3.2.5 resulting from such termination. Notwithstanding the
foregoing or the payment in full of the Obligations, Agent shall not be required
to terminate its Liens in the Collateral unless, with respect to any loss or
damage Agent may incur as a result of dishonored checks or other items of
payment received by Agent from Borrower or any Account Debtor and applied to the
Obligations, Agent shall, at its option, (i) have received a written agreement
satisfactory to Agent, executed by Borrower and by any Person whose loans or
other advances to Borrower are used in whole or in part to satisfy the
Obligations, indemnifying Agent and each Lender from any such loss or damage or
(ii) have retained cash Collateral for such period of time as Agent, in its
reasonable discretion, may deem necessary to protect Agent and each Lender from
any such loss or damage.
SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral. To secure the prompt payment
and performance to Agent and each Lender of the Obligations, Borrower hereby
confirms the grant to the Agent for the benefit of the Agent and each Lender of
the Liens contained in the Existing Loan Agreement and further grants to Agent
for the benefit of the Agent and each Lender a continuing Lien upon all of
Borrower's assets, including all of the following Property and interests in
Property of Borrower, whether now owned or existing or hereafter created,
acquired or arising and wheresoever located:
(iii) Accounts;
(iv) Certificated Securities;
(v) Chattel Paper, including Electronic
Chattel Paper and Tangible Chattel Paper;
(vi) Commercial Tort Claims;
(vii) Computer Hardware and Software and
all rights with respect thereto, including, any and all
licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications, and
any substitutions, replacements, additions or model
conversions of any of the foregoing;
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(viii) Contract Rights;
(ix) Deposit Accounts;
(x) Documents;
(xi) Equipment;
(xii) Financial Assets;
(xiii) Fixtures;
(xiv) General Intangibles, including
Payment Intangibles and Software;
(xv) Goods (including all of its
Equipment, Fixtures and Inventory), and all accessions,
additions, attachments, improvements, substitutions and
replacements thereto and therefore;
(xvi) Instruments;
(xvii) Intellectual Property;
(xviii) Inventory;
(xix) Investment Property;
(xx) money (of every jurisdiction
whatsoever);
(xxi) Letter-of-Credit Rights;
(xxii) Payment Intangibles;
(xxiii) Security Entitlements;
(xxiv) Software;
(xxv) Supporting Obligations;
(xxvi) Uncertificated Securities; and
(xxvii) to the extent not included in the
foregoing, all other personal property of any kind or
description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit
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(which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of security interest therein, Agent will not enforce its
security interest in Borrower's rights under such lease or license (other than
in respect of the Proceeds thereof) for so long as such prohibition continues,
it being understood that upon request of Agent, Borrower will in good faith use
reasonable efforts to obtain consent for the creation of a security interest in
favor of Agent (and to Agent's enforcement of such security interest) in Agent's
rights under such lease or license.
5.2 Other Collateral.
5.2.1 Commercial Tort Claims. Borrower shall, and shall
cause its Subsidiaries to, promptly notify Agent in writing upon its obtaining
knowledge of the incurrence of or obtaining a Commercial Tort Claim after the
Restatement Date against any third party and, upon request of Agent, promptly
enter into an amendment to this Agreement or the Subsidiary Security Agreement,
as applicable, and do such other acts or things deemed appropriate by Agent to
give Agent a security interest in any such Commercial Tort Claim.
5.2.2 Other Collateral. Borrower shall, and shall cause its
Subsidiaries to, promptly notify Agent in writing upon acquiring or otherwise
obtaining any material amount of Collateral after the date hereof consisting of
Deposit Accounts, Investment Property, Letter of Credit Rights or Electronic
Chattel Paper and, upon the request of Agent, promptly execute such other
documents, and do such other acts or things deemed appropriate by Agent to
deliver to Agent control with respect to such Collateral; promptly notify Agent
in writing upon acquiring or otherwise obtaining any Collateral after the date
hereof consisting of Documents or Instruments and, upon the request of Agent,
will promptly execute such other documents, and do such other acts or things
deemed appropriate by Agent to deliver to Agent possession of such Documents
which are negotiable and Instruments (other than Instruments for which the
aggregate principal amount does not collectively exceed $100,000), and, with
respect to nonnegotiable Documents, to have such nonnegotiable Documents issued
in the name of Agent; and with respect to Collateral in the possession of a
third party, other than Certificated Securities and Goods covered by a Document,
obtain an acknowledgement from the third party that it is holding the Collateral
for the benefit of Agent.
5.3 Lien Perfection; Further Assurances. Borrower shall, and shall
cause its Subsidiaries to, execute such UCC-1 financing statements as are
required by the UCC and such other instruments, assignments or documents as are
necessary to perfect Agent's Lien upon any of the Collateral and shall take such
other action as may be required to perfect or to continue the perfection of
Agent's Lien upon the Collateral. Unless prohibited by applicable law, Borrower
hereby irrevocably authorizes Agent to execute (if required) and file any such
financing statements or amendments, including, without limitation, financing
statements that indicate the Collateral (i) as all assets of Borrower or its
Subsidiaries, as applicable, or words of similar effect, or (ii) as being of an
equal or lesser scope, or with greater or lesser detail, than as set forth in
Section 5.1, on Borrower's or the applicable Subsidiary's behalf. Borrower, on
behalf of itself and its Subsidiaries, also hereby ratifies its authorization
for Agent to have filed in any jurisdiction any like financing statements or
amendments thereto if filed prior to the date hereof. The parties agree that a
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement and may be filed in
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any appropriate office in lieu thereof. At Agent's request, Borrower shall, and
shall cause its Subsidiaries to, also promptly execute or cause to be executed
and shall deliver to Agent any and all documents, instruments and agreements
deemed necessary by Agent to give effect to or carry out the terms or intent of
the Loan Documents. Borrower shall, and shall cause its Subsidiaries to, xxxx
all Chattel Paper to note Agent's Liens therein.
5.4 Lien on Realty. The due and punctual payment and performance
of the Obligations shall also be secured by the Lien created by Mortgages upon
all real property of Borrower and its Subsidiaries now or hereafter owned,
together with all improvements or Fixtures on such real property. Each Mortgage
shall be executed by Borrower or the applicable Subsidiary in favor of Agent.
Each Mortgage shall be duly recorded, at Borrower's expense, in each office
where such recording is required to constitute a fully perfected first Lien on
the real property covered thereby, together with all improvements or Fixtures on
such real property. On the Restatement Date, Borrower shall deliver to Agent, at
Borrower's expense, amendments to the Mortgages on the Specified Real Property
and mortgagee title insurance policies or endorsements thereto issued by a title
insurance company satisfactory to Agent, which policies shall be in form and
substance satisfactory to Agent and shall insure a valid first Lien in favor of
Agent, for the benefit of itself and the Lenders, on the real property covered
by each Mortgage, subject only to those exceptions acceptable to Agent and its
counsel. Borrower shall deliver to Agent such other documents, including,
without limitation, as-built survey prints of the real property, as Agent and
its counsel may request relating to the real property subject to the Mortgages.
SECTION 6. COLLATERAL ADMINISTRATION
6.1 General.
6.1.1 Location of Collateral. All Collateral, other than
Inventory in transit, Inventory held pursuant to leases at a lessee's location
and motor vehicles, will at all times be kept by Borrower and Guarantors at one
or more of business locations set forth in Exhibit 6.1.1 hereto, as updated
pursuant to Section 6.3 hereof.
6.1.2 Insurance of Collateral. Borrower shall maintain and
pay for insurance upon all Collateral wherever located and with respect to the
business of Borrower and Guarantors, covering casualty, hazard, public
liability, workers' compensation and such other risks in such amounts and with
such insurance companies as are reasonably satisfactory to Agent. Borrower shall
deliver certified copies of such policies to Agent as promptly as practicable,
with satisfactory lender's loss payable endorsements, naming Agent as loss payee
on any property insurance or business interruption insurance policies and as an
additional insured on any liability insurance policies, and showing only such
other loss payees, assignees and additional insureds as are satisfactory to
Agent. Each policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 10 days prior written notice to Agent in the
event of cancellation of the policy for nonpayment of premium and not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any other reason whatsoever and a clause specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of Borrower,
any of its Subsidiaries or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted
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by said policy. Borrower agrees to deliver to Agent, promptly as rendered, true
copies of all reports made in any reporting forms to insurance companies. All
proceeds of business interruption insurance (if any) of Borrower and Guarantors
shall be remitted to Agent for application to the outstanding balance of the
Revolving Credit Loans.
Unless Borrower provides Agent with evidence of the insurance
coverage required by this Agreement, Agent may purchase insurance at Borrower's
expense to protect Agent's interests in the Properties of Borrower and
Guarantors. This insurance may, but need not, protect the interests of Borrower
and Guarantors. The coverage that Agent purchases may not pay any claim that
Borrower or any Guarantor makes or any claim that is made against Borrower or
any such Guarantor in connection with said Property. Borrower may later cancel
any insurance purchased by Agent, but only after providing Agent with evidence
that Borrower and Guarantors have obtained insurance as required by this
Agreement. If Agent purchases insurance, Borrower will be responsible for the
costs of that insurance, including interest and any other charges Agent may
impose in connection with the placement of insurance, until the effective date
of the cancellation or expiration of the insurance. The costs of the insurance
may be added to the Obligations. The costs of the insurance may be more than the
cost of insurance that Borrower and Guarantors may be able to obtain on their
own.
6.1.3 Protection of Collateral. Neither Agent nor any
Lender shall be liable or responsible in any way for the safekeeping of any of
the Collateral or for any loss or damage thereto (except for reasonable care in
the custody thereof while any Collateral is in Agent's or such Lender's actual
possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other person
whomsoever, but the same shall be at Borrower's sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts.
Borrower shall, and shall cause each of its Subsidiaries to, keep accurate and
complete records of its Accounts and all payments and collections thereon and
shall submit to Agent on such periodic basis as Agent shall request a sales and
collections report for the preceding period, in form consistent with the reports
currently prepared by Borrower with respect to such information. Concurrently
with the delivery of each Borrowing Base Certificate required by Subsection
8.1.4, or more frequently as requested by Agent, from and after the date hereof,
Borrower shall deliver to Agent a detailed aging of all of Accounts of Borrower
and Guarantors, and upon Agent's request therefore, copies of proof of delivery
and the original copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts so scheduled and
such other matters and information relating to the status of then existing
Accounts as Agent shall reasonably request.
6.2.2 Taxes. If an Account includes a charge for any tax
payable to any governmental taxing authority, Agent is authorized, in its sole
discretion, to pay the amount thereof to the proper taxing authority for the
account of Borrower or its Subsidiary and to charge Borrower therefore, except
for taxes that (i) are being actively contested in good faith and by appropriate
proceedings and with respect to which Borrower or such Subsidiary
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maintains reasonable reserves on its books therefore and (ii) would not
reasonably be expected to result in any Lien other than a Permitted Lien. In no
event shall Agent or any Lender be liable for any taxes to any governmental
taxing authority that may be due by Borrower or any of its Subsidiaries or
Affiliates.
6.2.3 Account Verification. Any of Agent's officers,
employees or agents shall have the right, at any time or times hereafter, in the
name of Agent, any designee of Agent or Borrower or any Guarantor, to verify the
validity, amount or any other matter relating to any Accounts by mail,
telephone, telegraph or otherwise; provided, that unless a Default or an Event
of Default is then in existence, prior to conducting each set of verifications,
Agent shall generally consult with Borrower about the verification process.
Borrower shall cooperate fully with Agent in an effort to facilitate and
promptly conclude any such verification process.
6.2.4 Maintenance of Dominion Account. Borrower shall, and
shall cause Guarantors to, maintain lockbox and blocked account arrangements
acceptable to Agent with such banks as may be selected by Borrower and be
acceptable to Agent, for direct deposit of payments and other remittances,
including, without limitation, payment on Accounts. Borrower shall, and at
Agent's discretion shall cause Guarantors to, also maintain a Dominion Account
or Accounts pursuant to lockbox and blocked account arrangements acceptable to
Agent with such banks as may be selected by Borrower and be acceptable to Agent.
Borrower or the applicable Guarantor shall issue to any such banks an
irrevocable letter of instruction directing such banks to deposit all payments
or other remittances received in the lockbox and blocked accounts to the
Dominion Account for application on account of the Obligations. All funds
deposited in any Dominion Account shall immediately become the property of
Agent, for the ratable benefit of Lenders, and Borrower or the applicable
Guarantor shall obtain the agreement by such banks in favor of Agent to waive
any offset rights against the funds so deposited. In the event that the
applicable bank is unwilling to waive such rights, Borrower shall, and shall
cause Guarantors to, upon Agent's request to do so, immediately transfer any
funds deposited in such bank accounts to a bank that will agree to waive such
rights. Agent assumes no responsibility for such lockbox and blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.
6.2.5 Collection of Accounts, Proceeds of Collateral. To
expedite collection, Borrower shall, and shall cause Guarantors to, endeavor in
the first instance to make collection of its Accounts for Agent. All remittances
received by Borrower or any Guarantor on account of Accounts, together with the
proceeds of any other Collateral, shall be held as Agent's property, for its
benefit and the benefit of Lenders, by Borrower or any Guarantor as trustee of
an express trust for Agent's benefit and Borrower or Guarantor shall immediately
deposit same in kind in the lockboxes or a Dominion Account, or pursuant to such
other arrangements as are acceptable to Agent. Agent retains the right at all
times after the occurrence and during the continuance of a Default or an Event
of Default to notify Account Debtors that Accounts of Borrower and Guarantors
have been assigned to Agent and to collect such Accounts directly in its own
name and to charge the collection costs and expenses, including attorneys' fees,
to Borrower.
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6.3 Records and Reports of Inventory, Machinery and Equipment.
Borrower shall, and shall cause its Subsidiaries to, keep records of its
Inventory and Equipment, which records shall be complete and accurate in all
material respects. Borrower shall furnish to Agent and Lenders updates of
Exhibit 6.1.1 and Inventory, and Equipment reports concurrently with the
delivery of each Borrowing Base Certificate described in Subsection 8.1.4 or
more frequently as requested by Agent, which reports will be in such other
format and detail as Agent shall request and shall include a current list of all
locations of Inventory, Machinery and Equipment of Borrower and Guarantors.
Borrower shall conduct a physical inventory of all container Inventory on
premises owned or leased by Borrower or any of its Subsidiaries no less
frequently than monthly and shall provide to Agent a report based on each such
physical inventory promptly thereafter, together with such supporting
information as Agent shall reasonably request.
6.4 Administration of Equipment. Borrower shall, and shall cause
its Subsidiaries to, keep records of its Equipment which shall be complete and
accurate in all material respects itemizing and describing the kind, type,
quality, quantity and book value of its Equipment and all dispositions made in
accordance with this Agreement, and Borrower shall, and shall cause Guarantors
to, furnish Agent with a current schedule containing the foregoing information
on at least an annual basis and more often if reasonably requested by Agent.
Promptly after the reasonable request therefore by Agent, Borrower shall deliver
to Agent any and all evidence of ownership, if any, of any Equipment.
6.5 Appraisals. When reasonably requested by Agent, Borrower
shall, and cause Guarantors to, provide the following to Agent, with a copy to
any Lender which requests delivery of such reports: a report of Eligible
Container Fleet Inventory and Eligible Trailer Fleet Inventory by category and
by item (in detail), a report of Inventory, based upon a physical count, which
shall describe Inventory of Borrower and Guarantors by category and by item (in
detail) and report the then appraised value (at the lower of cost or orderly
liquidation value) of such Inventory, and a report of Equipment which shall
describe Borrower's and Guarantors' Equipment (in detail) and report the then
appraised value (at the lower of cost or orderly liquidation value) of such
Equipment. In addition, when requested by Agent after consultation with Borrower
regarding the scope and cost of any such appraisal, Borrower shall provide the
Lenders, at Borrower's expense, with appraisals or updates thereof of any or all
of the Collateral from an Appraiser. Unless an Event of Default has occurred and
is continuing or Borrower otherwise agrees, (i) the appraisals respecting
Inventory held for lease or sale shall be requested at least once, but not more
than once, during any twelve month period, other than appraisals of such
Inventory in connection with a Permitted Acquisition, and (ii) updated
certifications as to material changes in value since the most recent appraisal
shall be requested at least once, but not more than once, during any twelve
month period.
6.6 Field Examinations. Agent shall conduct a field examination
twice per year or, if an Event of Default exists, more frequently at Agent's
discretion.
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SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties. To induce Agent and
each Lender to enter into this Agreement and to make advances hereunder,
Borrower warrants, represents and covenants to Agent and each Lender that:
7.1.1 Organization and Qualification. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Borrower's Subsidiaries is a corporation,
limited partnership or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. Each of Borrower and each of its Subsidiaries is
duly qualified and is authorized to do business and is in good standing as a
limited liability company, limited partnership or corporation, as applicable, in
each state or jurisdiction listed on Exhibit 7.1.1 hereto and in all other
states and jurisdictions in which the failure of Borrower or any of its
Subsidiaries to be so qualified would reasonably be expected to have a Material
Adverse Effect.
7.1.2 Power and Authority. Borrower and each Guarantor is
duly authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents and Senior Note Documents to
which it is a party. The execution, delivery and performance of this Agreement
and each of the other Loan Documents and Senior Note Documents have been duly
authorized by all necessary corporate or other relevant action and do not and
will not (i) require any consent or approval of the shareholders of Borrower or
any of the shareholders, partners or members, as the case may be, of any
Guarantor; (ii) contravene Borrower's or any Guarantors' charter, articles or
certificate of incorporation, partnership agreement, certificate of formation,
by-laws, limited liability company agreement, operating agreement or other
organizational documents (as the case may be); (iii) violate, or cause Borrower
or any Guarantor to be in default under, any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award in
effect having applicability to Borrower or any Guarantor; (iv) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which Borrower or any
Guarantor is a party or by which it or its Properties may be bound or affected;
or (v) result in, or require, the creation or imposition of any Lien (other than
Permitted Liens) upon or with respect to any of the Properties now owned or
hereafter acquired by Borrower or any Guarantor.
7.1.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each of Borrower and each Guarantor party
thereto, enforceable against it in accordance with its respective terms, except
as limited by applicable bankruptcy or insolvency laws, and by general
principles of equity.
7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of
the date hereof, (i) the correct name of each of the Subsidiaries of Borrower,
its jurisdiction of incorporation or organization and the percentage of its
Voting Stock owned by Borrower or a Subsidiary of Borrower, (ii) the name of
each of Borrower's and each Guarantors' corporate or joint venture relationships
and the nature of the relationship, (iii) the number and nature of all
outstanding
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Securities of Borrower and the number, nature and holder of Securities of each
Guarantor and (iv) the number of issued and treasury Securities of Borrower.
Borrower and each Guarantor has good title to all of the Securities it purports
to own of each of such Subsidiaries, free and clear in each case of any Lien
other than Permitted Liens. All such Securities have been duly issued and are
fully paid and non-assessable. As of the date hereof, there are no outstanding
options to purchase, or any rights or warrants to subscribe for, or any
commitments or agreements to issue or sell any Securities or obligations
convertible into, or any powers of attorney relating to any Securities of any of
Borrower's direct or indirect Subsidiaries. Except as set forth on Exhibit
7.1.4, as of the date hereof, there are no outstanding agreements or instruments
binding upon any of Borrower's or any of Guarantors' partners, members or
shareholders, as the case may be, relating to the ownership of its Securities.
7.1.5 Names. Neither Borrower nor any Guarantor has been
known as or has used any legal, fictitious or trade names except those listed on
Exhibit 7.1.5 hereto as such Exhibit may be amended in connection with a
Permitted Acquisition. Except as set forth on Exhibit 7.1.5 or in connection
with an Acquisition permitted hereunder consummated after the date hereof,
neither Borrower nor any Guarantor has been the surviving entity of a merger or
consolidation or has acquired all or substantially all of the assets of any
Person. Borrower's and each Guarantors' respective states of incorporation or
organization, Type of Organization and Organizational I.D. Number are set forth
on Exhibits 7.1.4 and 7.1.5, as such Exhibits may be amended in connection with
a Permitted Acquisition. The respective exact legal names of Borrower and each
Guarantor are set forth on Exhibit 7.1.5, as such Exhibit may be amended in
connection with a Permitted Acquisition.
7.1.6 Business Locations; Agent for Process. Each of
Borrower's and each Guarantor's chief executive office and other places of
business are as listed on Exhibit 6.1.1 hereto, as updated from time to time by
Borrower. During the preceding one-year period, neither Borrower nor any
Guarantor has had an office or place of business other than as listed on Exhibit
6.1.1. All tangible Collateral is and will at all times be kept by Borrower and
Guarantors in accordance with Subsection 6.1.1. Except as shown on Exhibit
6.1.1, as of the date hereof, no Inventory is stored with a bailee, distributor,
warehouseman or similar party, nor is any Inventory consigned to any Person.
7.1.7 Title to Properties; Priority of Liens. Borrower and
each Guarantor has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of the Collateral and all of its other Property,
in each case, free and clear of all Liens except Permitted Liens. Borrower and
each Guarantor has paid or discharged all lawful claims which, if unpaid, might
become a Lien against any of Borrower's or such Guarantors' Properties that is
not a Permitted Lien. The Liens granted to Agent under Section 5 hereof and
under the Security Documents are first priority Liens, subject only to Permitted
Liens.
7.1.8 Accounts. Agent may rely, in determining which
Accounts are Eligible Accounts, on all statements and representations made by
Borrower with respect to any Account or Accounts of Borrower or any Guarantor.
With respect to each of such Accounts, whether or not such Account is an
Eligible Account, unless otherwise disclosed to Agent in writing:
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(xxviii) It is genuine and in all respects
what it purports to be, and it is not evidenced by a judgment;
(xxix) It arises out of a completed, bona
fide sale and delivery of goods or rendition of services by
Borrower or the applicable Guarantor, in the ordinary course
of its business and in accordance with the terms and
conditions of all purchase orders, contracts or other
documents relating thereto and forming a part of the contract
between Borrower or the applicable Guarantor and the Account
Debtor and the Account Debtor is not an Affiliate of Borrower
or any Guarantor;
(xxx) It is for a liquidated amount
maturing as stated in the duplicate invoice covering such sale
or rendition of services;
(xxxi) There are no facts, events or
occurrences which in any way impair the validity or
enforceability of any Accounts or tend to reduce the amount
payable thereunder from the face amount of the invoice and
statements delivered or made available to Agent with respect
thereto;
(xxxii) To Borrower's knowledge, the
Account Debtor thereunder (1) had the capacity to contract at
the time any contract or other document giving rise to the
Account was executed and (2) such Account Debtor is Solvent;
and
(xxxiii) To Borrower's knowledge, there are
no proceedings or actions which are threatened or pending
against the Account Debtor thereunder which might result in
any material adverse change in such Account Debtor's financial
condition or the collectibility of such Account (other than
non-material disputes involving de minimis amounts arising in
the ordinary course of business).
7.1.9 Equipment. The Equipment of Borrower and Guarantors
is in good operating condition and repair.
7.1.10 Financial Statements; Fiscal Year. The Consolidated
balance sheets of Borrower and its Subsidiaries (including the accounts of all
Subsidiaries of Borrower and their respective Subsidiaries for the respective
periods during which a Subsidiary relationship existed) as of March 31, 2003 and
the related statements of income and cash flows for the periods ended on such
dates, except for the absence of footnote disclosures and normal year-end
adjustments, have been prepared in accordance with GAAP, and present fairly in
all material respects the financial positions of Borrower and such Persons,
taken as a whole, at such dates and the results of Borrower's and such Persons'
operations, taken as a whole, for such periods. As of the date hereof, since
December 31, 2002, there has been no material adverse change in the financial
position of Borrower and such other Persons, taken as a whole, as reflected in
the Consolidated balance sheet as of such date. As of the date hereof, the
fiscal year of Borrower and each such Persons ends on December 31 of each year.
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7.1.11 Full Disclosure. The financial statements referred to
in Subsection 7.1.10 hereof do not, nor does this Agreement or any other written
statement of Borrower to Agent or any Lender, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact which Borrower has failed to
disclose to Agent or any Lender in writing which would reasonably be expected to
have a Material Adverse Effect.
7.1.12 Solvent Financial Condition. Each of Borrower and
each Guarantor, is now and, after giving effect to the Loans to be made and the
Letters of Credit and LC Guaranties to be issued hereunder and all related
transactions, will be, Solvent.
7.1.13 Surety Obligations. Except as set forth on Exhibit
7.1.13, as of the date hereof, neither Borrower nor any Guarantor is obligated
as surety or indemnitor under any surety or similar bond or other contract
issued or entered into to assure payment, performance or completion of
performance of any undertaking or obligation of any Person.
7.1.14 Identification Numbers; Taxes. Borrower's federal tax
identification number is 00-0000000. The federal tax identification number of
each Subsidiary of Borrower is shown on Exhibit 7.1.14 hereto, as updated from
time to time. Borrower and each of its Subsidiaries has filed all federal, state
and local tax returns and other reports relating to taxes it is required by law
to file, except where the failure to so file would not reasonably be expected to
have a Material Adverse Effect, and has paid, or made provision for the payment
of, all taxes, assessments, fees, levies and other governmental charges upon it,
its income and Properties as and when such taxes, assessments, fees, levies and
charges are due and payable, unless and to the extent any thereof are being
diligently contested in good faith and by appropriate proceedings and Borrower
and each of its Subsidiaries maintains reasonable reserves on its books
therefor. The provision for taxes on the books of Borrower and its Subsidiaries
is adequate for all years not closed by applicable statutes, and for the current
fiscal year.
7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto,
there are no claims for brokerage commissions, finder's fees or investment
banking fees in connection with the transactions contemplated by this Agreement.
7.1.16 Patents, Trademarks, Copyrights and Licenses.
Borrower and each Guarantor owns, possesses or licenses or has the right to use
all the patents, trademarks, service marks, trade names, copyrights, licenses
and other Intellectual Property necessary for the present and planned future
conduct of its business without any known conflict with the rights of others,
except for such conflicts as would not reasonably be expected to have a Material
Adverse Effect. All such patents, trademarks, service marks, tradenames,
copyrights, licenses, and Intellectual Property are listed on Exhibit 7.1.16
hereto. No claim has been asserted to Borrower or any Guarantor which is
currently pending that their use of their Intellectual Property or the conduct
of their business does or may infringe upon the Intellectual Property rights of
any third party. To the knowledge of Borrower and except as set forth on Exhibit
7.1.16 hereto, as of the date hereof, no Person is engaging in any activity that
infringes in any material respect upon Borrower's or any of its Subsidiaries'
material Intellectual Property. Except as set forth on Exhibit 7.1.16, each of
Borrower's and each
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Guarantors' (i) material trademarks, service marks, and copyrights are
registered with the U.S. Patent and Trademark Office or in the U.S. Copyright
Office, as applicable and (ii) material license agreements and similar
arrangements relating to its Inventory (1) permits, and does not restrict, the
assignment by Borrower or any Guarantors to Agent, or any other Person
designated by Agent, of all of Borrower's or such Guarantor's, as applicable,
rights, title and interest pertaining to such license agreement or such similar
arrangement and (2) would permit the continued use by Borrower or such
Guarantor, or Agent or its assignee, of such license agreement or such similar
arrangement and the right to sell Inventory subject to such license agreement
for a period of no less than 6 months after a default or breach of such
agreement or arrangement. The consummation and performance of the transactions
and actions contemplated by this Agreement and the other Loan Documents,
including without limitation, the exercise by Agent of any of its rights or
remedies under Section 10, will not result in the termination or impairment of
any of Borrower's or any Guarantors' ownership or rights relating to its
Intellectual Property, except for such Intellectual Property rights the loss or
impairment of which would not reasonably be expected to have a Material Adverse
Effect. Except as listed on Exhibit 7.1.16 and except as would not reasonably be
expected to have a Material Adverse Effect, (i) neither Borrower nor any
Guarantor is in breach of, or default under, any term of any license or
sublicense with respect to any of its Intellectual Property and (ii) to the
knowledge of Borrower, no other party to such license or sublicense is in breach
thereof or default thereunder, and such license is valid and enforceable.
7.1.17 Governmental Consents. Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all governmental
consents, approvals, licenses, authorizations, permits, certificates,
inspections and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it.
7.1.18 Compliance with Laws. Borrower and each of its
Subsidiaries has duly complied in all material respects with, and its
Properties, business operations and leaseholds are in compliance in all material
respects with, the provisions of all federal, state and local laws, rules and
regulations applicable to Borrower or such Subsidiary, as applicable, its
Properties or the conduct of its business, and there have been no citations,
notices or orders of noncompliance issued to Borrower or any of its Subsidiaries
under any such law, rule or regulation. Borrower and each of its Subsidiaries
has established and maintains an adequate monitoring system to insure that it
remains in compliance in all material respects with all federal, state and local
rules, laws and regulations applicable to it. No Inventory has been produced by
Borrower or any of its Subsidiaries in violation of the Fair Labor Standards Act
(29 U.S.C. Section 201 et seq.), as amended.
7.1.19 Restrictions. Neither Borrower nor any Guarantor is a
party or subject to any contract or agreement which restricts its right or
ability to incur Indebtedness, other than as set forth on Exhibit 7.1.19 hereto,
none of which prohibit the execution of or compliance with this Agreement or the
other Loan Documents by Borrower or any Guarantor, as applicable. Except as
permitted in the Loan Agreement, none of the Collateral is subject to
contractual obligations that may restrict or inhibit Agent's rights or abilities
to sell or dispose of the Collateral or any part thereof after the occurrence
and during the continuance of an Event of Default.
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7.1.20 Litigation. Except as set forth on Exhibit 7.1.20
hereto, there are no actions, suits, proceedings or investigations pending, or
to the knowledge of Borrower, threatened, against or involving Borrower or any
of its Subsidiaries, or the business, operations, Properties, prospects, profits
or condition of Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, judgment, decree or rule of any court, governmental
authority or arbitration board or tribunal, which, singly or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
7.1.21 No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or Borrower's performance hereunder, constitute a Default or an Event of
Default. Neither Borrower nor any Guarantor is in default in (and no event has
occurred and no condition exists which constitutes, or which the passage of time
or the giving of notice or both would constitute, a default in) the payment of
any Indebtedness to any Person for Funded Debt in excess of the lesser of
$1,000,000 or that amount which would have a Material Adverse Effect. All
Obligations constitute Indebtedness permitted under the Senior Note Indenture
and the other Senior Note Documents.
7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing
of all capitalized and operating personal property leases of Borrower and
Guarantors and all real property leases of Borrower and Guarantors. Borrower and
each Guarantor is in full compliance with all of the terms of each of its
respective capitalized and operating leases, except where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect.
7.1.23 Pension Plans. Except as disclosed on Exhibit 7.1.23
hereto, neither Borrower nor any of its Subsidiaries has any Plan. Borrower and
each of its Subsidiaries is in compliance with the requirements of ERISA and the
regulations promulgated thereunder with respect to each Plan, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect. No fact or situation that would reasonably be expected to result in a
material adverse change in the financial condition of Borrower and Guarantors
exists in connection with any Plan. Neither Borrower nor any Guarantor has any
material withdrawal liability in connection with a Multiemployer Plan.
7.1.24 Trade Relations. Except as set forth on Exhibit
7.1.24, there exists no actual or, to Borrower's knowledge, threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship between Borrower or any Guarantor and any customer or
any group of customers whose purchases individually or in the aggregate are
material to the business of Borrower and Guarantors (taken as a whole), or with
any material supplier, except in each case, where the same would not reasonably
be expected to have a Material Adverse Effect, and there exists no present
condition or state of facts or circumstances which would prevent Borrower or any
Guarantor from conducting such business after the consummation of the
transaction contemplated by this Agreement in substantially the same manner in
which it has heretofore been conducted.
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7.1.25 Labor Relations. Except as described on Exhibit
7.1.25 hereto, as of the date hereof, neither Borrower nor any of its
Subsidiaries is a party to any collective bargaining agreement covering any
material number of employees. There are no material grievances, disputes or
controversies with any union or any other organization of Borrower's or any of
its Subsidiaries' employees, or threats of strikes, work stoppages or any
asserted pending demands for collective bargaining by any union or organization,
except those that would not reasonably be expected to have a Material Adverse
Effect.
7.2 Continuous Nature of Representations and Warranties. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be continuous in nature and shall remain accurate, complete in
all material respects and not misleading at all times during the term of this
Agreement (on each day as if made on and as of such date, except to the extent
that any representation and warranty is made only as of a specified date, in
which case it shall have been true and correct as of such date), except for
changes in the nature of Borrower's or one of Borrower's Subsidiary's business
or operations that would render the information in any exhibit attached hereto
or to any other Loan Document either inaccurate, incomplete or misleading, so
long as Majority Lenders have consented to such changes or such changes are
expressly permitted by this Agreement.
7.3 Survival of Representations and Warranties. All
representations and warranties of Borrower or any Guarantor contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Agent and each Lender and the parties thereto
and the closing of the transactions described therein or related thereto.
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants. During the Term, and thereafter for so
long as there are any Obligations outstanding, Borrower covenants that, unless
otherwise consented to by Majority Lenders, in writing, it shall:
8.1.1 Visits and Inspections; Lender Meeting. Permit
representatives of Agent, and during the continuation of any Default or Event of
Default any Lender, from time to time, as often as may be reasonably requested,
but only during normal business hours, to visit and inspect the Properties of
Borrower and each of its Subsidiaries, inspect, audit and make extracts from its
books and records, and discuss with its officers, its employees and its
independent accountants, Borrower's and each of its Subsidiaries' business,
assets, liabilities, financial condition, business prospects and results of
operations. Agent, if no Default or Event of Default then exists, shall give
Borrower reasonable prior notice of any such inspection or audit. Without
limiting the foregoing, Borrower will participate and will cause its key
management personnel to participate in a meeting with Agent and Lenders at least
once during each year or more frequently, as Agent may reasonably request
(except that during the continuation of an Event of Default such meetings may be
held more frequently as requested by Agent or Majority Lenders), which
meeting(s) shall be held at such times and such places as may be reasonably
requested by Agent.
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8.1.2 Notices.
(a) Promptly notify Agent in writing of the occurrence of
any event or the existence of any fact that, in either case, is known to
Borrower, which renders any representation or warranty in this Agreement or any
of the other Loan Documents inaccurate, incomplete or misleading in any material
respect as of the date made or remade. In addition, Borrower agrees to provide
Agent with (i) 10 Business Days' prior written notice of (1) any change in the
legal name of Borrower or any Guarantor, (2) the adoption by Borrower or any
Guarantor of any new fictitious name or tradename and (3) any change in the
chief executive office of Borrower or any Guarantor, and (ii) prompt written
notice of any change in the information disclosed in any Exhibit hereto, in each
case after giving effect to the materiality limits and Material Adverse Effect
qualifications contained therein.
(b) Promptly, and in any event within ten (10) Business
Days after the Borrower or any of its Subsidiaries becomes aware that a
Reportable Event involving a claim against, or possible liability of, the
Borrower of at least $250,000 has occurred, a written statement of the chief
financial officer of the Borrower describing such Reportable Event and any
action that is being taking with respect thereto by the Borrower or any such
Subsidiary, and any action taken or threatened by the Internal Revenue Service,
Department of Labor or Pension Benefit Guaranty Corporation.
(c) Promptly, and in any event within ten (10) Business
Days after receipt by the Borrower or any of its Subsidiaries of any notice,
complaint or order alleging actual or prospective violation of any
environmental, health or safety Legal Requirement by the Borrower or any of its
Subsidiaries or alleging responsibility of the Borrower or any of its
Subsidiaries for costs of a cleanup, together with a copy of such notice,
complaint, or order and a written statement describing any action being taken
with respect thereto by the Borrower or any such Subsidiary.
8.1.3 Financial Statements. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account with respect to its
business activities in which proper entries are made in accordance with
customary accounting practices reflecting all its financial transactions; and
cause to be prepared and furnished to Agent and each Lender, the following, all
to be prepared in accordance with GAAP applied on a consistent basis, unless
Borrower's certified public accountants concur in any change therein and such
change is disclosed to Agent and is consistent with GAAP:
(i) as soon as available, but not later than 90 days after the
close of each fiscal year of Borrower, unqualified (except for a qualification
for a change in accounting principles with which the accountant concurs) audited
financial statements (including, but not limited to, balance sheet, income
statement and statement of cash flows) of Borrower and its Subsidiaries as of
the end of such year, on a Consolidated basis, certified by a firm of
independent certified public accountants of recognized standing selected by
Borrower but reasonably acceptable to Agent, together with unaudited
consolidating balance sheets, income statements and statements of cash flows
and, within a reasonable time thereafter a copy of any management letter issued
in connection therewith;
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(ii) as soon as available, but not later than 30 days
after the end of each month hereafter, including the last month of Borrower's
fiscal year, unaudited interim financial statements (including, but not limited
to, balance sheet, income statement and statement of cash flows) of Borrower and
its Subsidiaries as of the end of such month and of the portion of the fiscal
year then elapsed, on a Consolidated basis, certified by the principal financial
officer of Borrower as prepared in accordance with GAAP and fairly presenting in
all material respects the financial position and results of operations of
Borrower and its Subsidiaries for such month and period subject only to changes
from audit and year-end adjustments and except that such statements need not
contain notes and, at Agent's request, unaudited interim financial statements on
a consolidating basis, in a form consistent with Borrower's historical practices
of preparation of consolidating financial statements;
(iii) as soon as available, but not later than 45 days
after the end of each fiscal quarter of Borrower, including the last quarter of
Borrower's fiscal year, unaudited quarterly financial statements (including, but
not limited to, balance sheet, income statement and statement of cash flows) of
Borrower and its Subsidiaries as of the end of such fiscal quarter, on a
Consolidated basis, certified by the principal financial officer of Borrower as
prepared in accordance with GAAP and fairly presenting in all material respects
the financial position and results of operations of Borrower and its
Subsidiaries for such fiscal quarter and period subject only to changes from
audit and year-end adjustments and except that such statements need not contain
notes and, at Agent's request, unaudited interim financial statements on a
consolidating basis, in a form consistent with Borrower's historical practices
of preparation of consolidating financial statements;
(iv) together with each delivery of financial statements
pursuant to clauses (i) and (iii) of this Subsection 8.1.3, a management report
(1) setting forth in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding figures
from the most recent Projections for the current fiscal year delivered pursuant
to Subsection 8.1.8 and (2) identifying the reasons for any significant
variations. The information above shall be presented in reasonable detail and
shall be certified by the chief financial officer of Borrower to the effect that
such information fairly presents in all material respects the results of
operations and financial condition of Borrower and its Subsidiaries as at the
dates and for the periods indicated;
(v) promptly after the sending or filing thereof, as the
case may be, copies of Borrower's Forms 10Q and 10K and any proxy statements or
financial statements which Borrower has made available to its Securities holders
and copies of any regular, periodic and special reports or registration
statements which Borrower or any of its Subsidiaries files with the Securities
and Exchange Commission or any governmental authority which may be substituted
therefore, or any national securities exchange;
(vi) upon request of Agent, copies of any annual report to
be filed with ERISA in connection with each Plan; and
(vii) such other data and information (financial and
otherwise) as Agent or any Lender, from time to time, may reasonably request,
bearing upon or related to the
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Collateral or Borrower's or any of its Subsidiaries' financial condition or
results of operations.
Concurrently with the delivery of the financial statements
described in paragraph (i) of this Subsection 8.1.3, Borrower shall forward to
Agent a copy of the accountants' letter to Borrower's management that is
prepared in connection with such financial statements and also shall cause to be
prepared and shall furnish to Agent a certificate of the aforesaid certified
public accountants certifying to Agent that, based upon their examination of the
financial statements of Borrower and its Subsidiaries performed in connection
with their examination of said financial statements, they are not aware of any
Default or Event of Default, or, if they are aware of such Default or Event of
Default, specifying the nature thereof. Concurrently with the delivery of the
financial statements described in paragraph (i) and (iii) of this Subsection
8.1.3, or more frequently if reasonably requested by Agent, Borrower shall cause
to be prepared and furnished to Agent a Compliance Certificate in the form of
Exhibit 8.1.3 hereto executed by the Chief Financial Officer of Borrower.
8.1.4 Borrowing Base Certificates. On or before the 15th
calendar day of each month and at any other time requested by Agent or Majority
Lenders from and after the date hereof, deliver to Agent and, at the request of
any Lender, to such Lender a Borrowing Base Certificate as of the last day of
the immediately preceding month (or as of such other date as Agent may
reasonably request), with such supporting materials as Agent shall reasonably
request.
8.1.5 Landlord, Processor and Storage Agreements. Provide
Agent on request with copies of all agreements between Borrower or any Guarantor
and any landlord, processor, distributor, warehouseman or consignee which owns
any premises at which any Collateral may, from time to time, be kept.
8.1.6 Collateral Access Agreements. Deliver or cause to be
delivered to Agent satisfactory Collateral Access Agreements from landlords and
bailees covering at least eighty percent (80%) of the book value of Inventory of
Borrower and its Subsidiaries at locations owned or leased by Borrower or any of
its Subsidiaries at which such Inventory is maintained when not leased to
customers.
8.1.7 Guarantor Financial Statements. Deliver or cause to
be delivered to Agent financial statements, if any, for each Guarantor (to the
extent not consolidated with the financial statements delivered to Agent under
Subsection 8.1.3) in form and substance satisfactory to Agent at such intervals
and covering such time periods as Agent may request.
8.1.8 Projections. No later than 15 days after the end of
each fiscal year of Borrower and, promptly following completion of any Permitted
Acquisition with a purchase price of $10,000,000 or more or for which
Acquisition and all other Permitted Acquisitions completed since the last
delivery under this Subsection 8.1.8 the aggregate purchase prices exceed
$10,000,000, deliver to Agent Projections of Borrower and each of its
Subsidiaries for the forthcoming three (3) fiscal years, month by month
(including, but not limited to,
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projected balance sheets, income statements, statements of cash flows and
Availability and calculations of projected covenant compliance).
8.1.9 Subsidiaries. Cause each Subsidiary of Borrower,
whether now or hereafter in existence, promptly upon Agent's request therefore,
to execute and deliver to Agent a Guaranty Agreement and a security agreement
pursuant to which such Subsidiary guaranties the payment of all Obligations and
grants to Agent for the benefit of Lenders a first priority Lien (subject only
to Permitted Liens) on all of its Properties of the types described in
Subsection 5.1. Additionally, Borrower and each Subsidiary shall execute and
deliver to Agent a Pledge Agreement (or an amendment thereto) pursuant to which
Borrower or such Subsidiary grants to Agent for the benefit of the Lenders a
first priority Lien (subject only to Permitted Liens) with respect to all of the
issued and outstanding Securities of each such Subsidiary.
8.1.10 [intentionally omitted]
8.1.11 Deposit and Brokerage Accounts. For each deposit
account or brokerage account that Borrower or any Guarantor at any time opens or
maintains, Borrower shall, at Agent's request and option, pursuant to an
agreement in form and substance satisfactory to Agent, cause the depository bank
or securities intermediary, as applicable, to agree to comply at any time with
instructions from Agent to such depository bank or securities intermediary, as
applicable, directing the disposition of funds from time to time credited to
such deposit or brokerage account, without further consent of Borrower or such
Guarantor.
8.1.12 Maintenance of Equipment. Make or cause to be made
all necessary replacements of and repairs to Equipment so that the operating
efficiency thereof shall be maintained and preserved, reasonable wear and tear
excepted, except where the failure to so maintain the same would not reasonably
be expected to have a Material Adverse Effect. Borrower will not, and will not
allow any Guarantors to, permit any Equipment to become affixed to any real
Property leased to Borrower or any Guarantor so that an interest arises therein
under the real estate laws of the applicable jurisdiction unless the landlord of
such real Property has executed a landlord waiver or leasehold mortgage in favor
of and in form reasonably acceptable to Agent, and Borrower will not permit, nor
will it allow any Guarantor to permit, any of the Equipment of Borrower or any
Guarantor to become an accession to any personal Property other than Equipment
that is subject to first priority (except for Permitted Liens) Liens in favor of
Agent.
8.1.13 Environmental Reports. Prior to inclusion of any
Specified Real Property in the Borrowing Base, provide Agent with environmental
reports, in form and substance satisfactory to Agent and Majority Lenders and
from a firm satisfactory to Agent, relating to the properties owned by Borrower
or any of its Subsidiaries.
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8.2 Negative Covenants. During the Term, and thereafter for so
long as there are any Obligations outstanding, Borrower covenants that, unless
otherwise consented to by Majority Lenders, in writing:
8.2.1 Capital Expenditures. Borrower and its Subsidiaries
shall not make payments for Capital Expenditures (net of sales of Eligible
Container Fleet Inventory) in excess of $115,000,000 in any fiscal year;
provided, that as long as no Event of Default shall have occurred and be
continuing, Borrower and its Subsidiaries may carry forward and add to the next
year's limitation amount (but not beyond such next year) the unused portion of
the limitation on Capital Expenditures for the prior year, up to a maximum of
one hundred percent (100%) of the prior year's limitation amount; and provided,
further, that the amount set forth in this Subsection 8.2.1 shall be increased
by an amount equal to three hundred percent (300%) of the net cash proceeds
received by Borrower from any sale of equity Securities of Borrower less such
amount of such net cash proceeds used to redeem or repurchase Senior Notes in
compliance with this Agreement (the "CapEx Equity Increase"), and the unused
portion of any CapEx Equity Increase may be carried forward to any subsequent
fiscal year. Borrower and its Subsidiaries shall not make any Capital
Expenditures that are not directly related to the business conducted on the
Original Closing Date by Borrower and its Subsidiaries.
8.2.2 Additional Indebtedness. Neither Borrower nor any of
its Subsidiaries shall directly or indirectly incur, create, assume or suffer to
exist any Indebtedness other than:
(a) Indebtedness under the Loan Documents and Derivative
Obligations under which a Lender (or its Affiliate) is the counterparty incurred
in the ordinary course of business;
(b) Unsecured Derivative Obligations incurred in the
ordinary course of business;
(c) Indebtedness described on Exhibit 8.2.2, and any
refinancing of such Indebtedness, so long as the aggregate principal amount of
the Indebtedness so refinanced shall not be increased and the refinancing shall
be on terms and conditions no more restrictive than the terms and conditions of
the Indebtedness to be refinanced;
(d) Indebtedness, including Capitalized Lease
Obligations, secured by purchase money liens on or respecting Equipment the
title to or leasehold interest in which is acquired after the Original Closing
Date, not to exceed $2,500,000 in the aggregate (irrespective of when due)
outstanding at any one time ("Purchase Money Liens and Leases") so long as each
Purchase Money Lien or Lease shall attach or relate only to the property to be
acquired or the acquisition cost of which is financed through leasing, a
description shall have been furnished to Agent for any item of equipment for
which the purchase price (whether payable by Borrower or the lessor thereof) is
greater than $50,000 and the principal amount of the debt incurred (including
the principal component of lease payments) shall not exceed one hundred percent
(100%) of the purchase price of the item or items of equipment;
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(e) Indebtedness consisting of loans or advances by
Borrower to a Guarantor or by a Guarantor to Borrower or another Guarantor;
provided that all such loans and advances are evidenced by a promissory note,
which is pledged to Agent;
(f) the Senior Notes; and
(g) Indebtedness (other than Indebtedness under this
Agreement) incurred to finance insurance premiums, not to exceed $2,500,000 in
any fiscal year.
8.2.3 Liens. Neither Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume, or suffer to exist any Lien
on any of its property now owned or hereafter acquired except:
(a) Liens granted to Agent for the benefit of the Lenders
under the Security Documents to secure the Obligations;
(b) Liens listed on Exhibit 8.2.3;
(c) Liens for taxes not yet due or being contested in
good faith and by appropriate proceedings to the extent permitted under this
Agreement;
(d) Purchase Money Liens and Leases;
(e) Liens of warehousemen, mechanics, materialmen,
workers, repairmen, common carriers, or landlords, liens for taxes, assessments
or other governmental charges, and other similar Liens arising by operation of
law for amounts that are not yet due and payable or which are being diligently
contested in good faith by Borrower or a Guarantor, and for which adequate
reserves are maintained by Borrower for their payment;
(f) Attachment or judgment Liens not to exceed an
aggregate of $500,000 (other than the Nuko Judgment) excluding in each case
amounts (i) bonded to the reasonable satisfaction of Agent or (ii) covered by
insurance to the reasonable satisfaction of Agent;
(g) Deposits or pledges to secure obligations under
worker's compensation, social security or similar laws, or under unemployment
insurance, not to exceed an aggregate of $1,500,000;
(h) Deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business not to exceed an aggregate of
$1,000,000;
(i) Easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of Borrower or any of its Subsidiaries;
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(j) Extensions and renewals of any of the foregoing so
long as the aggregate amount of extended or renewed Liens are not increased and
are on terms and conditions no more restrictive than the terms and conditions of
the Liens extended or renewed; and
(k) Liens securing Indebtedness described in Subsection
8.2.2(d) which has been refinanced so long as such refinanced Indebtedness is
not secured by any collateral which did not secure the Indebtedness prior to
such refinancing.
8.2.4 Contingent Obligations. Neither Borrower nor any of
its Subsidiaries shall directly or indirectly incur, assume, or suffer to exist
any Contingent Obligation, excluding indemnities given in connection with the
sale of Inventory or other asset dispositions permitted hereunder and Contingent
Obligations for Indebtedness permitted to be incurred under Subsection 8.2.2
hereof.
8.2.5 Sale of Assets. Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, sell, lease, assign,
transfer or otherwise dispose of any assets other than (i) Inventory (including
containers held for lease) in the ordinary course of business, (ii) individual
items of Collateral with a book value of less than $1,000,000 in the aggregate
during any fiscal year, (iii) obsolete or worn out property disposed of in the
ordinary course of business, (iv) dispositions of assets not otherwise addressed
by this Subsection 8.2.5 with an aggregate fair market value not in excess of
$1,000,000 in any fiscal year, (v) to the extent permitted by the Senior Note
Indenture, sales of container Inventory held for lease for the purpose of
securitization or like off-balance sheet financing with the prior written
consent of Agent and the Lenders, which consent shall not be unreasonably
withheld, (vi) transfers of Inventory and Equipment from Borrower to a
Guarantor, or from one Guarantor to another Guarantor or to Borrower, and (vii)
sales of Trailers acquired in Permitted Acquisitions or owned by Borrower or a
Guarantor on the date hereof; provided that, with respect to clauses (ii),
(iii), (iv), (v), and (vii), (a) such dispositions are for fair value, (b) the
aggregate consideration is paid in full in cash at the time of disposition and
is either reinvested in the business of Borrower or its Subsidiaries (subject to
the limitations of this Agreement) or used to repay Revolving Credit Loans in
accordance with Section 3.3.3 and (viii) sales of Equipment which Borrower or a
Guarantor will lease back under a capital lease permitted under Section 8.2.2(d)
or an operating lease permitted under Section 8.2.13.
8.2.6 Restricted Payments. Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, (a) declare or
pay any dividend (other than dividends payable solely in common stock of
Borrower) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Securities of
Borrower or any warrants, options or rights to purchase any such Securities
(other than up to $10,000 of payments to call warrants with respect to
Borrower's common stock), whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of Borrower or any of its Subsidiaries (each
of the foregoing, a "Restricted Payment") except that any Subsidiary may declare
and pay dividends to Borrower or any other Subsidiary of Borrower which is a
Guarantor; or (b) make any payment or prepayment of principal of, or any
prepayment of interest on, or any
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redemption (including, without limitation, by making payments to a sinking or
analogous fund), repurchase or defeasance of, any Indebtedness (other than
Indebtedness pursuant to this Agreement) or of any Mandatory Redeemable
Obligation; provided that (i) any Subsidiary may make payments on account of
Indebtedness owing to Borrower or any other Subsidiary, (ii) on or prior to July
1, 2006, Borrower may repurchase or redeem up to 35% of the aggregate principal
amount of the Senior Notes outstanding on the Restatement Date and pay accrued
interest and premium thereon with the proceeds of the issuance of Borrower's
Securities in an "Equity Offering" under and as defined in the Senior Note
Indenture if, both before and after giving effect to such repurchase or
redemption, no Default or Event of Default exists and Borrower has Availability
of at least $20,000,000; (iii) Borrower may repurchase or redeem Senior Notes
for an aggregate payment of no more than $25,000,000 (including principal,
premium and interest) if, both before and after giving effect to such repurchase
or redemption, no Default or Event of Default exists and Borrower has
Availability of at least $50,000,000, (iv) on or before June 30, 2003, Borrower
may terminate Derivative Obligations outstanding and pay the costs of such
termination, and (v) Borrower and its Subsidiaries may make scheduled principal
and interest payments on Indebtedness permitted under Subsections 8.2.2(a), (b),
(c), (d) and (g) and scheduled interest payments on the Senior Notes.
8.2.7 Investments. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, make any Investment in any
Person, whether in cash, securities, or other property of any kind including,
without limitation, any Subsidiary or Affiliate of Borrower, other than:
(a) Advances or loans (but not sales on open account on
ordinary course of business terms) made in the ordinary course of business,
including those made to finance the sale of Inventory, not to exceed $50,000
outstanding at any one time to any one Person and $250,000 in the aggregate
outstanding at any one time;
(b) loans, investments and advances between Borrower and
Guarantors permitted under this Agreement;
(c) Cash Equivalents;
(d) Permitted Acquisitions;
(e) Deposits with financial institutions, disclosed on
Exhibit 8.2.7, and which are insured by the Federal Deposit Insurance
Corporation ("FDIC") or a similar federal insurance program; provided, however,
that Borrower may, in the ordinary course of its business, maintain in its
disbursement accounts from time to time amounts in excess of then applicable
FDIC or other program insurance limits; and
(f) Such other Investments as Majority Lenders may
approve in writing in their sole discretion.
8.2.8 Affiliate Transactions. Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, enter into any
transaction with, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service to, any
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Subsidiary or Affiliate of Borrower, except (a) the transactions in existence on
the Restatement Date as described on Exhibit 8.2.8, (b) transactions between or
among Borrower and its wholly-owned Subsidiaries which are Guarantors and (c)
transactions in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's or Affiliate's business, as the
case may be, and upon fair and reasonable terms no less favorable to Borrower or
such Subsidiary than could be obtained in a comparable arm's-length transaction
with an unaffiliated Person.
8.2.9 Additional Bank Accounts. Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, open,
maintain or otherwise have any checking, savings or other accounts at any bank
or other financial institution, or any other account where money is or may be
deposited or maintained with any Person, other than its disbursement account,
the account with Bank described in Subsection 3.3.5 and the accounts set forth
on Exhibit 8.2.7, and such other accounts as have been previously approved by
Agent. Borrower's primary collection accounts and at least 75% of all other
deposit accounts of Borrower and Guarantors shall be subject to a blocked
account or control agreement in form and substance satisfactory to Agent.
8.2.10 Excess Cash. Except upon prior written consent of
Agent, Borrower shall not, and shall not permit its Subsidiaries to, directly or
indirectly, maintain in the aggregate in all deposit accounts of Borrower and
its Subsidiaries (other than the payroll accounts and the account with Bank
described in Subsection 3.3.5), total cash balances and Investments permitted by
Subsection 8.2.7(c), in excess of an average daily balance of $750,000,
exclusive of uncollected funds, (calculated monthly) for any three consecutive
months during which any Revolving Credit Loans are outstanding hereunder and no
disbursement account shall contain more than $5,000.
8.2.11 Additional Negative Pledges. Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective, (i) any prohibition or
restriction (including any agreement to provide equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of Agent
and the Lenders) on the creation or existence of any Lien upon the assets of
Borrower or its Subsidiaries or (ii) any contractual obligation which may
restrict or inhibit Agent's rights or ability to sell or otherwise dispose of
the Collateral or any part thereof after the occurrence of an Event of Default,
other than pursuant to the Senior Note Documents as in effect on the Restatement
Date.
8.2.12 No Subsidiaries. Borrower shall not, directly or
indirectly, form or acquire any new Subsidiaries, except (a) in connection with
Permitted Acquisitions in compliance with Subsection 8.2.14, and (b) if each of
the following conditions is met:
(i) each new Subsidiary is a wholly-owned Subsidiary of
Borrower created to conduct business in a specific jurisdiction;
(ii) both before and after giving effect to the creation
of such Subsidiary and the transfer of any assets from Borrower to such
Subsidiary, all representations and warranties of Borrower and its Subsidiaries
contained in any Loan Document are true and
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correct, on and as of such date as if made as of such date (except (x) such
revisions as are necessary to reflect the formation of such new Subsidiary and
(y) to the extent a representation and warranty was made only as of a specified
date, such representation and warranty shall have been true and correct as of
such date), no Default or Event of Default shall have occurred and be
continuing, and Borrower and its Subsidiaries shall be Solvent;
(iii) Borrower shall have delivered to Agent written notice
at least fifteen (15) Business Days prior to consummation of any transfer of
assets to, or acquisition of assets by, such new Subsidiary, describing in
reasonable detail the proposed new Subsidiary and its assets;
(iv) any such new Subsidiary shall become a Guarantor, and
shall have executed and delivered to Agent such Security Documents (or joinders
thereto, in form and substance satisfactory to Agent) and other documents as are
necessary (or advisable in Agent's judgment) under applicable law in order to
grant Agent for the benefit of the Lenders a perfected first priority security
interest and Lien in the assets of, and ownership interests in, such Subsidiary
(subject only to Permitted Liens); and Borrower shall execute and deliver an
amendment to the Pledge Agreement in form and substance satisfactory to Agent,
together with stock certificates and promissory notes and other instruments
endorsed in blank, to pledge all equity interests in such new Subsidiary and all
intercompany Loans to such Subsidiary;
(v) if required by Agent, Agent shall have received
opinions of counsel, in form and substance satisfactory to it, as to the due
execution, delivery and enforceability of the Loan Documents executed by such
new Subsidiary, together with such evidences of solvency, certificates,
Certificates of Title, and other documents and instruments reasonably requested
by Agent; and
(vi) there shall be no more than twelve (12) Subsidiaries.
8.2.13 Operating Leases, Off-Balance Sheet Financing.
Neither Borrower nor any of its Subsidiaries shall directly or indirectly incur,
create, assume or suffer to exist any liabilities for operating leases or other
indebtedness or liabilities not reflected as such on their financial statements
other than liabilities described on Exhibit 8.2.13, and any refinancing of such
liabilities, so long as the aggregate amount thereof so refinanced shall not be
increased and the refinancing shall be on terms and conditions no more
restrictive than the terms and conditions of the liabilities to be refinanced;
provided, however, that Borrower and its Subsidiaries may incur liabilities in
connection with operating leases of real property (including office and yard
space) and office Equipment in the ordinary course of business and of other
Equipment with values of up to $2,500,000 in any fiscal year (exclusive of
Equipment acquired under operating leases executed prior to the Original Closing
Date and listed on Exhibit 8.2.13) (and up to 50% of any amount not incurred in
any fiscal year may be carried over to the next fiscal year).
8.2.14 Permitted Acquisitions. Borrower shall not, and shall
not permit any of its Subsidiaries to, make an Acquisition unless each of the
following conditions is satisfied:
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(a) such Acquisition is made by Borrower or a Guarantor;
(b) such Acquisition shall be consensual and, if required
under state law, shall have been approved by the board of directors or other
governing body of the Person to be acquired (if there is such a governing body)
and shall be permitted by the Senior Note Documents;
(c) both before and after giving effect to such
Acquisition, all representations and warranties of Borrower and its Subsidiaries
contained in any Loan Document are true and correct on such date as if made as
of such date (except to the extent that a representation and warranty was made
only as of a specified date, such representation and warranty shall have been
true and correct as of such date) and no Default or Event of Default shall have
occurred and be continuing, and Agent shall receive a certificate of Borrower to
such effect on the date on which such Acquisition is consummated;
(d) both before and after giving effect to such
Acquisition and the incurrence of Indebtedness in connection therewith, Borrower
and its Subsidiaries (including any Subsidiary acquired in such Acquisition)
shall be Solvent and Borrower shall be in compliance with all financial
covenants on Exhibit 8.3 hereof on a pro forma basis, and Agent shall receive a
certificate of Borrower to such effect on the date on which such Acquisition is
consummated;
(e) the purchase price for Acquisitions shall not exceed
(i) $10,000,000 individually, (ii) $30,000,000 in the aggregate for any fiscal
year, and (iii) $100,000,000 in the aggregate for all Acquisitions consummated
after the Original Closing Date. For purposes hereof, any Indebtedness assumed
in connection with an Acquisition shall be included in the calculation of the
purchase price;
(f) Borrower shall have delivered written notice of the
pending Acquisition to Agent and the Lenders at least fifteen (15) Business Days
prior to its consummation (or such lesser period as agreed by Agent) including a
detailed description of such pending Acquisition, and if the purchase price for
such Acquisition is $5,000,000 or more, such notice shall be accompanied by
historical financial statements for the Person or business to be acquired, if
reasonably required by Agent, and preliminary pro forma financial statements
giving effect to the Acquisition, in each case in form and substance reasonably
satisfactory to Agent, analyses of sources and uses of funds, pro forma
calculations of compliance with the financial covenants on Exhibit 8.3 hereof
and, prior to consummation of the Acquisition, such other due diligence
information as may have been reasonably requested by Agent or any Lender;
(g) if a Revolving Credit Loan is to be made in
connection with such Acquisition, Agent shall have received a Notice of
Borrowing and, if Borrower desires to include the assets to be acquired in the
Borrowing Base for such Revolving Credit Loan, a Borrowing Base Certificate;
(h) As soon as reasonably practicable following
consummation of the Acquisition, Agent shall have received such financing
statements, filings, Certificates of Title
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and other Security Documents as required (or advisable in Agent's judgment) to
create and perfect Liens on any assets to be acquired, including assets of any
new Subsidiary, together with evidence (including Lien search results)
satisfactory to Agent that such Liens are first and prior Liens subject only to
Permitted Liens;
(i) all new Subsidiaries formed or acquired in such
Permitted Acquisition shall be wholly-owned, directly or indirectly, by
Borrower;
(j) the business and assets to be acquired in such
Acquisition shall be acquired free and clear of all Liens (other than Permitted
Liens);
(k) any new Subsidiary shall become a Guarantor and shall
execute and deliver to Agent such Security Documents as are required to be
executed by a Guarantor (or joinder agreements in form and substance
satisfactory to Agent) and such other documents as are necessary (or advisable
in Agent's judgment) under applicable law in order to grant Agent for the
benefit of the Lenders a perfected first priority security interest and Lien in
the assets of, and ownership interests in, such Subsidiary (subject only to
Permitted Liens); and Borrower or its Subsidiary, as applicable, shall execute
and deliver an amendment to the Pledge Agreement in form and substance
satisfactory to Agent, together with stock certificates and promissory notes and
other instruments endorsed in blank in accordance therewith;
(l) prior to inclusion of any assets in the Borrowing
Base, if Agent in its reasonable discretion requires, Agent shall have received
appraisals, in form and substance satisfactory to Agent, of all Inventory and
Equipment to be included in the Borrowing Base and shall have completed such
review of Accounts and Inventory as it deems necessary or desirable for
inclusion in the Borrowing Base;
(m) the Person or business to be acquired is engaged in
the business conducted by Borrower and its Subsidiaries immediately prior to the
Closing Date or similar activities related or incidental thereto; and
(n) in the case of any Acquisition with a purchase price
of $5,000,000 or more, on or prior to the date of such Acquisition, Agent shall
have received, in form and substance satisfactory to Agent, all acquisition
documents related thereto and certificates, and other documents and instruments
reasonably requested by Agent, which collectively shall confirm, to Agent's
satisfaction that the conditions set forth herein have been satisfied
8.2.15 Amendments of Senior Note Documents. Borrower shall
not, nor permit any Subsidiary of Borrower to, amend or modify any Senior Note
Document, other than to add Subsidiaries of Borrower as guarantors thereunder.
All Subsidiaries of Borrower which are guarantors of the Senior Notes shall be
Guarantors.
8.2.16 Securities of Subsidiaries. Borrower shall not permit
any of its Subsidiaries to issue any additional Securities except director's
qualifying Securities.
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8.2.17 Xxxx-and-Hold Sales, Etc. Borrower shall not make, or
permit any Subsidiary of Borrower to make, a sale to any customer on a
xxxx-and-hold or consignment basis.
8.2.18 Tax Consolidation. Borrower shall not file or consent
to the filing of any consolidated income tax return with any Person other than
Borrower's Subsidiaries.
8.2.19 Organizational Documents. Borrower shall not agree
to, or suffer to occur, any amendment, supplement or addition to its or any of
its Subsidiaries' charter, articles or certificate of incorporation, certificate
of formation, limited partnership agreement, bylaws, limited liability
agreement, operating agreement or other organizational documents (as the case
may be), that would reasonably be expected to have a Material Adverse Effect.
8.2.20 Fiscal Year End. Borrower shall not change, or permit
any Subsidiary of Borrower to change, its fiscal year end.
8.3 Specific Financial Covenants. During the Term, and thereafter
for so long as there are any Obligations outstanding, Borrower covenants that,
unless otherwise consented to by Majority Lenders in writing, it shall comply
with all of the financial covenants set forth in Exhibit 8.3 hereto. If GAAP
changes from the basis used in preparing the audited financial statements
delivered to Agent by Borrower on or before the Restatement Date, Borrower will
provide Agent with certificates demonstrating compliance with such financial
covenants and will include, at the election of Borrower or upon the request of
Agent, calculations setting forth the adjustments necessary to demonstrate how
Borrower is in compliance with such financial covenants based upon GAAP as in
effect on the Restatement Date.
SECTION 9. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any
of the other Loan Documents, and without affecting in any manner the rights of
Agent or any Lender under the other sections of this Agreement, this Agreement
shall not become effective and no Lender shall be required to make any Loan, nor
shall Agent be required to or issue or procure any Letter of Credit or LC
Guaranty unless and until each of the following conditions has been and
continues to be satisfied and this Agreement has become effective in accordance
with Section 12.7:
9.1 Documentation. Agent shall have received, in form and
substance satisfactory to Agent and its counsel, a duly executed copy of this
Agreement, the Revolving Notes, the Master Assignment Agreement, the
Reaffirmations and amendments to the Mortgages, together with such additional
documents, instruments and certificates as Agent and its counsel shall require
in connection therewith from time to time, all in form and substance
satisfactory to Agent and its counsel.
9.2 No Default; Representations and Warranties. No Default or
Event of Default shall exist and all representation and warranties made by
Borrower or any Guarantor in any Loan Document shall be true and correct on such
date as if made as of such date (except to the extent a representation and
warranty was made only as of a specified date, in which case it shall have been
true and correct as of such date).
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9.3 No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted or proposed before any
court, governmental agency or legislative body to enjoin, restrain or prohibit,
or to obtain damages in respect of, or which is related to or arises out of this
Agreement or the Senior Notes or the consummation of the transactions
contemplated hereby or thereby, or which could have a Material Adverse Effect.
9.4 Material Adverse Effect. Since the date of Borrower's most
recent audited financial statements, there has not been any material adverse
change in the business, assets, financial condition, income or prospects of
Borrower and its Subsidiaries, taken as a whole, and no event or condition
exists which would be reasonably likely to result in any Material Adverse
Effect.
9.5 Cash Management System; Lockboxes. Borrower and its
Subsidiaries shall have established cash management systems for their respective
operations in accordance with Subsection 6.2.4 and on terms and conditions
satisfactory to Agent.
9.6 Lien Perfection; Title Insurance. Borrower and its
Subsidiaries shall have delivered to Agent such documents as requested by Agent
to perfect or to continue the perfection of the Liens granted to Agent for the
benefit of the Lenders and evidence that Agent has duly perfected first priority
Liens in the assets of Borrower and its Subsidiaries, subject only to Permitted
Liens. Agent shall have received policies of title insurance or endorsements
thereto satisfactory in form and substance to Agent and its counsel or
commitments therefor, insuring that the Mortgages, as amended, constitute first
priority Liens on the Specified Real Property, subject only to Permitted Liens.
9.7 Insurance. Agent shall have received and approved evidence of
insurance coverage in amount and scope, and Borrower's insurers shall have
provided endorsements in form and substance satisfactory to Agent naming Agent,
for the benefit of the Lenders, as loss payee for all casualty insurance and
business interruption insurance, with customary lender loss payable
endorsements, and naming Agent as an additional insured with respect to all
other insurance.
9.8 Senior Notes. The Senior Notes shall bear interest at a rate
not in excess of 11% per annum, and the Senior Notes and the Senior Note
Indenture shall have such other terms satisfactory to the Lenders. On the
Restatement Date, concurrently with the effectiveness of this Agreement,
Borrower shall issue Senior Notes in an aggregate principal amount of
$150,000,000 and shall receive the net cash proceeds of the issuance of such
Senior Notes and apply such proceeds to pay termination costs of certain
Derivative Obligations, to pay transaction costs associated with this Agreement
and the Senior Notes and the balance to prepay the Obligations in accordance
with Subsection 3.3.3 hereof.
9.9 Opinions. Agent shall have received opinions of outside
counsel to Borrower and Guarantors, in form and substance reasonably
satisfactory to Agent and its counsel.
9.10 Existing Credit Agreement. On the Restatement Date, all
Revolving Credit Loans shall have been converted to Base Rate Loans, all amounts
owing under the Existing Credit Agreement to Prior Lenders which are not Lenders
hereunder shall have been paid
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(including interest, fees and costs required by Section 3.2.5 of the Existing
Loan Agreement), and Borrower shall have paid to Agent and the Lenders all
interest, fees and costs (including those required by Section 3.2.5 of the
Existing Loan Agreement) due under the Existing Loan Agreement and the Loan
Documents.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default. The occurrence of one or more of the
following events shall constitute an "Event of Default":
10.1.1 Payment of Obligations. Borrower shall fail to pay
(i) any of the Obligations hereunder (other than any fees not having a scheduled
due date) or under any Note on the due date thereof (whether due at stated
maturity, on demand, upon acceleration or otherwise) or (ii) any fees not having
a scheduled due date within two (2) Business Days after Borrower's receipt of
demand therefore.
10.1.2 Misrepresentations. Any representation, warranty or
other statement made or furnished to Agent or any Lender by or on behalf of
Borrower, any Subsidiary of Borrower or any Guarantor in this Agreement, any of
the other Loan Documents or any instrument, certificate or financial statement
furnished in compliance with or in reference thereto proves to have been false
or misleading in any material respect when made, furnished or remade pursuant to
Section 7.2 hereof.
10.1.3 Breach of Specific Covenants. Borrower shall (i) fail
or neglect to perform, keep or observe any covenant contained in Subsections
6.1.2, 8.1.1, 8.1.2, 8.1.4, 8.2 or 8.3 hereof on the date that Borrower is
required to perform, keep or observe such covenant or shall (ii) fail or neglect
to perform, keep or observe any covenant contained in Sections 5.2 or 8.1.3
hereof within ten (10) Business Days following the date on which Borrower is
required to perform, keep or observe such covenant.
10.1.4 Breach of Other Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in Section
10.1 hereof) or any other Loan Document and the breach of such other covenant is
not cured to Agent's satisfaction by the earlier to occur of ten (10) Business
Days after (i) the date Borrower or such Subsidiary or Guarantor knew or should
have known of such occurrence and (ii) the date of giving of notice thereof by
Agent to Borrower.
10.1.5 Change of Control. A Change of Control shall occur.
10.1.6 Cross Default. A default or event of default shall
occur (and continue beyond any applicable grace period) under any note,
agreement or instrument evidencing any other Indebtedness of the Borrower or any
of its Subsidiaries, which default or event of default permits the acceleration
of its maturity, provided that the aggregate principal amount of all such
Indebtedness for which the default or event of default has occurred exceeds
$5,000,000.
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10.1.7 Failure of Enforceability of Loan Documents;
Security. Any material covenant, agreement or Obligation of Borrower or any
Guarantor contained in or evidenced by any of the Loan Documents shall cease to
be enforceable, or shall be determined to be unenforceable, in accordance with
its terms; Borrower or any Guarantor shall deny or disaffirm any of its material
Obligations under any of the Loan Documents or any Liens granted in connection
therewith; or, any Liens granted in any of the Collateral shall be determined to
be void, voidable, invalid or unperfected, are subordinated or not given the
priority contemplated by this Agreement (except where such circumstance arises
as a result of any action or inaction by any Lender).
10.1.8 Uninsured Losses. Any material loss, theft, damage or
destruction of any portion of the Collateral having a fair market value of the
lesser of (i) $5,000,000 in the aggregate or (ii) 20% of Availability at such
time, if not fully covered (subject to such deductibles and self-insurance
retentions as Agent shall have permitted) by insurance.
10.1.9 Insolvency and Related Proceedings. Borrower, any
Subsidiary of Borrower or any Guarantor shall cease to be Solvent or shall
suffer the appointment of a receiver, trustee, custodian or similar fiduciary,
or shall make an assignment for the benefit of creditors, or any petition for an
order for relief shall be filed by or against Borrower, any Subsidiary of
Borrower or any Guarantor under the federal bankruptcy laws (if against
Borrower, any Subsidiary of Borrower or any Guarantor the continuation of such
proceeding for more than 30 days), or Borrower, any Subsidiary of Borrower or
any Guarantor shall make any offer of settlement, extension or composition to
their respective unsecured creditors generally.
10.1.10 Business Disruption; Condemnation. There shall occur
a cessation of a substantial part of the business of Borrower, any Subsidiary of
Borrower or any Guarantor for a period which materially adversely affects
Borrower's, such Subsidiary's or such Guarantor's capacity to continue its
business on a profitable basis; or Borrower, any Subsidiary of Borrower or any
Guarantor shall suffer the loss or revocation of any material license or permit
now held or hereafter acquired by Borrower, any Subsidiary of Borrower or any
Guarantor which is necessary to the continued or lawful operation of its
business; or Borrower, any Subsidiary of Borrower or any Guarantor shall be
enjoined, restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of its business
affairs; or any material lease or agreement pursuant to which Borrower, any
Subsidiary of Borrower or any Guarantor leases, uses or occupies any Property
shall be canceled or terminated prior to the expiration of its stated term,
except any such lease or agreement the cancellation or termination of which
would not reasonably be expected to have a Material Adverse Effect; or any
material portion of the Collateral shall be taken through condemnation or the
value of such Property shall be impaired through condemnation.
10.1.11 ERISA. A Reportable Event shall occur which, in
Agent's determination, constitutes grounds for the termination by the Pension
Benefit Guaranty Corporation of any Plan or for the appointment by the
appropriate United States district court of a trustee for any Plan, or if any
Plan shall be terminated or any such trustee shall be requested or appointed, or
if Borrower, any Subsidiary of Borrower or any other Guarantor is in "default"
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to a
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Multiemployer Plan resulting from Borrower's, such Subsidiary's or such
Guarantor's complete or partial withdrawal from such Plan and any such event
would reasonably be expected to have a Material Adverse Effect.
10.1.12 Criminal Forfeiture. Borrower, any Subsidiary of
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could lead to a forfeiture of any Property of Borrower, any Subsidiary
of Borrower or any Guarantor.
10.1.13 Judgments. Any money judgments, writ of attachment or
similar processes (collectively, "Judgments") are issued or rendered against
Borrower, any Subsidiary of Borrower or any other Guarantor, or any of their
respective Property (i) in the case of money judgments other than the Nuko
Judgment, in an amount of $1,000,000 or more for any single judgment, attachment
or process or $1,500,000 or more for all such judgments, attachments or
processes in the aggregate, in each case in excess of any applicable insurance
with respect to which the insurer has admitted liability, and (ii) in the case
of non-monetary Judgments, such Judgment or Judgments (in the aggregate) would
reasonably be expected to have a Material Adverse Effect, in each case which
Judgment is not stayed, released or discharged within 30 days.
10.2 Acceleration of the Obligations. Upon or at any time after the
occurrence and during the continuance of an Event of Default, (i) the Agent may
(with the consent of the Majority Lenders) and shall at the direction of the
Majority Lenders terminate the Revolving Loan Commitments and/or (ii) the Agent
may (with the consent of the Majority Lenders) and shall at the direction of the
Majority Lenders declare all or any portion of the Obligations other than
Derivative Obligations (and all such Obligations shall thereupon become) at once
due and payable without presentment, demand, protest or further notice by Agent
or any Lender, and Borrower shall forthwith pay to Agent, the full amount of
such Obligations, provided, that upon the occurrence of an Event of Default
specified in Subsection 10.1.9 hereof, all of the Obligations shall become
automatically due and payable without declaration, notice or demand by Agent or
any Lender, and the Revolving Loan Commitments shall be terminated.
10.3 Other Remedies. Upon the occurrence and during the continuance
of an Event of Default, Agent shall have and may (and shall at the direction of
the Majority Lenders) exercise on behalf of the Lenders from time to time the
following rights and remedies:
10.3.1 All of the rights and remedies of a secured party
under the UCC or under other applicable law, and all other legal and equitable
rights to which Agent or Lenders may be entitled, all of which rights and
remedies shall be cumulative and shall be in addition to any other rights or
remedies contained in this Agreement or any of the other Loan Documents, and
none of which shall be exclusive.
10.3.2 The right to take immediate possession of the
Collateral, and to (i) require Borrower and each of its Subsidiaries to assemble
the Collateral, at Borrower's expense, and make it available to Agent at a place
designated by Agent which is reasonably convenient to both parties, and (ii)
enter any premises where any of the Collateral shall be located and to keep and
store the Collateral on said premises until sold (and if said premises
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be the Property of Borrower or any Subsidiary of Borrower, Borrower agrees not
to charge, or permit any of its Subsidiaries to charge, Agent for storage
thereof).
10.3.3 The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as Agent, in
its sole discretion, may deem advisable. Agent may, at Agent's option, disclaim
any and all warranties regarding the Collateral in connection with any such
sale. Borrower agrees that five (5) Business Days' written notice to Borrower or
any of its Subsidiaries of any public or private sale or other disposition of
Collateral shall be reasonable notice thereof, and such sale shall be at such
locations as Agent may designate in said notice. Agent shall have the right to
conduct such sales on Borrower's or any of its Subsidiaries' premises, without
charge therefore, and such sales may be adjourned from time to time in
accordance with applicable law. Agent shall have the right to sell, lease or
otherwise dispose of the Collateral, or any part thereof, for cash, credit or
any combination thereof, and Agent, on behalf of Lenders, may purchase all or
any part of the Collateral at public or, if permitted by law, private sale and,
in lieu of actual payment of such purchase price, may set off the amount of such
price against the Obligations. The proceeds realized from the sale of any
Collateral may be applied, after allowing two (2) Business Days for collection,
first to the costs, expenses and attorneys' fees incurred by Agent in collecting
the Obligations (other than Derivative Obligations), in enforcing the rights of
Agent and Lenders under the Loan Documents and in collecting, retaking,
completing, protecting, removing, storing, advertising for sale, selling and
delivering any Collateral, second to the interest due upon any of the
Obligations (other than Derivative Obligations), third, to the principal of the
Obligations (other than Derivative Obligations), and fourth to any other
Obligations, including Derivative Obligations and any costs of collection of any
Derivative Obligations. If any deficiency shall arise, Borrower and each
Guarantor shall remain jointly and severally liable to Agent and Lenders
therefore.
10.3.4 Agent is hereby granted a license or other right to
use, without charge, Borrower's and each of its Subsidiary's labels, patents,
copyrights, licenses, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, consistent with Borrower's reasonable quality
control requirements, or any Property of a similar nature, as it pertains to the
Collateral, in completing, advertising for sale and selling any Collateral and
Borrower's and each of its Subsidiary's rights under all licenses and all
franchise agreements shall inure to Agent's benefit.
10.3.5 Agent may, at its option, require Borrower to deposit
with Agent funds equal to 105% of the sum of (x) the LC Amount and (y) all
unpaid LC Obligations and, if Borrower fails to promptly make such deposit,
Agent may advance such amount as a Revolving Credit Loan (whether or not an
Overadvance is created thereby). Each such Revolving Credit Loan shall be
secured by all of the Collateral and shall bear interest and be payable at the
same rate and in the same manner as Loans. Any such deposit or advance shall be
held by Agent as a reserve to fund future payments on such LC Guaranties and
future drawings against such Letters of Credit, including fees and charges
related to Letters of Credit and LC Guaranties. At such time as all LC
Guaranties have been paid or terminated and all Letters of Credit have been
drawn upon or expired, any amounts remaining in such reserve
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shall be applied against any outstanding Obligations, or, if all Obligations
have been indefeasibly paid in full, returned to Borrower.
10.4 Set Off and Sharing of Payments. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, during the continuance of any Event of Default, each Lender is
hereby authorized by Borrower at any time or from time to time, with prior
written consent of Agent and with reasonably prompt subsequent notice to
Borrower (any prior or contemporaneous notice to Borrower being hereby expressly
waived) to set off and to appropriate and to apply any and all (i) balances held
by such Lender at any of its offices for the account of Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to Borrower or
its Subsidiaries), and (ii) other property at any time held or owing by such
Lender to or for the credit or for the account of Borrower or any of its
Subsidiaries, against and on account of any of the Obligations; provided, that
each Lender exercising such rights shall notify Agent thereof prior to exercise,
shall refrain from exercising such right until Agent shall have confirmed to
such Lender that such exercise will not prejudice the rights of the Lenders, and
any amount received as a result of the exercise of such rights shall be shared
in accordance with Subsection 3.8. Any Lender exercising a right to set off
shall, to the extent the amount of any such set off exceeds its Revolving Loan
Percentage of the amount set off, purchase for cash (and the other Lenders shall
sell) interests in each such other Lender's pro rata share of the Obligations as
would be necessary to cause such Lender to share such excess with each other
Lender in accordance with their respective Revolving Loan Percentages. Borrower
agrees, to the fullest extent permitted by law, that any Lender may exercise its
right to set off with respect to amounts in excess of its pro rata share of the
Obligations and upon doing so shall deliver such excess to Agent for the benefit
of all Lenders in accordance with the Revolving Loan Percentages.
10.5 Remedies Cumulative; No Waiver. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings of
Borrower and its Subsidiaries contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule or in any Guaranty Agreement given to
Agent or any Lender or contained in any other agreement between any Lender and
Borrower or any of its Subsidiaries or between Agent and Borrower or any of its
Subsidiaries heretofore, concurrently, or hereafter entered into, shall be
deemed cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of Borrower herein contained. The failure
or delay of Agent or any Lender to require strict performance by Borrower or any
of its Subsidiaries of any provision of this Agreement or to exercise or enforce
any rights, Liens, powers, or remedies hereunder or under any of the aforesaid
agreements or other documents or security or Collateral shall not operate as a
waiver of such performance, Liens, rights, powers and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in full force
and effect until all Loans and other Obligations owing or to become owing from
Borrower or any of its Subsidiaries to Agent and each Lender have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrower or any of its Subsidiaries contained in this
Agreement or any of the other Loan Documents and no Event of Default by Borrower
under this Agreement or any other Loan Documents shall be deemed to have been
suspended or waived by Lenders, unless such suspension or waiver is by an
instrument in
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writing specifying such suspension or waiver and is signed by a duly authorized
representative of Majority Lenders or all Lenders (as required by Section 11.10)
or by Agent, at the direction of Majority Lenders or all Lenders, as the case
may be and directed to Borrower.
SECTION 11. THE AGENT
11.1 Authorization and Action. Each Lender hereby appoints and
authorizes Agent to take such action on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Lender hereby acknowledges that Agent shall not have by
reason of this Agreement assumed a fiduciary relationship in respect of any
Lender. In performing its functions and duties under this Agreement, Agent shall
act solely as agent of Lenders and shall not assume, or be deemed to have
assumed, any obligation toward, or relationship of agency or trust with or for,
Borrower or any of its Subsidiaries. As to any matters not expressly provided
for by this Agreement and the other Loan Documents (including without limitation
enforcement and collection of the Notes), Agent may, but shall not be required
to, exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, whenever such
instruction shall be requested by Agent or required hereunder, or a greater or
lesser number of Lenders if so required hereunder, and such instructions shall
be binding upon all Lenders; provided, that Agent shall be fully justified in
failing or refusing to take any action which exposes Agent to any liability or
which is contrary to this Agreement, the other Loan Documents or applicable law,
unless Agent is indemnified to its satisfaction by the other Lenders against any
and all liability and expense which it may incur by reason of taking or
continuing to take any such action. If Agent seeks the consent or approval of
the Majority Lenders (or a greater or lesser number of Lenders as required in
this Agreement), with respect to any action hereunder, Agent shall send notice
thereof to each Lender and shall notify each Lender at any time that the
Majority Lenders (or such greater or lesser number of Lenders) have instructed
Agent to act or refrain from acting pursuant hereto.
11.2 Agent's Reliance, Etc. Neither Agent, any Affiliate of Agent,
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Agent: (i) may treat each Lender party hereto as
the holder of Obligations until Agent receives written notice of the assignment
or transfer or such lender's portion of the Obligations signed by such Lender
and in form reasonably satisfactory to Agent; (ii) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (iii)
makes no warranties or representations to any Lender and shall not be
responsible to any Lender for any recitals, statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Documents; (iv) shall not have any duty beyond Agent's customary practices in
respect of loans in which Agent is the only lender, to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
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of this Agreement or the other Loan Documents on the part of Borrower or any of
its Subsidiaries, to inspect the property (including the books and records) of
Borrower or any of its Subsidiaries, to monitor the financial condition of
Borrower or to ascertain the existence or possible existence or continuation of
any Default or Event of Default; (v) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto; (vi) shall not be liable to
any Lender for any action taken, or inaction, by Agent upon the instructions of
Majority Lenders pursuant to Section 11.1 hereof or refraining to take any
action pending such instructions; (vii) shall not be liable for any
apportionment or distributions of payments made by it in good faith pursuant to
Section 3 hereof; (viii) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate, message or other instrument or writing (which may be by telephone,
facsimile, telegram, cable or telex) believed in good faith by it to be genuine
and signed or sent by the proper party or parties; and (ix) may assume that no
Event of Default has occurred and is continuing, unless Agent has actual
knowledge of the Event of Default, has received notice from Borrower or
Borrower's independent certified public accounts stating the nature of the Event
of Default, or has received notice from a Lender stating the nature of the Event
of Default and that such Lender considers the Event of Default to have occurred
and to be continuing. In the event any apportionment or distribution described
in clause (vii) above is determined to have been made in error, the sole
recourse of any Person to whom payment was due but not made shall be to recover
from the recipients of such payments any payment in excess of the amount to
which they are determined to have been entitled.
11.3 Fleet and Affiliates. With respect to its commitment hereunder
to make Loans, Fleet shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the terms "Lender," "Lenders" or "Majority
Lenders" shall, unless otherwise expressly indicated, include Fleet in its
individual capacity as a Lender. Fleet and its Affiliates may lend money to, and
generally engage in any kind of business with, Borrower and its Subsidiaries and
Affiliates, and any Person who may do business with or own Securities of
Borrower all as if Fleet were not Agent and without any duty to account
therefore to any other Lender.
11.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements referred to herein and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement. Agent shall not have any duty or responsibility, either
initially or on an ongoing basis, to provide any Lender with any credit or other
similar information regarding Borrower or any of its Subsidiaries.
11.5 Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by Borrower), in accordance with their respective
Aggregate Percentages, from
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and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement; provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse Agent
promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower. The
obligations of Lenders under this Section 11.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Agent to Lenders, any Lender or any other Person,
including Borrower, any creditor of Borrower, a liquidator, administrator or
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse Agent
for all such amounts.
11.6 Rights and Remedies to be Exercised by Agent Only. Each Lender
agrees that, except as set forth in Section 10.4, no Lender shall have any right
individually (i) to realize upon the security created by this Agreement or any
other Loan Document, (ii) to enforce any provision of this Agreement or any
other Loan Document, or (iii) to make demand under this Agreement or any other
Loan Document.
11.7 Agency Provisions Relating to Collateral. Each Lender
authorizes and ratifies Agent's entry into this Agreement and the Security
Documents for the benefit of Lenders. Each Lender agrees that any action taken
by Agent with respect to the Collateral in accordance with the provisions of
this Agreement or the Security Documents, and the exercise by Agent of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all Lenders.
Agent is hereby authorized on behalf of all Lenders, without the necessity of
any notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or the Loan
Documents which may be necessary to perfect and maintain perfected Agent's Liens
upon the Collateral, for its benefit and the ratable benefit of Lenders. Lenders
hereby irrevocably authorize Agent, at its option and in its discretion, to (a)
release any Lien granted to or held by Agent upon any Collateral (i) upon
termination of the Agreement and payment and satisfaction of all Obligations; or
(ii) constituting property being sold or disposed of to a Person other than
Borrower or any of its Subsidiaries if Borrower certifies to Agent that the sale
or disposition is made in compliance with Subsection 8.2.5 hereof (and Agent may
rely conclusively on any such certificate, without further inquiry); or (iii)
constituting property in which Borrower or such Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; (iv) constituting
property subject to an operating lease permitted by Subsection 8.2.13; or (v) in
connection with any foreclosure sale or other disposition of Collateral after
the occurrence and during the continuation of an Event
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of Default or (vi) if approved, authorized or ratified in writing by Agent at
the direction of all Lenders and (b) subordinate any Lien granted to Agent on
Equipment if required by the holder of any Indebtedness (including Capitalized
Lease Obligations) secured by Purchase Money Liens and Leases permitted
hereunder. Upon request by Agent at any time, Lenders will confirm in writing
Agent's authority to release particular types or items of Collateral pursuant
hereto, or subordinate Liens on Equipment. Agent shall have no obligation
whatsoever to any Lender or to any other Person to assure that the Collateral
exists or is owned by Borrower or any of its Subsidiaries or is cared for,
protected or insured or has been encumbered or that the Liens granted to Agent
herein or pursuant to the Security Documents have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of its
rights, authorities and powers granted or available to Agent in this Section
11.7 or in any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, Agent
may act in any manner it may deem appropriate, in its sole discretion, but
consistent with the provisions of this Agreement, including given Agent's own
interest in the Collateral as a Lender and that Agent shall have no duty or
liability whatsoever to any Lender.
11.8 Agent's Right to Purchase Commitments. Agent shall have the
right, but shall not be obligated, at any time upon written notice to any Lender
and with the consent of such Lender, which may be granted or withheld in such
Lender's sole discretion, to purchase for Agent's own account all of such
Lender's interests in this Agreement, the other Loan Documents and the
Obligations, for the face amount of the outstanding Obligations owed to such
Lender, including without limitation all accrued and unpaid interest and fees.
11.9 Right of Sale, Assignment, Participations. Borrower hereby
consents to any Lender's participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this Agreement and any of the
other Loan Documents, or of any portion hereof or thereof, including, without
limitation, such Lender's rights, title, interests, remedies, powers, and duties
hereunder or thereunder subject to the terms and conditions set forth below:
11.9.1 Sales, Assignments. Each Lender hereby agrees that,
with respect to any sale or assignment (i) no such sale or assignment shall be
for an amount of less than $5,000,000, (ii) each such sale or assignment shall
be made on terms and conditions which are customary in the industry at the time
of the transaction, (iii) Agent and, in the absence of a Default or Event of
Default, Borrower, must consent, such consent not to be unreasonably withheld,
to each such assignment to a Person that is not an original signatory to this
Agreement or any Affiliate thereof, and (iv) the assignee Lender shall pay to
Agent a processing and recordation fee of $3,500 and any reasonable
out-of-pocket attorneys' fees and expenses incurred by Agent in connection with
any such sale or assignment. After such sale or assignment has been consummated
(x) the assignee Lender thereupon shall become a "Lender" for all purposes of
this Agreement and (y) the assigning Lender shall have no further liability for
funding the portion of Revolving Loan Commitments assumed by such other Lender.
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11.9.2 Participations. Any Lender may grant participations
in its extensions of credit hereunder to any other Lender or other lending
institution (a "Participant"), provided that (i) no such participation shall be
for an amount of less than $5,000,000, (ii) no Participant shall thereby acquire
any direct rights under this Agreement, (iii) no Participant shall be granted
any right to consent to any amendment, except to the extent any of the same
pertain to (1) reducing the aggregate principal amount of, or interest rate on,
or fees applicable to, any Loan or (2) extending the final stated maturity of
any Loan or the stated maturity of any portion of any payment of principal of,
or interest or fees applicable to, any of the Loans; provided, that the rights
described in this subclause (2) shall not be deemed to include the right to
consent to any amendment with respect to or which has the effect of requiring or
waiving any mandatory prepayment of any portion of any Loan or any amendment or
waiver of any Default or Event of Default, (iv) no sale of a participation in
extensions of credit shall in any manner relieve the originating Lender of its
obligations hereunder, (v) the originating Lender shall remain solely
responsible for the performance of such obligations, (vi) Borrower and Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (vii) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of Agent,
and, in the absence of a Default or an Event of Default, Borrower, which
consents shall not unreasonably be withheld and (viii) all amounts payable by
Borrower hereunder shall be determined as if the originating Lender had not sold
any such participation.
11.9.3 Certain Agreements of Borrower. Borrower agrees that
(i) it will use its best efforts to assist and cooperate with each Lender in any
manner reasonably requested by such Lender to effect the sale of participation
in or assignments of any of the Loan Documents or any portion thereof or
interest therein, including, without limitation, assisting in the preparation of
appropriate disclosure documents and making members of management available at
reasonable times to meet with and answer questions of potential assignees and
Participants; and (ii) subject to the provisions of Section 12.14 hereof, such
Lender may disclose credit information regarding Borrower to any potential
Participant or assignee.
11.9.4 Non U.S. Resident Transferees. If, pursuant to this
Section 11.9, any interest in this Agreement or any Loans is transferred to any
transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof, the transferor Lender shall cause such
transferee (other than any Participant), and may cause any Participant,
concurrently with and as a condition precedent to the effectiveness of such
transfer, to (i) represent to the transferor Lender (for the benefit of the
transferor Lender, Agent, and Borrower) that under applicable law and treaties
no taxes will be required to be withheld by Agent, Borrower or the transferor
Lender with respect to any payments to be made to such transferee in respect of
the interest so transferred, (ii) furnish to the transferor Lender, Agent and
Borrower either United States Internal Revenue Service Form W-8ECI or United
States Internal Revenue Service Form W-8BEN (wherein such transferee claims
entitlement to complete exemption from United States federal withholding tax on
all interest payments hereunder), and (iii) agree (for the benefit of the
transferor Lender, Agent and Borrower) to provide the transferor Lender, Agent
and Borrower a new Form W-8ECI or Form W-8BEN upon the obsolescence of any
previously delivered form and comparable statements in accordance with
applicable United States laws and regulations and amendments
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duly executed and completed by such transferee, and to comply from time to time
with all applicable United States laws and regulations with regard to such
withholding tax exemption.
11.10 Amendments. No amendment or waiver of any provision of this
Agreement or any other Loan Document (including without limitation any Note),
nor consent to any departure by Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Lenders
and Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that
no amendment, waiver or consent shall be effective, unless (i) in writing and
signed by each Lender, if such amendment, waiver or consent does any of the
following: (1) increases the aggregate Revolving Loan Commitments, or any
Lender's Revolving Loan Commitment, (2) reduces the principal of, or interest
on, any amount payable hereunder or under any Note, or any fees payable to
Lenders hereunder, other than those payable only to Fleet in its capacity as
Agent or Letter of Credit issuer, which may be reduced by Fleet unilaterally,
(3) decreases any interest rate payable hereunder or any fee payable to Lenders
hereunder, other than those payable to Fleet in its capacity as Agent or Letter
of Credit issuer, which may be reduced by Fleet unilaterally, (4) postpones any
date fixed for any payment of principal of, or interest on, any amounts payable
hereunder or under any Note, other than those payable only to Fleet in its
capacity as Agent, which may be postponed by Fleet unilaterally, (5) reduces the
number of Lenders that shall be required for Lenders or any of them to take any
action hereunder, (6) releases or discharge any Person liable for the
performance of any Obligations of Borrower hereunder or under any of the Loan
Documents, (7) amends any provision of this Agreement that requires the consent
of all Lenders or consent to or waive any breach thereof, (8) amends the
definition of the term "Majority Lenders", (9) amends this Section 11.10, (10)
releases Collateral with a value in excess of $5,000,000, unless otherwise
permitted pursuant to Section 11.7 hereof; or (11) increases the advance rates
contained in the definition of "Borrowing Base" to a level greater than those
set forth on the date hereof; or (12) amends the definitions of "Borrowing Base"
(or any component thereof) or "Availability Reserve" to make such definitions
less restrictive (provided that the foregoing shall not affect Agent's
discretion in determining eligibility) or (13) amends the pro rata sharing
provisions of Section 3.8 hereof, or (ii) in writing and signed by Agent in
addition to the Lenders required above to take such action, if such action
affects the rights or duties of Agent under this Agreement, any Note or any
other Loan Document.
11.11 Resignation of Agent; Appointment of Successor. Agent may
resign as Agent by giving not less than thirty (30) days prior written notice to
the Lenders and Borrower. If Agent shall resign under this Agreement, then, (i)
subject to the consent of Borrower (which consent shall not be unreasonably
withheld and which consent shall not be required during any period in which a
Default or an Event of Default exists), the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders or (ii) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following Agent's notice to the Lenders and Borrower of its resignation, then
Agent shall appoint a successor agent who shall serve as Agent until such time
as the Majority Lenders appoint a successor agent, subject to Borrower's consent
as set forth above. Upon its appointment, such successor agent shall succeed to
the rights, powers and duties of Agent and the term "Agent" shall mean such
successor effective upon its appointment, and the former Agent's rights, powers
and duties as Agent shall be terminated without any other or further act or deed
on the part of such
-57-
former Agent or any of the parties to this Agreement. After the resignation of
any Agent hereunder, the provisions of this Section 11 shall inure to the
benefit of such former Agent and such former Agent shall not by reason of such
resignation be deemed to be released from liability for any actions taken or not
taken by it while it was an Agent under this Agreement.
11.12 Co-Agents. The co-Documentation Agents and co-Syndication
Agents shall have no right, duty, responsibility or obligation under this
Agreement and the other Loan Documents other than in their capacities as
Lenders, and shall have no fiduciary relationship to any Person.
SECTION 12. MISCELLANEOUS
12.1 Power of Attorney. Borrower hereby irrevocably designates,
makes, constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact), solely with respect to
the matters set forth in this Section 12.1, and Agent, or Agent's agent, may,
without notice to Borrower and in Borrower's or Agent's name, but at the cost
and expense of Borrower:
12.1.1 At such time or times as Agent or said agent, in its
sole discretion, may determine, endorse Borrower's name on any checks, notes,
acceptances, drafts, money orders or any other evidence of payment or proceeds
of the Collateral which come into the possession of Agent or under Agent's
control.
12.1.2 At such time or times upon or after the occurrence
and during the continuance of an Event of Default (provided that the occurrence
of an Event of Default shall not be required with respect to clauses (iv),
(viii) and (ix) below), as Agent or its agent in its sole discretion may
determine: (i) demand payment of the Accounts from the Account Debtors, enforce
payment of the Accounts by legal proceedings or otherwise, and generally
exercise all of Borrower's rights and remedies with respect to the collection of
the Accounts; (ii) settle, adjust, compromise, discharge or release any of the
Accounts or other Collateral or any legal proceedings brought to collect any of
the Accounts or other Collateral; (iii) sell or assign any of the Accounts and
other Collateral upon such terms, for such amounts and at such time or times as
Agent deems advisable; (iv) take control, in any manner, of any item of payment
or proceeds relating to any Collateral; (v) prepare, file and sign Borrower's
name to a proof of claim in bankruptcy or similar document against any Account
Debtor or to any notice of lien, assignment or satisfaction of lien or similar
document in connection with any of the Collateral; (vi) receive, open and
dispose of all mail addressed to Borrower and notify postal authorities to
change the address for delivery thereof to such address as Agent may designate;
(vii) endorse the name of Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account of Agent on
account of the Obligations; (viii) endorse the name of Borrower upon any chattel
paper, document, instrument, invoice, freight xxxx, xxxx of lading or similar
document or agreement relating to the Accounts, Inventory and any other
Collateral; (ix) use Borrower's stationery and sign the name of Borrower to
verifications of the Accounts and notices thereof to Account Debtors; (x) use
the information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts, Inventory, Equipment
and any other Collateral; (xi) make and adjust claims under policies of
insurance; and (xii) do all other
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acts and things necessary, in Agent's determination, to fulfill Borrower's
obligations under this Agreement.
The power of attorney granted hereby shall constitute a power
coupled with an interest and shall be irrevocable.
12.2 Indemnity. Borrower hereby agrees to indemnify Agent and each
Lender (and each of their Affiliates) and hold Agent and each Lender (and each
of their Affiliates) harmless from and against any liability, loss, damage,
suit, action or proceeding ever suffered or incurred by any such Person
(including reasonable attorneys fees (or allocated costs of in-house counsel in
lieu of outside counsel) and legal expenses) as the result of the failure of
Borrower or any of its Subsidiaries to observe, perform or discharge Borrower's
duties hereunder or under any other Loan Document or arising out of, relating to
or in connection with this Agreement and the other Loan Documents or the use of
the proceeds thereof, except as to any such Person to the extent that such
liability, loss or damage is found in a non-appealable judgment by a court of
competent jurisdiction to have resulted from such Person's own gross negligence
or willful misconduct. In addition, Borrower shall defend Agent and each Lender
(and each of their Affiliates) against and save it harmless from all claims of
any Person with respect to the Collateral (except those resulting from the gross
negligence or intentional misconduct of any such Person). Notwithstanding any
contrary provision in this Agreement, the obligation of Borrower under this
Section 12.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.
12.3 Sale of Interest. Borrower may not sell, assign or transfer
any interest in this Agreement, any of the other Loan Documents, or any of the
Obligations, or any portion thereof, including, without limitation, Borrower's
rights, title, interests, remedies, powers, and duties hereunder or thereunder
without the prior written consent of all Lenders, which consent by any Lender or
Lenders may be granted or denied in the sole discretion of such Lender.
12.4 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
12.5 Successors and Assigns. This Agreement, the Other Agreements
and the Security Documents shall be binding upon and inure to the benefit of the
successors and assigns of Borrower, Agent and each Lender permitted under
Section 11.9 hereof.
12.6 Cumulative Effect; Conflict of Terms. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in any of the other
Loan Documents by specific reference to the applicable provision of this
Agreement, if any provision contained in this Agreement is in direct conflict
with, or inconsistent with, any provision in any of the other Loan Documents,
the provision contained in this Agreement shall govern and control.
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12.7 Execution in Counterparts; Effectiveness. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. This Agreement shall become
effective upon the execution of a counterpart of the Master Assignment Agreement
by each party thereto and the execution of a counterpart hereof by Borrower,
each Lender and the Agent and delivery of such counterparts to Agent or its
counsel (which execution and delivery may be by facsimile) and upon receipt by
the Agent of written (including by facsimile) notification of such execution and
authorization of delivery thereof; provided that unless and until all conditions
set forth in Section 9 have been satisfied or waived, the Existing Loan
Agreement shall remain in full force and effect as if this Agreement had never
been executed and delivered.
12.8 Notices. Except as otherwise provided herein, all notices,
requests and demands to or upon a party hereto, to be effective, shall be in
writing and shall be sent by certified or registered mail, return receipt
requested, by personal delivery against receipt, by overnight courier or by
facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, delivered or received immediately when
delivered against receipt, one Business Day after deposit with an overnight
courier or, in the case of facsimile notice, when sent, addressed as follows:
If to Agent: Fleet Capital Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Loan Administration Manager
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxx 0xx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile No.: (000) 000-0000
If to Borrower: Mobile Mini, Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx Xxxx LLP
Two N. Central, 22nd Floor
Phoenix, Arizona 85004
Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon a
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Lender pursuant to Subsection 3.1.1 or 4.2.2 hereof shall not be effective until
received by such Lender.
12.9 Consent. Whenever Agent's or Majority's Lenders' consent is
required to be obtained under this Agreement, any of the Other Agreements or any
of the Security Documents as a condition to any action, inaction, condition or
event, except as otherwise specifically provided herein, Agent or Majority
Lenders, as applicable, shall be authorized to give or withhold such consent in
their sole and absolute discretion.
12.10 Credit Inquiries. Borrower hereby authorizes and permits Agent
and each Lender to respond to usual and customary credit inquiries from third
parties concerning Borrower or any of its Subsidiaries.
12.11 Time of Essence. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.
12.12 Entire Agreement. This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or written.
12.13 Interpretation. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
12.14 Confidentiality. Agent and each Lender shall hold all
nonpublic information obtained pursuant to the requirements of this Agreement in
accordance with Agent's and such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any governmental
authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this Section
12.14.
12.15 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN
NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN LOS
ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT IF
ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN
CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND
PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE
ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE
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LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF
CALIFORNIA. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS
OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER,
AGENT OR ANY LENDER, BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT
OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT AGENT'S OPTION, THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER ON
THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS
AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. BORROWER
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH
BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE
ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY
OTHER APPROPRIATE FORUM OR JURISDICTION.
12.16 WAIVERS BY BORROWER. BORROWER WAIVES (i) THE RIGHT TO TRIAL BY
JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE
LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND
PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY,
RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL
PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND
GUARANTIES AT ANY TIME HELD BY AGENT OR ANY LENDER ON WHICH BORROWER MAY IN ANY
WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY
DO IN THIS REGARD; (iii) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF
THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (iv) THE BENEFIT OF
ALL VALUATION,
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APPRAISEMENT AND EXEMPTION LAWS; AND (v) NOTICE OF ACCEPTANCE HEREOF. BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT'S AND
EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT AGENT AND EACH LENDER IS
RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWER.
BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12.17 Increases In Total Revolving Loan Commitments.
12.17.1 Increasing Lenders and New Lenders. If the Revolving
Loan Commitments are reduced to less than $250,000,000 as a result of a
mandatory reduction pursuant to Subsection 3.3.1, Borrower may on no more than
two occasions and no more than once in any calendar year, by notice to the
Agent, request that the Revolving Loan Commitments be increased to an amount up
to $250,000,000 in the aggregate (the amount of any increase effected hereunder,
the "Commitment Increase"); provided, that (i) in no event shall the Revolving
Loan Commitments exceed the lesser of $250,000,000 and the amount of
Indebtedness and Liens permitted to be incurred under the Senior Note Indenture,
(ii) any Commitment Increase shall be in the minimum amount of $5,000,000, (iii)
on the date on which any Commitment Increase is effective, no Default or Event
of Default shall exist, both before and after giving effect to such Commitment
Increase and (iv) all conditions set forth in Section 9 have been satisfied or
waived in accordance with this Agreement. The Agent shall notify the Lenders of
such request, and the amount thereof, which notice shall specify the date by
which Lenders must respond if they are willing to issue a commitment to
participate in the Commitment Increase (the "Response Date"). Each Lender which,
in its sole discretion, desires to commit to participate in the Commitment
Increase (each, an "Increasing Lender") shall notify the Agent on or before the
Response Date of the amount by which it commits to increase its Revolving Loan
Commitment. If Increasing Lenders commit to participate in the Commitment
Increase in an aggregate amount in excess of the amount permitted under this
Subsection 12.17.1, the Commitment Increase shall be allocated among the
Increasing Lenders as determined by the Agent. If the aggregate amount committed
by the Increasing Lenders is less than the amount requested by the Borrower and
permitted hereunder, the Agent agrees to use its best efforts to find additional
financial institutions (the "New Lenders") that are willing to undertake
Revolving Loan Commitments; provided that the Revolving Loan Commitment of each
New Lender shall be in a minimum amount of $5,000,000. The Agent shall have no
liability to Borrower or any of its Subsidiaries or the Lenders if the Agent is
unable to successfully syndicate the Commitment Increase with Increasing Lenders
and/or New Lenders. If the Agent is able to successfully syndicate the
Commitment Increase, on the Commitment Increase Effective Date (as defined
below), Borrower shall pay to the Agent for the account of all Increasing
Lenders and New Lenders such fees as shall have been agreed among Borrower, the
Agent and the Increasing Lenders or New Lenders, as the case may be, with
respect to such Commitment Increase. The Commitment Increase shall become
effective on the date specified by the Agent (the "Commitment Increase Effective
Date"); provided, however, that (i) the conditions set forth
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above shall have been satisfied on such date, (ii) the New Lenders shall have
entered into one or more joinder agreements, in form and substance satisfactory
to the Agent, to become Lenders hereunder, (iii) Borrower shall have paid all
fees (including but not limited to those fees provided in any fee letters
related to the Commitment Increase) and expenses in connection with the
syndication and arrangement of the Commitment Increase, (iv) Borrower shall have
executed and delivered to the Agent for the benefit of the New Lenders and
Increasing Lenders Revolving Notes, (v) Borrower shall have delivered or caused
to be delivered to the Agent such legal opinions, certificates (including
evidence that the Indebtedness under the Commitment Increase is permitted to be
incurred under the Senior Note Indenture) and other documents as the Agent may
reasonably request, all in form and substance satisfactory to the Agent, and
(vi) the relevant parties shall have delivered such other documents and taken
such other action as may be necessary or appropriate to effect the Commitment
Increase.
12.17.2 Commitment Increase Effective Date. On the Commitment
Increase Effective Date (i) the Revolving Loan Commitment of each Increasing
Lender shall be increased and each New Lender shall become a Lender hereunder
and under the other Loan Documents; (ii) Borrower shall pay the principal amount
of, and accrued and unpaid interest on, Revolving Credit Loans of the Lenders
other than the New Lenders in an amount sufficient (as determined by the Agent)
to permit the New Lenders and Increasing Lenders to fund Revolving Credit Loans
in an amount equal to their respective pro rata shares of the then outstanding
Revolving Credit Loans, and in connection with such payment shall also pay
breakage losses required by Subsection 3.2.5 on such repayment, if any; and
(iii) each New Lender and Increasing Lender shall fund Revolving Credit Loans in
an amount equal to its pro rata share of the then outstanding Revolving Credit
Loans.
12.18 Existing Loan Agreement And Loan Documents.The parties hereto
agree that on the Restatement Date, and the Agent's determination that the
conditions precedent set forth in Section 9 have been satisfied or waived, the
Existing Loan Agreement shall be deemed to be amended and restated in its
entirety and all Obligations under and as defined in the Existing Loan Agreement
(the "Prior Obligations") and the promissory notes delivered thereunder shall,
to the extent not paid on such date, be deemed to be Obligations outstanding
under this Agreement. Upon the Restatement Date, and the effectiveness of this
Agreement in accordance with Section 9 hereof, the Existing Loan Agreement will
be superseded in its entirety, and all references in the Loan Documents shall be
deemed to refer to this Agreement, without the need for further amendment of any
Loan Document. Notwithstanding the foregoing, all Liens and security interests
securing the Prior Obligations shall continue in full force and effect in all
respects, securing the Obligations. The parties hereto acknowledge that this
Agreement, the Revolving Notes and the other Loan Documents do not constitute a
repayment and reborrowing, an accord and satisfaction or a novation of such
Prior Obligations. Borrower hereby ratifies and reaffirms all of its Obligations
and liabilities under each of the Loan Documents, including without limitation
the Security Documents and that the Liens granted to the Agent thereunder
continue to secure the Obligations arising under this Agreement.
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IN WITNESS WHEREOF, this Amended and Restated Loan and
Security Agreement has been duly executed on the day and year specified at the
beginning of this Amended and Restated Loan and Security Agreement.
MOBILE MINI, INC., a Delaware corporation
By:______________________________________
Name: Xxxxxxxx Xxxxxxxxxxxx
Title: Executive Vice President
FLEET CAPITAL CORPORATION,
a Rhode Island corporation,
as Agent and as a Lender
By:______________________________________
Name: Xxxxxxx X. Xxx Xxxxxxxxxx
Title: Senior Vice President
S-1-
XX XXXXXX XXXXX BANK, as a Co-
Syndication Agent and as a Lender
By:______________________________________
Name: Xxxxx XxXxxxx
Title: Vice President
S-2-
BANK ONE, NA, with its main office in
Chicago, Illinois, as a Co-Syndication
Agent and as a Lender
By:______________________________________
Name: Xxxxx Xxxxxxxx
Title: First Vice President
S-3-
WASHINGTON MUTUAL BANK, as a Co-
Documentation Agent and as a Lender
By:______________________________________
Name: Xxxxx X. Xxxx
Title: Vice President
S-4-
GE COMMERCIAL DISTRIBUTION FINANCE
f/k/a Deutsche Financial Services Corp.,
as a Lender
By:______________________________________
Name: Xxxxxx Xxxxxxxx
Title: Vice President
S-5-
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:______________________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
S-6-
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By:______________________________________
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President
S-7-
THE PROVIDENT BANK, as a Lender
By: ___________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
S-8-
BANK LEUMI USA, as a Lender
By: ___________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
S-9-
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as a Lender
By: ___________________________
Name: Xxxx X. Xxxx
Title: Director
S-10-
DEUTSCHE BANK SECURITIES INC.,
as a Co-Documentation Agent
By: ___________________________
Name: _________________________
Title: ________________________
S-11-
CIBC, INC, as a Lender
By: ___________________________
Name: Xxxxxx Xxxxxx
Title: Managing Director
X-00-
XXXXXXXX XXXX XXXX, as a Lender
By: ___________________________
Name: Xxxxx Lawyer
Title: Assistant Vice President
X-00-
XXXXXXX XXXXXXXX CREDIT, LLC, as a
Lender
By: ___________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
S-14-
APPENDIX A
GENERAL DEFINITIONS
When used in the Amended and Restated Loan and Security
Agreement dated as of June 26, 2003, by and among FLEET CAPITAL CORPORATION,
individually and as Agent, the other financial institutions which are or become
parties thereto and MOBILE MINI, INC., a Delaware corporation, (a) the terms
Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Account,
Document, Electronic Chattel Paper, Financial Asset, Fixture, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Right, Payment Intangibles, Proceeds, Security, Security
Entitlement, Software, Supporting Obligations and Tangible Chattel Paper and
Uncertificated Security have the respective meanings assigned thereto under the
UCC (as defined below); (b) all terms indicating Collateral having the meanings
assigned thereto under the UCC shall be deemed to mean such Property, whether
now owned or hereafter created or acquired by Borrower or any Guarantor or in
which Borrower or any Guarantor now has or hereafter acquires any interest; (c)
capitalized terms which are not otherwise defined have the respective meanings
assigned thereto in said Amended and Restated Loan and Security Agreement; and
(d) the following terms shall have the following meanings (terms defined in the
singular to have the same meaning when used in the plural and vice versa):
"Account Debtor" - any Person who is or may become obligated
on or under or on account of any Account, Contract Right, Chattel Paper or
General Intangible.
"Account" - the meaning assigned under the UCC and all rights
to payments under leases and Chattel Paper.
"Acquisition" - (i) the acquisition by Borrower or any of its
Subsidiaries of all of the issued and outstanding Securities or other equity
interests of a Person, (ii) the acquisition by Borrower or any of its
Subsidiaries of all or substantially all of the assets of a Person or a line of
business of a Person or (iii) the merger or consolidation of Borrower or any of
its Subsidiaries with a Person other than a Person that was a Subsidiary of
Borrower or such Subsidiary immediately prior to such merger.
"Adjusted Debt Ratio" - as of any date of determination, the
ratio of (i) Funded Debt as of such date to (ii) Consolidated EBITDA plus, to
the extent deducted in calculating such Consolidated EBITDA, all payments of
judgment settlement costs (including interest accrued thereon, but not including
expenses relating thereto or to the litigation with Nuko) of the Nuko Judgment,
in each case for the four fiscal quarters ending on such date.
"Affiliate" - a Person (other than a Subsidiary): (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, a Person; (ii) which
beneficially owns or holds 15% or more of any class of the Voting Stock of a
Person; or (iii) 15% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 15% or more of the equity interest) of which is
beneficially owned or held by a Person or a Subsidiary of a Person.
A-1
"Agent" - Fleet in its capacity as agent for the Lenders under
the Agreement and its successors and assigns, including any successor in that
capacity appointed pursuant to Subsection 11.11.
"Aggregate Percentage" - with respect to each Lender, the
percentage equal to the quotient of (i) such Lender's Revolving Loan Commitment
divided by (ii) the aggregate of all Revolving Loan Commitments.
"Agreement" - the Amended and Restated Loan and Security
Agreement referred to in the first sentence of this Appendix A, all Exhibits and
Schedules thereto and this Appendix A, as each of the same may be amended or
otherwise modified from time to time.
"Applicable Margin" - initially, the percentages set forth
below with respect to the Base Rate Portion and the LIBOR Portion:
Base Rate Portion 0.50%
LIBOR Portion 2.25%
The percentages set forth above will be adjusted on the first
day of the month following receipt by Agent from Borrower of the financial
statements required to be delivered pursuant to Subsection 8.1.3(iii) of the
Agreement for each fiscal quarter ended on the last day of March, June,
September and December during the Term (each such date an "Adjustment Date"),
effective prospectively, by reference to the Adjusted Debt Ratio for the four
quarters most recently ending in accordance with the following:
Adjusted Debt Ratio Base Rate Portion LIBOR Portion
------------------- ----------------- -------------
> or = 5.25:1 1.00% 2.75%
> or = 4.75:1 but <5.25:1 .75% 2.50%
> or = 4.0:1 but <4.75:1 .50% 2.25%
> or = 3.25:1 but <4.0:1 .25% 2.00%
<3.25:1 0% 1.75%
provided that, (i) until the Adjustment Date following the fiscal quarter ended
December 31, 2003, the Applicable Margin shall not be less than 0.50% for the
Base Rate Portion and 2.25% for the LIBOR Portion of the Loans, (ii) if
Borrower's audited financial statements for any fiscal year delivered pursuant
to Subsection 8.1.3(i) of the Agreement reflect an Adjusted Debt Ratio that
yields a different Applicable Margin than that yielded by the quarterly
financial statements previously delivered pursuant to Subsection 8.1.3(iii) of
the Agreement for the last quarter of such fiscal year, the Applicable Margin
shall be readjusted retroactive to the preceding Adjustment Date and (iii) if
Borrower fails to deliver the financial statements required to be delivered
pursuant to Subsection 8.1.3(i) or Subsection 8.1.3(iii) of the
A-2
Agreement on or before the due date thereof, the interest rate shall
automatically adjust to the highest interest rate set forth above, effective
prospectively from such due date until the next Adjustment Date.
"Appraiser" - an appraiser employed by Agent or an independent
third party appraiser engaged by Agent, at Borrower's expense.
"Availability" - the amount of additional money which Borrower
is entitled to borrow from time to time as Revolving Credit Loans, such amount
being the difference derived when the sum of the principal amount of Revolving
Credit Loans then outstanding (including any amounts which Agent or any Lender
may have paid for the account of Borrower pursuant to any of the Loan Documents
and which have not been reimbursed by Borrower), the LC Amount, all unpaid LC
Obligations, the Availability Reserve and any other reserves is subtracted from
the Borrowing Base. If the amount outstanding is equal to or greater than the
Borrowing Base, Availability is zero (0).
"Availability Reserve" - a reserve against Availability equal
to $10,000,000; provided, however, that such amount shall be increased to
$17,500,000 until such time as a payment is made by Borrower under a final
judgment with respect to the pending litigation matter between Borrower and Nuko
or the matter is otherwise finally resolved; in which case such amount shall be
reduced by the amount of each payment on such judgment; provided further that,
in the sole and absolute discretion of Agent, such amount may be reduced by the
amount of a satisfactory appeal bond posted by Borrower in connection with the
matter and/or up to $2,000,000 of proceeds held in escrow by Borrower in
anticipation of a Nuko Judgment; provided further that the amount shall be
reduced automatically if the trial court in the litigation matter between
Borrower and Nuko either (i) vacates the judgment issued in the case on
September 13, 2002, by granting Borrower's motion to set aside the verdict or
Borrower's motion for new trial (in either case, the reduction shall be in the
amount of $7,500,000) or (ii) lowers the amount of the jury verdict in such
matter by ordering a remittitur (in which case the reduction shall be in the
amount of the remittitur ordered by the trial court).
"Bank" - Fleet National Bank.
"Base Rate" - the rate of interest announced or quoted by Bank
from time to time as its prime rate for commercial loans, whether or not such
rate is the lowest rate charged by Bank to its most preferred borrowers; and, if
such prime rate for commercial loans is discontinued by Bank as a standard, a
comparable reference rate designated by Bank as a substitute therefore shall be
the Base Rate.
"Base Rate Advance" - any Revolving Credit Loan bearing
interest computed by reference to the Base Rate.
"Base Rate Portion" - that portion of the Revolving Credit
Loans that is subject to interest computed by reference to the Base Rate.
A-3
"Borrower" - Mobile Mini, Inc., a Delaware corporation with
its chief executive office and principal place of business at 0000 Xxxxx Xxxxxx
Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000.
"Borrowing Base" - as at any date of determination thereof, an
amount equal to the lesser of:
(i) the Revolving Credit Maximum Amount; or
(ii) an amount equal to the sum of
(A) up to eighty-five percent (85%) of the net amount of
Eligible Accounts; plus
(B) up to ninety percent (90%) of Eligible Container Fleet
Inventory; plus
(C) up to seventy percent (70%) of Eligible Trailer Fleet
Inventory; plus
(D) the lesser of (i) $15,000,000 or (ii) the sum of
(a) up to ninety percent (90%) of Eligible
Container Inventory Held for Sale; plus
(b) up to the lesser of (x) $2,500,000 or (y)
ninety percent (90%) of Eligible
Work-in-Process Container Inventory; plus
(c) up to seventy-five percent (75%) of Eligible
Primary Raw Materials Inventory; plus
(d) up to sixty percent (60%) of Eligible Other
Raw Materials Component Inventory; plus
(E) the lesser of (i) $25,000,000 and (ii) the sum of (a) up
to eighty percent (80%) of the value of Eligible Machinery and Equipment; plus
(b) up to sixty percent (60%) of the value of the Specified Real Property.
For purposes of calculating the components of the Borrowing
Base, (1) the net amount of Eligible Accounts at any time shall be the face
amount of such Eligible Accounts less any and all returns, rebates, discounts
(which may, at Agent's option, be calculated on shortest terms), service
charges, customer deposits, credits, allowances or excise taxes of any nature at
any time issued, owing, claimed by Account Debtors, granted, outstanding or
payable in connection with such Accounts at such time, (2) the amount of
Eligible Inventory shall be determined on a first-in, first-out basis; (3)
Inventory "cost" shall be determined in a manner consistent with Borrower's
current and historical accounting practices unless otherwise specifically
provided in this Agreement, (4) the value of Eligible Machinery and Equipment
and Specified Real Property shall be determined on the basis of the orderly
liquidation value of such Property based on the most recent appraisal received
by Agent from the Appraiser; and (5) orderly liquidation value of Inventory
shall be based on the most recent appraisal received by Agent from the
Appraiser.
A-4
"Borrowing Base Certificate" - a certificate by a senior
financial officer of Borrower, substantially in the form of Exhibit 8.1.4 (or
another form acceptable to Agent) setting forth the calculation of the Borrowing
Base, including a calculation of each component thereof, all in such detail as
shall be satisfactory to Agent. All calculations of the Borrowing Base in
connection with the preparation of any Borrowing Base Certificate shall
originally be made by Borrower and certified to Agent; provided, that Agent
shall have the right to review and adjust, in the exercise of its reasonable
credit judgment, any such calculation after giving notice thereof to Borrower,
(1) to reflect its reasonable estimate of declines in value of any of the
Collateral described therein, and (2) to the extent that such calculation is not
in accordance with this Agreement.
"Business Day" - (i) when used with respect to the LIBOR
option, shall mean a day on which dealings may be effected in deposits of United
States Dollars in the London interbank foreign currency deposits market and on
which Bank is conducting and other banks may conduct business in London,
England, in the State of California and (ii) when used with respect to any other
provision of the Agreement, any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of California or is a day on
which banking institutions located in such state are closed.
"Capital Expenditures" - expenditures made or liabilities
incurred for the acquisition of any fixed assets (including but not limited to
containers) or improvements, replacements, substitutions or additions thereto
which have a useful life of more than one year, including the total principal
portion of Capitalized Lease Obligations and that portion of Investments
allocable to property, plant or equipment. Capital Expenditures shall exclude
(i) new and used manufactured or remanufactured portable container Inventory
held for sale, (ii) proceeds of a Casualty Loss applied to the repair or
replacement of the property affected by the Casualty Loss and (iii) Inventory or
Equipment acquired in a Permitted Acquisition.
"Capitalized Lease Obligation" - any Indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"Cash Equivalents" means either of the following, so long as
the same are maintained in accounts in which Agent has a perfected security
interest: (i) securities issued, guarantied or insured by the United States or
any of its agencies and having maturities of not more than one year; and (ii)
certificates of deposit having maturities of not more than one year issued by
Agent, any Lender or by a U.S. federal or state chartered commercial bank of
recognized standing whose capital and unimpaired surplus is in excess of
$100,000,000 and whose short-term commercial paper rating, or that of its parent
holding company, is at least A-2 or the equivalent by Standard & Poor's
Corporation and at least P-2 or the equivalent by Xxxxx'x Investors Services,
Inc.
"Casualty Loss" - (i) the loss, damage, or destruction of any
asset owned or used by Borrower or any of its Subsidiaries, (ii) the
condemnation, confiscation, or other taking, in whole or in part, of any such
asset, or (iii) the diminishment of such asset so as to render use for its
intended purpose impracticable or unreasonable.
A-5
"Certificate of Title - a certificate of title, certificate of
ownership or other registration certificate issued or required to be issued for
any asset under the certificate of title or similar laws of any jurisdiction.
"Change of Control" - either: (i) other than members of
management as of the Restatement Date, any "person" (as such term is used in
Subsections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as
amended) on or after the Restatement Date is or becomes a "beneficial owner" (as
defined in Rule 13d-3 under such Act), directly or indirectly, of Securities of
Borrower representing 15% or more of the combined voting power of Borrower's
then-outstanding Securities; or (ii) the existing directors for any reason cease
to constitute 75% of Borrower's Board of Directors or (iii) any Guarantor ceases
to be a wholly-owned Subsidiary of Borrower, except as expressly permitted by
the Loan Documents; or (iv) a "Change of Control" (as defined in the Senior Note
Indenture) occurs. For purposes of this definition, "existing directors" means
(x) individuals constituting Borrower's Board of Directors on the Restatement
Date, and (y) any subsequent director whose election by the Board of Directors
or nomination for election by Borrower's shareholders was approved by a vote of
at least 75% of the directors then in office which directors either were
directors on the Restatement Date or whose election or nomination for election
was previously so approved.
"Collateral" - all of the Property and interests in Property
described in Section 5 of the Agreement, and all other Property and interests in
Property that now or hereafter secure the payment and performance of any of the
Obligations or any Guaranty Agreement.
"Collateral Access Agreement" - any landlord waivers,
mortgagee waivers, bailee letters or any similar acknowledgment agreements of
any warehouseman or processor in possession of Inventory, in form and substance
approved by Agent.
"Commitment Increase" - as defined in Subsection 12.17.1 of
the Agreement.
"Commitment Increase Effective Date" - as defined in
Subsection 12.17.1 of the Agreement.
"Computer Hardware and Software" - all rights (including
rights as licensee and lessee) with respect to (i) computer and other electronic
data processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever); (iii)
any firmware associated with any of the foregoing; and (iv) any documentation
for hardware, Software and firmware described in clauses (i), (ii) and (iii)
above, including flow charts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes.
A-6
"Consolidated" - the consolidation in accordance with GAAP of
the accounts or other items as to which such term applies.
"Consolidated EBITDA" - for a period, the Consolidated net
income of Borrower and its Subsidiaries (excluding (a) extraordinary gains, (b)
non-cash extraordinary losses and (c) debt restructuring costs arising from
payment of termination costs of Derivative Obligations that were entered into in
connection with the Existing Loan Agreement and from the write-off of fees and
expenses in connection with the initial funding under the Existing Loan
Agreement) for the period and without duplication (i) plus all Interest Expense,
income tax expense, depreciation and amortization (including amortization of any
goodwill or other intangibles) for the period, (ii) less gains or plus losses
attributable to any fixed asset sales (excluding sales of containers held for
lease) in the period and (iii) plus or minus any other non-cash charges which
have been subtracted or added in calculating Consolidated net income. For all
purposes other than calculating Consolidated Net Cash Flow, Consolidated EBITDA
for any such period shall be calculated by giving pro forma effect to any
Permitted Acquisition during such period, as if such Acquisition had been
consummated on the first day of such period, as long as Borrower shall have
delivered to Agent audited financial statements for such period for the Person
or assets acquired.
"Consolidated Net Cash Flow" - for a period, Consolidated
EBITDA less the sum of (i) Unfinanced Capital Expenditures, during such period,
plus (ii) income taxes paid in cash during such period and plus (iii) Restricted
Payments paid in cash during such period (other than Restricted Payments paid by
a Subsidiary of Borrower to Borrower or a Guarantor).
"Container Fleet Inventory" - new and used manufactured or
remanufactured portable and ISO containers and portable mobile offices held by
Borrower or a Guarantor for intended lease or rental by Borrower and its
Subsidiaries to third parties.
"Contingent Obligation" - any direct, indirect, contingent or
non-contingent guaranty or obligation for the Indebtedness of another, except
endorsements in the ordinary course of business.
"Contract Right" - any right to payment under a contract for
the sale or lease of goods or the rendering of services, which right is at the
time not yet earned by performance.
"Debt Ratio" - as of any date of determination, the ratio of
(i) Funded Debt as of such date to (ii) Consolidated EBITDA plus, to the extent
included in calculating such Consolidated EBITDA, all accruals and payments of
costs and expenses, including settlement costs, in connection with the Nuko
Judgment and the litigation relating thereto, in each case for the four fiscal
quarters ending on such date.
"Default" - an event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, become an Event
of Default.
"Default Rate" - as defined in Subsection 2.1.2 of the
Agreement.
A-7
"Derivative Obligations" - every obligation of a Person under
any forward contract, futures contract, swap, option or other financing
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest rates,
currency or exchange rates or valuations.
"Dominion Account" - a special bank account or accounts of
Agent established by Borrower pursuant to Subsection 6.2.4 of the Agreement at a
bank selected by Borrower, but acceptable to Agent in its reasonable discretion,
and over which Agent shall have sole and exclusive access and control for
withdrawal purposes.
"Eligible Account" - an Account of Borrower or a Guarantor
arising in the ordinary course of the business of Borrower or such Guarantor
from the sale of goods, the lease of goods or rendition of services which Agent,
in its reasonable credit judgment, deems to be an Eligible Account less all
returns, rebates, discounts (which may at Agent's option be calculated on
shortest terms), service charges, customer deposits, credits, allowances or
excise taxes of any nature at any time issued, owing, claimed by Account
Debtors, granted, outstanding or payable in connection with such Accounts.
Without limiting the generality of the foregoing, unless otherwise approved in
writing by Agent, no Account shall be an Eligible Account if:
(i) it arises out of a sale made or services rendered by
Borrower or a Guarantor to a Subsidiary of Borrower or an Affiliate of Borrower
or to a Person controlled by an Affiliate of Borrower; or
(ii) it is an Account that has payment terms longer than 45
days from the date of invoice; provided, however, that $200,000 may be
considered Eligible Accounts with payment terms longer than 45 days but no
longer than 90 days from the date of the invoice;
(iii) it remains unpaid more than 90 days after the original
invoice date; or
(iv) it is owed by an Account Debtor and the total unpaid
Accounts of such Account Debtor exceed 10% of the net amount of all Eligible
Accounts, but only to the extent of such excess; or
(v) any covenant, representation or warranty contained in the
Agreement with respect to such Account has been breached; or
(vi) the Account Debtor is also a creditor or supplier of
Borrower or any Subsidiary of Borrower, or the Account Debtor has disputed
liability with respect to such Account, or the Account Debtor has made any claim
with respect to any other Account due from such Account Debtor to Borrower or
any Subsidiary of Borrower, or the Account otherwise is or may become subject to
right of setoff by the Account Debtor, provided, that any such Account shall be
eligible to the extent such amount thereof exceeds such contract, dispute,
claim, setoff or similar right; or
(vii) the Account Debtor has commenced a voluntary case under
the federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or a decree or order for relief has
been entered by a court having
A-8
jurisdiction in the premises in respect of the Account Debtor in an involuntary
case under the federal or other similar bankruptcy, reorganization or insolvency
laws, as now constituted or hereafter amended, or any other petition or other
application for relief under the federal or other similar bankruptcy
reorganization or insolvency laws, as now constituted or hereafter amended, has
been filed against the Account Debtor, or if the Account Debtor has failed,
suspended business, ceased to be Solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or for all or
a significant portion of its assets or affairs; or
(viii) it arises from a sale made or services rendered to an
Account Debtor outside the United States, unless the sale is either (1) to an
Account Debtor located in Ontario or any other province of Canada in which the
Personal Property Security Act has been adopted in substantially the same form
as currently in effect in Ontario or (2) on letter of credit, guaranty or
acceptance terms, in each case acceptable to Agent in its reasonable credit
judgment; or
(ix) (1) it arises from a sale to the Account Debtor on a
xxxx-and-hold or consignment basis; or (2) it is subject to a reserve
established by Borrower or any of its Subsidiaries for potential returns or
refunds, to the extent of such reserve; or
(x) the Account Debtor is the United States of America, any
State or any political subdivision or department, agency or instrumentality
thereof, unless Borrower or any such Guarantor, as applicable, assigns its right
to payment of such Account to Agent, in a manner satisfactory to Agent, in its
reasonable credit judgment, so as to comply with the Assignment of Claims Act of
1940 (31 U.S.C. Section 203 et seq., as amended) or complies with any similar
applicable state or local law as Agent may require; or
(xi) it is not at all times subject to Agent's duly perfected,
first priority security interest and to no other Lien that is not a Permitted
Lien; or
(xii) the goods giving rise to such Account have not been
delivered to and accepted by the Account Debtor or the services giving rise to
such Account have not been performed by Borrower or the applicable Guarantor and
accepted by the Account Debtor or the Account otherwise does not represent a
final sale; or
(xiii) the Account is evidenced by an instrument of any kind,
or has been reduced to judgment; or
(xiv) Borrower or a Subsidiary of Borrower has made any
agreement with the Account Debtor for any deduction therefrom, except for
discounts or allowances which are made in the ordinary course of business for
prompt payment and which discounts or allowances are reflected in the
calculation of the face value of each invoice related to such Account; or
(xv) more than 50% of the Accounts owing from the Account
Debtor are not Eligible Accounts hereunder; provided that Agent may, in its sole
discretion, reduce such percentage to a lesser percentage, but not below 25%; or
A-9
(xvi) the Account is subject to any progress payment or other
similar advance made by or for the benefit of the applicable Account Debtor; or
(xvii) the Account evidences a lease to an Account Debtor that
is an individual and the aggregate amount of such Accounts included as Eligible
Accounts hereunder equals or exceeds $750,000; or
(xvii) the Account evidences a sale to an Account Debtor that
is an individual.
"Eligible Container Fleet Inventory" - Eligible Goods
Inventory of Borrower and the Guarantors consisting of Container Fleet
Inventory, valued at the lower of Borrower's and its Subsidiaries' cost or
orderly liquidation value, except for custom containers that are pre-sold and
ISO containers that are pre-sold, which will be valued at the lower of
Borrower's cost or sales invoice price.
"Eligible Container Inventory Held For Sale" - Eligible Goods
Inventory of Borrower and the Guarantors consisting of (a) new and used
manufactured or remanufactured portable and ISO containers and portable mobile
offices held by Borrower or a Guarantor for intended sale to third parties and
(b) containers used by Borrower or the Guarantors, containers temporarily out of
service and otherwise unrefurbished ISO units, whether or not held for sale,
each of which containers in clauses (a) and (b) shall be valued at the lower of
cost or orderly liquidation value; provided, that if any such containers have
not been appraised, containers manufactured by Borrower shall be valued at cost
and all other containers shall be valued at the lower of cost or the orderly
liquidation value equivalent percentage established by the most recent appraisal
for that particular type or category of Inventory, and (c) custom containers and
ISO containers that have been pre-sold, which shall be valued at the lower of
cost or the sales invoice price.
"Eligible Goods Inventory" - Inventory of Borrower and the
Guarantors which Agent, in its reasonable credit judgment, deems to be Eligible
Goods Inventory. In determining the amount to be so included, Eligible Goods
Inventory shall be valued at the lower of cost or orderly liquidation value,
except for custom containers that are pre-sold and ISO containers that are
pre-sold, which will be valued at the lower of Borrower's cost or sales invoice
price. Unless otherwise approved in writing by Agent, no Inventory shall be
deemed Eligible Goods Inventory if:
(a) it is not owned solely by Borrower or a Guarantor or
Borrower or a Guarantor does not have good, valid and marketable title thereto;
or
(b) it is not located in the United States or in Ontario,
Canada; or
(c) it (i) is not subject to valid, current rental or
lease agreements between Borrower or a Guarantor and the renters or lessees
thereof or (ii) if not leased, is not located on property owned or leased by
Borrower or a Guarantor or is not located in a contract warehouse, subject to a
Collateral Access Agreement executed by the mortgagee, the lessor or the
contract warehouseman, as the case may be, and segregated or otherwise
separately
A-10
identifiable from goods of others, if any, stored on the premises; provided,
however, that as long as Borrower has received Collateral Access Agreements to
the extent necessary to comply with Subsection 8.1.6 of the Agreement, Inventory
will not be deemed ineligible solely because it is located on property not
subject to a Collateral Access Agreement, but Agent shall reserve one month's
rent under the applicable lease for the premises against the Borrowing Base; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of Agent except, with respect to Inventory stored at
sites described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges; or
(e) it consists of goods returned or rejected by Borrower
or a Subsidiary's or Affiliate's customers or goods in transit to third parties
(other than to warehouse sites covered by a Collateral Access Agreement); or
(f) it is not first-quality finished goods or work in
process, is obsolete, or does not otherwise conform to the representations and
warranties contained in the Loan Documents; or
(g) it is subject to a lease which should be classified
as a capital lease under GAAP or contains a contains a purchase option for an
amount less than the amount equal to the net book value; or
(h) Inventory which is located on Borrower's premises and
is being repaired; or
(i) Inventory which can not be located at the time of
Borrower's physical inventory; or
(j) it is Eligible Raw Materials Inventory or Eligible
Machinery and Equipment.
"Eligible Inventory" - Eligible Goods Inventory and Eligible
Raw Materials Inventory.
"Eligible Machinery and Equipment" - Equipment of Borrower or
a Guarantor which Agent, in its reasonable credit judgment, deems to be Eligible
Machinery and Equipment. Without limiting the generality of the foregoing,
unless otherwise approved in writing by Agent, no Equipment shall be deemed
Eligible Machinery and Equipment if:
(a) it is not owned solely by Borrower or a Guarantor or
Borrower or a Guarantor does not have good, valid and marketable title thereto;
or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by
Borrower or a Guarantor subject to a Collateral Access Agreement executed by the
lessor; provided, however, that as long as Borrower has received Collateral
Access Agreements to the extent
A-11
necessary to comply with Subsection 8.1.6 of the Agreement, Equipment will not
be deemed ineligible solely because it is located on property not subject to a
Collateral Access Agreement, but Agent shall reserve one month's rent under the
applicable lease of the premises against the Borrowing Base; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of Agent except, with respect to Equipment stored at
sites described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges; or
(e) it is not of a like kind or type of Equipment that
has been appraised and it has not been appraised by the Appraiser with an
appraisal in form and substance satisfactory to Agent and reasonably
satisfactory to Majority Lenders.
"Eligible Other Raw Materials Component Inventory" - Eligible
Raw Materials Inventory, valued at Borrowers' cost, of Borrower or a Guarantor
purchased from third parties consisting of plumbing, drywall, electrical
components, insulation materials, HVAC materials, doors and windows, and
fasteners, and located on the Restatement Date or thereafter at Borrower's
Maricopa facility or such other facility of Borrower or a Guarantor as to which
Borrower implements a perpetual inventory accounting system comparable to that
of the Maricopa facility.
"Eligible Primary Raw Materials Inventory" - Eligible Raw
Materials Inventory, valued at Borrowers' cost (except for fiscal year end
calculations where the value will be the lower of Borrower's cost or market), of
Borrower or a Guarantor consisting of steel, lumber, plywood and paint, and
located on the Restatement Date or thereafter at Borrower's Maricopa facility or
such other facility of Borrower as to which Borrower implements a perpetual
inventory accounting system comparable to that of the Maricopa facility.
"Eligible Raw Materials Inventory" - Eligible Primary Raw
Materials Inventory or Eligible Other Raw Materials Inventory which Agent, in
its reasonable credit judgment, deems to be Eligible Raw Materials Inventory.
Without limiting the generality of the foregoing, unless otherwise approved in
writing by Agent, no Inventory shall be deemed Eligible Raw Materials Inventory
if:
(a) it is not owned solely by Borrower or a Guarantor or
Borrower or a Guarantor does not have good, valid and marketable title thereto;
or
(b) it is not located in the United States or Ontario,
Canada; or
(c) it is not located on property owned or leased by
Borrower or a Guarantor or in a contract warehouse, subject to a Collateral
Access Agreement executed by the lessor or the contract warehouseman, as the
case may be, and segregated or otherwise separately identifiable from goods of
others, if any, stored on the premises; provided, however, that as long as
Borrower has received Collateral Access Agreements to the extent necessary to
comply with Subsection 8.1.6 of the Agreement, Inventory will not be deemed
ineligible solely because it is located on property not subject to a Collateral
Access
A-12
Agreement, but Agent shall reserve equal to one month's rent under the
applicable lease of the premises against the Borrowing Base.; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of Agent except, with respect to Inventory stored at
sites described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges; or
(e) it is goods returned or rejected by Borrower or a
Guarantor's customers or goods in transit to third parties (other than to
warehouse sites covered by a Collateral Access Agreement); or
(f) it is not first-quality raw materials, is obsolete or
slow moving, or does not otherwise conform to the representations and warranties
contained in the Credit Documents; or
(g) it is Eligible Goods Inventory or Eligible Machinery
and Equipment; or
(h) it is Inventory being repaired at Borrower's
facility.
"Eligible Trailer Fleet Inventory" - Eligible Goods Inventory
consisting of Trailer Fleet Inventory, valued at the lower of cost or orderly
liquidation value, excluding any Inventory that is not manufactured in
accordance with and does not meet all standards imposed by all requirements of
law or by any governmental authority having regulatory authority over such goods
or their manufacture, use, sale, or lease.
"Eligible Work-In-Process Container Inventory" - Eligible
Goods Inventory, valued at cost, consisting of : (a) new and used manufactured
or remanufactured portable containers, which is in the work-in-process phase of
manufacturing; (b) shaped steel component parts; or (c) sub-assemblies and which
are located on the Restatement Date or thereafter at Borrower's Maricopa
facility or at such other facility of Borrower or a Guarantor as to which
Borrower and the Guarantors implement after the Restatement Date a perpetual
inventory accounting system comparable to that of the Maricopa facility.
"Environmental Laws" - all federal, state and local laws,
rules, regulations, ordinances, orders and consent decrees relating to pollution
or the protection of the environment.
"Equipment" - all machinery, apparatus, equipment, fittings,
furniture, fixtures, motor vehicles and other tangible personal Property (other
than Inventory) of every kind and description used in the operations of Borrower
or any of its Subsidiaries or Affiliates or owned by Borrower or any of its
Subsidiaries or Affiliates or in which Borrower or any of its Subsidiaries or
Affiliates has an interest, whether now owned or hereafter acquired by Borrower
or any of its Subsidiaries or Affiliates and wherever located, and all parts,
accessories and special tools and all increases and accessions thereto and
substitutions and replacements therefore.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as amended, and all rules and regulations from time to time promulgated
thereunder.
A-13
"Event of Default" - as defined in Section 10.1 of the
Agreement.
"Existing Loan Agreement" - as defined in the recitals to the
Agreement.
"Existing Revolving Credit Loans" - the Loans under and as
defined in the Existing Loan Agreement.
"Facility Utilization" - the outstanding principal balance of
the Revolving Credit Loans and Swing Line Loans plus the L/C Amount.
"Fee Letter" - as defined in Section 2.3 of the Agreement.
"Fixed Charge Coverage Ratio" - as of any date of
determination, the ratio of (i) Consolidated Net Cash Flow for the four fiscal
quarters ending on such date to (ii) the sum of Interest Expense for the four
fiscal quarters ending on such date plus the current portion of Funded Debt as
of such date; provided, however, that such calculation shall not include any
accruals or cash payments made in connection with the Nuko Judgment or the
litigation relating thereto.
"Fleet" - Fleet Capital Corporation, a Rhode Island
corporation with an office at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx,
Xxxxxxxxxx 00000, and its successors and assigns.
"Funded Debt" -means, without duplication, (i) Indebtedness
arising from the lending of money by any Person to Borrower or any of its
Subsidiaries; (ii) Indebtedness, whether or not in any such case arising from
the lending by any Person of money to Borrower or any of its Subsidiaries, (1)
which is represented by notes payable or drafts accepted that evidence
extensions of credit, (2) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (3) upon which interest charges are
customarily paid (other than accounts payable) or that was issued or assumed as
full or partial payment for Property; (iii) Indebtedness that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with respect to
letters of credit or guaranties of letters of credit; and (v) Indebtedness of
Borrower or any of its Subsidiaries under any guaranty of obligations that would
constitute Funded Debt under clauses (i) through (iii) hereof, if owed directly
by Borrower or any of its Subsidiaries. Funded Debt shall not include trade
payables or accrued expenses or Indebtedness (other than Indebtedness under the
Agreement) of up to $1,500,000 incurred to finance insurance premiums.
"Guarantors" - each Subsidiary of Borrower and each other
Person who now or hereafter guarantees payment or performance of the whole or
any part of the Obligations.
"Guaranty Agreements" - the Guaranty executed on the Original
Closing Date by each Subsidiary of Borrower and reaffirmed on the Restatement
Date, in form and substance satisfactory to Agent, together with each other
guaranty hereafter executed by any Guarantor.
"Increasing Lender" - as defined in Subsection 12.17.1 of the
Agreement.
A-14
"Indebtedness" - (a) indebtedness for borrowed money or for
the deferred purchase price of property or services (other than trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), whether on open account or evidenced by a
note, bond, debenture or similar instrument, (b) Capitalized Lease Obligations,
(c) reimbursement obligations for letters of credit, banker's acceptances or
other credit accommodations, (d) Derivative Obligations, as determined by Agent,
(e) Contingent Obligations and (f) obligations secured by any Lien on that
Person's property, even if that Person has not assumed such obligations.
"Intellectual Property" - all past, present and future: trade
secrets, know-how and other proprietary information; trademarks, internet domain
names, service marks, trade dress, trade names, business names, designs, logos,
slogans (and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights, unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to xxx for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.
"Interest Expense" - the consolidated expense of Borrower and
its Subsidiaries for interest on Indebtedness, including, without limitation,
amortization of original issue discount, incurrence fees (to the extent included
in interest expense), the interest portion of any deferred payment obligation
and the interest component of any capital lease obligation.
"Interest Period" - as applicable to any LIBOR Advance, a
period commencing on the date a LIBOR Advance is made, and ending on the date
which is one (1) month, two (2) months, three (3) months, or six (6) months
later, as may then be requested by Borrower; provided that (i) any Interest
Period which would otherwise end on a day which is not a Business Day shall end
in the next preceding or succeeding Business Day as is Agent's custom in the
market to which such LIBOR Advance relates; and (ii) there remains a minimum of
one (1) month, two (2) months, three (3) months or six (6) months (depending
upon which Interest Period Borrower selects) in the Term, provided, however that
Borrower may request a LIBOR Advance of $25,000,000 with an Interest Period
commencing June 27, 2003 and ending on August 12, 2003.
"Investment" - all expenditures made and all liabilities
incurred (including Contingent Obligations) for or in connection with the
acquisition of Securities or Indebtedness of a Person, loans, advances, capital
contributions or transfers of property to a Person, or acquisition of
substantially all the assets of a Person. In determining the aggregate
A-15
amount of Investments outstanding at any particular time, (i) a guaranty shall
be valued at not less than the principal amount guaranteed and outstanding; (ii)
returns of capital (but only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution) shall be deducted; (iii)
earnings, whether as dividends, interest or otherwise, shall not be deducted;
and (iv) decreases in the market value shall not be deducted.
"IP Security Agreement" - a security agreement executed by
Borrower or any Guarantor granting to Agent, for the benefit of the Lenders, a
Lien on Intellectual Property.
"LC Amount" - at any time, the aggregate undrawn face amount
of all Letters of Credit and LC Guaranties then outstanding.
"LC Guaranty" - any guaranty pursuant to which Agent or any
Affiliate of Agent shall guaranty the payment or performance by Borrower of its
reimbursement obligation under any letter of credit.
"LC Obligations" - any Obligations that arise from any draw
against any Letter of Credit or against any letter of credit supported by an LC
Guaranty.
"Legal Requirement" - any requirement imposed upon Agent or
any Lender by any law of the United States of America or the United Kingdom or
by any regulation, order, interpretation, ruling or official directive (whether
or not having the force of law) of the Federal Reserve Board, the Bank of
England or any other board, central bank or governmental or administrative
agency, institution or authority of the United States of America, the United
Kingdom or any political subdivision of either thereof.
"Lenders" - Fleet in its capacity as lender and any other
financial institution which is or becomes a party to this Agreement as a lender.
"Letter of Credit" - any standby or documentary letter of
credit issued by Agent or any Affiliate of Agent for the account of Borrower.
"LIBOR" - with respect to any LIBOR Advance, an interest rate
per annum (rounded upwards, if necessary, to the next higher 1/16 of 1%) equal
to the product of (i) the Base LIBOR Rate (as hereinafter defined) divided by
(ii) an amount equal to 1 minus the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed against banks which are members of the Federal Reserve System for
"Eurocurrency Liabilities" as defined in Regulation D. For purposes of this
definition, the term "Base LIBOR Rate" shall mean the rate, rounded upwards, if
necessary, to the next higher 1/16 of 1%) at which deposits of U.S. dollars
approximately equal in principal amount to the applicable LIBOR Advance are
offered to Agent or Agent's Affiliate by prime banks in the London interbank
foreign currency deposits market at approximately 11:00 a.m., London time, two
business days prior to the such LIBOR Advance, for delivery on the day of such
LIBOR Advance. Each determination by Agent of any LIBOR rate shall, in the
absence of manifest error, be conclusive.
"LIBOR Advance" - any Loan bearing interest computed by
reference to the LIBOR.
A-16
"LIBOR Interest Payment Date" - the last day of each Interest
Period and, in the case of any Interest Period of six (6) months, the 90th day
of such Interest Period.
"LIBOR Portion" - that portion of the Revolving Credit Loans
that is subject to interest computed by reference to the LIBOR.
"Lien" - any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on common law, statute or contract. The term "Lien" shall also
include rights of seller under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of the Agreement, Borrower or
Guarantor, as applicable, shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.
"Loan Account" - the loan account established on the books of
Agent pursuant to Section 3.6 of the Agreement.
"Loan Documents" - the Agreement, the Other Agreements and the
Security Documents.
"Loans" - all loans and advances of any kind made by Agent or
any Lender (or by any affiliate of Fleet) pursuant to the Agreement.
"London Banking Day" - any date on which commercial banks are
open for business in London, England.
"Majority Lenders" - as of any date, Lenders holding 51% of
the Revolving Loan Commitments determined on a combined basis and following the
termination of the Revolving Loan Commitments, Lenders holding 51% or more of
the outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by
Borrower or funded with a Revolving Credit Loan; provided, that (i) in each
case, if there are 2 or more Lenders with outstanding Loans, LC Amounts,
unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least
2 Lenders shall be required to constitute Majority Lenders; and (ii) prior to
termination of the Revolving Loan Commitments, if any Lender breaches its
obligation to fund any requested Revolving Credit Loan, for so long as such
breach exists, its voting rights hereunder shall be calculated with reference to
its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations,
rather than its Revolving Loan Commitment.
"Mandatory Redeemable Obligation" - an obligation of Borrower
or any of its Subsidiaries (or guaranteed by any of them) which must be redeemed
or repaid (a) at a fixed or determinable date, whether by operation of sinking
fund or otherwise, (b) at the option of any Person other than Borrower or such
Subsidiary, or (c) upon the occurrence of a condition not solely within the
control of Borrower or such Subsidiary, such as a redemption required to be made
out of future earnings.
A-17
"Master Assignment Agreement" - that certain Master Assignment
and Assumption Agreement dated as of the Restatement Date among certain of the
Prior Lenders, certain of the Lenders, the Agent and Borrower.
"Material Adverse Effect" - means (i) a material adverse
effect on the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrower and Guarantors,
taken as a whole, (ii) the impairment of the ability of Borrower or any
Guarantor to perform its obligations under the Loan Documents to which it is a
party or of Agent or the Lenders to enforce the Obligations or realize upon the
Collateral, or (iii) a material adverse effect on the value of a material
portion of the Collateral or the amount which Agent or the Lenders would receive
(after giving consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral.
"Mortgages" - All mortgages, deeds of trust and comparable
documents now or at any time hereafter securing the whole or any part of the
Obligations.
"Multiemployer Plan" - has the meaning set forth in Section
4001(a)(3) of ERISA.
"New Lenders" - as defined in Subsection 12.17.1 of the
Agreement.
"Nuko" -Nuko Holdings I, LLC, a Delaware limited liability
company.
"Nuko Judgment" - a court judgment in favor of Nuko equaling
the lesser of (i) the actual amount of any final judgment rendered in favor of
Nuko and (ii) $7,500,000, plus interest, costs and attorneys' fees.
"Obligations" - all Loans, all LC Obligations and all other
advances, debts, liabilities, obligations, covenants and duties, together with
all interest, fees and other charges thereon, owing, arising, due or payable
from Borrower to Agent, for its own benefit and the benefit of the Lenders, or
from Borrower to Bank, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under the
Agreement or any of the other Loan Documents or cash management services
rendered in connection therewith, whether direct or indirect (including those
acquired by assignment), absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising and however acquired, and any
Derivative Obligations owing to Agent, any Lender or any Affiliate of a Lender
or Bank.
"Organizational I.D. Number" - with respect to Borrower or any
Subsidiary of Borrower, the organizational identification number assigned to
Borrower or such Subsidiary by the applicable governmental unit or agency of the
jurisdiction of organization of Borrower or such Subsidiary.
"Original Closing Date" - February 11, 2002.
"Other Agreements" - any and all agreements, instruments and
documents (other than the Agreement and the Security Documents), heretofore, now
or hereafter
A-18
executed by Borrower, any Subsidiary of Borrower or any other third party and
delivered to Agent or any Lender in respect of the transactions contemplated by
the Agreement.
"Overadvance" - the amount, if any, by which the outstanding
principal amount of Revolving Credit Loans, plus the LC Amount, plus the amount
of LC Obligations that have not been reimbursed by Borrower or funded with a
Revolving Credit Loan, plus reserves, exceeds the Borrowing Base.
"Permitted Acquisition" - an Acquisition permitted under
Subsection 8.2.14 of the Agreement.
"Permitted Liens" - any Lien of a kind specified in Subsection
8.2.3 of the Agreement.
"Person" - an individual, partnership, corporation, limited
liability company, joint stock company, land trust, business trust, or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Plan" - an employee benefit plan now or hereafter maintained
for employees of Borrower or any of its Subsidiaries that is covered by Title IV
of ERISA.
"Pledge Agreement - the pledge agreement executed by Borrower
and its Subsidiaries pledging to Agent, for the benefit of the Lenders, all
Securities owned by them.
"Prior Lenders" - as defined in the recitals to the Agreement.
"Projections" - Borrower's forecasted Consolidated (i) balance
sheets, (ii) profit and loss statements, (iii) cash flow statements, and (iv)
stockholders' equity statements, all prepared on a consistent basis with the
historical financial statements of Borrower and its Subsidiaries, together with
appropriate supporting details and a statement of underlying assumptions.
"Property" - any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Purchase Money Liens and Leases" - a Lien upon fixed assets
which secures Indebtedness permitted under Subsection 8.2.2, but only if such
Lien shall at all times be confined solely to the fixed assets the purchase
price of which was financed through the incurrence of the purchase money
Indebtedness secured by such Lien.
"Reaffirmations" - the Borrower Reaffirmation and the
Subsidiary Reaffirmation executed and delivered on the Restatement Date.
"Reportable Event" - any of the events set forth in Section
4043(b) of ERISA.
"Reserve Percentage" - the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed on member
A-19
banks of the Federal Reserve System against "Eurocurrency Liabilities" as
defined in Regulation D.
"Response Date" - as defined in Subsection 12.17.1 of the
Agreement
"Restatement Date" - the date on which all of the conditions
precedent in Section 9 of the Agreement are satisfied or waived.
"Restricted Payment" - defined in Subsection 8.2.6.
"Revolving Credit Loan" - a Loan made by a Lender pursuant to
Section 1.1.1 of the Agreement.
"Revolving Credit Maximum Amount" - $250,000,000, as such
amount may be reduced or later increased from time to time pursuant to the terms
of the Agreement.
"Revolving Loan Commitment" - with respect to any Lender, the
amount of such Lender's Revolving Loan Commitment pursuant to Subsection 1.1.1
of the Agreement, as set forth below such Lender's name on the signature page
hereof, as the same may be reduced or later increased from time to time pursuant
to the terms of this Agreement.
"Revolving Loan Percentage" - with respect to each Lender, the
percentage equal to the quotient of such Lender's Revolving Loan Commitment
divided by the aggregate of all Revolving Loan Commitments.
"Revolving Notes" - the Revolving Notes to be executed by
Borrower on or about the Restatement Date in favor of each Lender to evidence
the Revolving Credit Loans, which shall be in the form of Exhibit 1.1 to the
Agreement, together with any replacement or successor notes therefore.
"Security" - all shares of stock, partnership interests,
membership interests, membership units or other ownership interests in any other
Person and all warrants, options or other rights to acquire the same.
"Security Documents" - the Guaranty Agreements, the Subsidiary
Security Agreements, the IP Security Agreements, the Pledge Agreement, the
Mortgages and all other instruments and agreements now or at any time hereafter
securing the whole or any part of the Obligations or any Guaranty thereof,
including any joinder agreement pursuant to which any Subsidiary or Affiliate of
Borrower becomes a party to any other Security Document.
"Senior Note Documents" - the Senior Note Indenture, the
Senior Notes and all other agreements, instruments and documents delivered by
Borrower or any of its subsidiaries in connection therewith.
"Senior Note Indenture" - the Indenture dated June 26, 2003
among the Borrower, its Subsidiaries and Xxxxx Fargo Bank Minnesota, N.A., as
trustee.
A-20
"Senior Notes" - Borrower's senior unsecured notes in the
aggregate principal amount of $150,000,000 due 2013 issued pursuant to the
Senior Note Indenture, and on terms and conditions satisfactory to the Lenders.
"Solvent" - as to any Person, such Person (i) owns Property
whose fair saleable value is greater than the amount required to pay all of such
Person's Indebtedness (including contingent debts discounted based on the
likelihood of their having to be paid), (ii) is able to pay all of its
Indebtedness as such Indebtedness matures and (iii) has capital sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage.
"Specified Real Property" - the four parcels of real property
owned by Borrower or Guarantor located at (i) 11755 Maricopa Industrial Parkway,
Pinal County, Arizona, (ii) 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx, (xxx) 0000
Xxxxxxxxxxx Xxxx, Xxxxxx, Xxxxx' and (iv) 0000 X.X. 00xx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx.
"Subsidiary" - any Person of which another Person owns,
directly or indirectly through one or more intermediaries, more than 50% of the
Voting Stock at the time of determination. For purposes of clarity, the term
"Subsidiary" shall include subsidiaries of Subsidiaries.
"Subsidiary Security Agreement" - the security agreement
executed by Borrower's Subsidiaries and Affiliates in favor of Agent, for the
benefit of the Lenders.
"Swing Line Loan" - as defined in Section 3.1.11 of the
Agreement.
"Term" - as defined in Section 4.1 of the Agreement.
"Total Credit Facility" - $250,000,000, as reduced or later
increased from time to time pursuant to the terms of the Agreement.
"Trailer Fleet Inventory" - new and used manufactured or
remanufactured Trailers held by Borrower or a Guarantor for intended lease or
rental to third parties.
"Trailers" - over-the-road tractor trailers and trailers
intended for use as storage facilities not constituting portable and ISO
containers owned by Borrower or any of its Subsidiaries.
"Type of Organization" - with respect to Borrower or any
Subsidiary of Borrower, the kind or type of entity by which Borrower or such
Subsidiary is organized, such as a corporation or limited liability company.
"UCC" - the Uniform Commercial Code as in effect in the State
of California on the date of this Agreement, as the UCC may be amended or
otherwise modified from time to time.
"Unfinanced Capital Expenditures" for any period, cash
expenditures made for Capital Expenditures during such period less the sum of
(i) the net cash proceeds received
A-21
during such period from Borrower's issuance of equity Securities, (ii) twenty
percent (20%) of the actual cost of all additions to Container Fleet Inventory
and Trailer Fleet Inventory during such period and (iii) forty percent (40%) of
the actual cost of all additions to machinery and equipment of Borrower and its
Subsidiaries during such period.
"Voting Stock" - Securities of any class or classes of a
corporation, limited partnership or limited liability company or any other
entity the holders of which are ordinarily, in the absence of contingencies,
entitled to vote with respect to the election of corporate directors (or Persons
performing similar functions).
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. The section titles, table of contents
and list of exhibits appear as a matter of convenience only and shall not affect
the interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.
A-22
LIST OF EXHIBITS AND SCHEDULES
Exhibits:
---------
Exhibit 1.1: Form of Revolving Note
Exhibit 6.1.1: Locations of Collateral; Chief Executive Office
Exhibit 7.1.1: Jurisdictions
Exhibit 7.1.4: Capital Structure
Exhibit 7.1.5: Names, Trade Names
Exhibit 7.1.13: Surety Obligations
Exhibit 7.1.14: Tax ID Numbers
Exhibit 7.1.15: Brokers Fees
Exhibit 7.1.16: Intellectual Property
Exhibit 7.1.19: Restrictive Agreements
Exhibit 7.1.20: Litigation
Exhibit 7.1.22: Leases
Exhibit 7.1.23: Plans
Exhibit 7.1.24: Trade Relations
Exhibit 7.1.25: Union Contracts
Exhibit 8.1.3: Form of Compliance Certificate
Exhibit 8.1.4: Form of Borrowing Base Certificate
Exhibit 8.2.2: Existing Indebtedness
Exhibit 8.2.3: Permitted Liens
Exhibit 8.2.7: Deposit Accounts
Exhibit 8.2.8: Affiliate Transactions
Exhibit 8.2.13: Liabilities (Operating Leases and Other Off Balance Sheet Financing)
Exhibit 8.3: Financial Covenants
List of Exhibits and Schedules
EXHIBIT 1.1
FORM OF REVOLVING NOTE
Exhibit 1.1 - Page 1
EXHIBIT 8.3
FINANCIAL COVENANTS
8.3.1 Fixed Charge Coverage Ratio. As of the end of each
fiscal quarter set forth below, Borrower and its Subsidiaries shall maintain a
Fixed Charge Coverage Ratio of not less than the ratio set forth below opposite
such date:
-----------------------------------------
Fiscal Quarter Fixed Charge
Ended on Coverage Ratio
-----------------------------------------
June 30, 2003 2.10 to 1.0
and thereafter
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Exhibit 8.3 - Page 1
8.3.2 Debt Ratio. As of the end of each fiscal quarter,
Borrower and its Subsidiaries shall maintain a Debt Ratio of not more than the
ratio set forth below opposite such date:
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Fiscal Quarter
Ended on Debt Ratio
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June 30, 2003 5.90 to 1.0
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September 30, 2003 5.90 to 1.0
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December 31, 2003 5.90 to 1.0
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March 31, 2004 5.90 to 1.0
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June 30, 2004 5.90 to 1.0
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September 30, 2004 5.75 to 1.0
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December 31, 2004 5.75 to 1.0
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March 31, 2005 5.75 to 1.0
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June 30, 2005 5.75 to 1.0
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September 30, 2005 5.75 to 1.0
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December 31, 2005 and 5.50 to 1.0
thereafter
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8.3.3 Minimum Availability. Borrower shall maintain at all
times an Availability of not less than $10,000,000, calculated for these
purposes only without deduction of the Availability Reserve.
8.3.4 Minimum Utilization. (a) Borrower and Guarantors
shall maintain minimum utilization rates for each fiscal quarter, calculated at
the end of each such quarter as the average amount during such quarter, and
calculated as the number of units of Eligible Container Fleet Inventory of
Borrower and the Guarantors which is then subject to valid, current rental or
lease agreements between Borrower or a Guarantor and the renters or lessees
thereof, divided by the aggregate number of units of Eligible Container Fleet
Inventory of Borrower and the Guarantors, of not less than (i) seventy five
percent (75%) in the first fiscal quarter of each year, (ii) seventy-five
percent (75%) in the second and third fiscal quarters of years 2003 and 2004;
(iii) seventy-six and one-quarter percent (76.25%) for the second and third
fiscal quarters of year 2005, and (iii) seventy-seven and one-half percent
(77.5%) in each other fiscal quarter; and
Exhibit 8.3 - Page 2
(b) (i) the number of units of the Eligible Container
Fleet Inventory of Borrower and the Guarantors which is then subject to valid,
current rental or lease agreements between Borrower or a Guarantor and the
renters or lessees thereof, divided by (ii) sum of (A) the aggregate number of
units of the Eligible Container Fleet Inventory of Borrower and the Guarantors,
and (B) the number of units of the Eligible Container Inventory Held For Sale of
Borrower and the Guarantors, of not less than seventy percent (70%) in the first
fiscal quarter in each year and seventy-two and one-half percent (72.5%) in each
other fiscal quarter; provided, that for the purposes of calculation of
compliance with this Subsection 8.3.4, the aggregate of the number of units of
Eligible Container Inventory Held For Sale, as a percentage of the sum of
clauses (A) and (B) above, shall not exceed five percent (5%).
Exhibit 8.3 - Page 3
