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EXHIBIT 10.5
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
among
MOBILE MINI, INC.
as Borrower,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.8 HEREOF,
as Lenders,
and
BT COMMERCIAL CORPORATION,
as Agent.
DATED AS OF DECEMBER ___, 1999
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS.................................................................................. 1
1.1 General Definitions................................................................. 1
1.2 Accounting Terms and Determinations................................................. 19
1.3 Other Terms; Headings............................................................... 19
1.4 Prior Credit Agreement.............................................................. 19
ARTICLE II. LOANS....................................................................................... 20
2.1 Term Loan Facility.................................................................. 20
(a) Amounts of Term Loans........................................................ 20
(b) Term Notes and Scheduled Term Loan Installments.............................. 20
2.2 Revolving Credit Commitments........................................................ 21
2.3 Borrowing of Revolving Loans........................................................ 21
(a) Lender Advances of Revolving Loans........................................... 21
(b) Agent Advances of Revolving Loans............................................ 21
(c) Disbursement of Revolving Loans.............................................. 22
(d) Notices of Borrowing......................................................... 22
2.4 Same Day Settlement of Lender Advances.............................................. 22
2.5 Periodic Settlement of Agent Advances and Repayments................................ 23
(a) The Settlement Date.......................................................... 23
(b) Summary Statements; Settlements of Principal................................. 23
(c) Distribution of Interest and Unused Line Fees................................ 23
2.6 Sharing of Payments................................................................. 24
2.7 Defaulting Lenders.................................................................. 24
ARTICLE III. LETTERS OF CREDIT.......................................................................... 25
3.1 Issuance of Letters of Credit....................................................... 25
3.2 Terms of Letters of Credit.......................................................... 25
3.3 Request for Issuance................................................................ 25
3.4 Lenders' Participation.............................................................. 25
3.5 Payment of Amounts Drawn Under Letters of Credit.................................... 26
3.6 Payment by Lenders.................................................................. 26
3.7 Nature of Issuing Bank's Duties..................................................... 26
3.8 Obligations Absolute................................................................ 26
3.9 Agent's Execution of Applications and Other Issuing Bank Documentation;
Reliance on Credit Agreement by Issuing Bank........................................ 27
3.10 Additional Payments................................................................. 27
3.11 Replacement of Lender............................................................... 27
ARTICLE IV. COMPENSATION, REPAYMENT AND REDUCTION OF COMMITMENTS........................................ 28
4.1 Interest on Prime Rate Loans........................................................ 28
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4.2 Interest on Eurodollar Rate Loans................................................... 28
4.3 Unused Line Fee..................................................................... 29
4.4 Letter of Credit Fees............................................................... 30
4.5 Interest After Event of Default..................................................... 30
4.6 Expenses; Fees...................................................................... 30
4.7 Mandatory Payment; Reduction of Commitments; Voluntary Prepayments.................. 31
(a) Mandatory Payment............................................................ 31
(b) [Intentionally deleted]...................................................... 31
(c) Reduction of Commitments..................................................... 31
(d) Voluntary Prepayments........................................................ 31
4.8 Maintenance of Loan Account; Statements of Account.................................. 31
4.9 Payment Procedures.................................................................. 31
4.10 Collection of Accounts.............................................................. 32
4.11 Application of Payments............................................................. 32
4.12 Calculations........................................................................ 33
4.13 Special Provisions Relating to Eurodollar Rate Loans................................ 33
(a) Continuation................................................................. 33
(b) Conversion................................................................... 33
(c) Certain Limitations on Eurodollar Rate Loans................................. 34
(d) Compensation................................................................. 35
4.14 Indemnification in Certain Events................................................... 36
4.15 Net Payments........................................................................ 36
4.16 Agreed Interest Rate................................................................ 38
ARTICLE V. CONDITIONS PRECEDENT......................................................................... 38
5.1 Conditions to Initial Loans and Letters of Credit................................... 38
(a) Closing Document List........................................................ 38
(b) Material Adverse Change...................................................... 38
(c) Fees and Expenses............................................................ 38
(d) Borrowing Base............................................................... 39
(e) Existing Indebtedness........................................................ 39
(f) Capitalization and Corporate Structure....................................... 39
(g) Opinion of Counsel........................................................... 39
(h) Insurance.................................................................... 39
(i) Cash Management System....................................................... 39
(j) Additional Documents......................................................... 39
5.2 Conditions Precedent to All Revolving Loans and Letters of Credit................... 40
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.............................................................. 40
6.1 Organization and Qualification...................................................... 40
6.2 Authority........................................................................... 41
6.3 Enforceability...................................................................... 41
6.4 No Conflict......................................................................... 41
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6.5 Consents and Filings................................................................ 41
6.6 Government Regulation............................................................... 41
6.7 Solvency............................................................................ 41
6.8 Rights in Collateral; Priority of Liens............................................. 42
6.9 Financial Data...................................................................... 42
6.10 Locations of Offices, Records and Inventory......................................... 42
6.11 Subsidiaries; Ownership of Stock.................................................... 42
6.12 No Judgments or Litigation.......................................................... 43
6.13 No Defaults......................................................................... 43
6.14 Labor Matters....................................................................... 43
6.15 Compliance with Law................................................................. 43
6.16 ERISA............................................................................... 43
6.17 Compliance with Environmental Laws.................................................. 44
6.18 Intellectual Property............................................................... 44
6.19 Licenses and Permits................................................................ 44
6.20 Taxes and Tax Returns............................................................... 44
6.21 Material Contracts.................................................................. 45
6.22 Accuracy and Completeness of Information; Updating of Schedule B.................... 45
6.23 Title to Property................................................................... 45
6.24 Affiliate Transactions.............................................................. 45
6.25 Recording Taxes..................................................................... 46
6.26 No Change........................................................................... 46
ARTICLE VII. AFFIRMATIVE COVENANTS...................................................................... 46
7.1 Financial Reporting................................................................. 46
(a) Annual Financial Statements.................................................. 46
(b) Projections and Budgets...................................................... 46
(c) Quarterly Financial Statements............................................... 47
(d) Monthly Financial Statements................................................. 47
(e) Monthly Comparison to Prior Projections...................................... 47
7.2 Collateral Reporting................................................................ 47
(a) Monthly Borrowing Base Certificates.......................................... 47
(b) Appraisals................................................................... 48
(c) Further Assurances........................................................... 48
7.3 Notification Requirements........................................................... 48
(a) Notice of Default............................................................ 48
(b) Proceedings or Adverse Changes............................................... 48
(c) ERISA Notices................................................................ 49
(d) Environmental and Health and Safety Notices.................................. 49
(e) Material Contracts........................................................... 49
(f) Collateral Matters........................................................... 49
(g) SEC Filings and Shareholder Communications................................... 50
7.4 Corporate Existence................................................................. 50
7.5 Books and Records; Inspection....................................................... 50
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7.6 Insurance........................................................................... 50
7.7 Taxes............................................................................... 51
7.8 Compliance with Laws................................................................ 51
7.9 Use of Proceeds..................................................................... 51
7.10 Fiscal Year......................................................................... 51
7.11 Maintenance of Property............................................................. 51
7.12 ERISA Documents..................................................................... 52
7.13 Further Assurances.................................................................. 52
ARTICLE VIII. NEGATIVE COVENANTS........................................................................ 52
8.1 Consolidated Tangible Net Worth..................................................... 52
8.2 EBITDA.............................................................................. 52
8.3 Fixed Charge Coverage Ratio......................................................... 52
8.4 Interest Coverage Ratio............................................................. 53
8.5 Current Ratio....................................................................... 53
8.6 Debt Ratio.......................................................................... 53
8.7 Minimum Utilization Rates........................................................... 54
8.8 Capital Expenditures................................................................ 54
8.9 Additional Indebtedness............................................................. 55
8.10 Liens............................................................................... 55
8.11 Contingent Obligations.............................................................. 57
8.12 Sale of Assets...................................................................... 57
8.13 Restricted Payments................................................................. 57
8.14 Investments......................................................................... 58
8.15 Affiliate Transactions.............................................................. 58
8.16 Additional Bank Accounts............................................................ 58
8.17 Excess Cash......................................................................... 58
8.18 Additional Negative Pledges......................................................... 59
8.19 No Subsidiaries..................................................................... 59
8.20 Operating Leases, Off-Balance Sheet Financing....................................... 59
8.21 Permitted Acquisitions.............................................................. 59
ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES.............................................................. 61
9.1 Events of Default................................................................... 61
(a) Failure to Pay............................................................... 61
(b) Breach of Certain Covenants.................................................. 61
(c) Breach of Representation or Warranty......................................... 61
(d) Other Breaches............................................................... 61
(e) Dissolution.................................................................. 62
(f) Insolvency Event............................................................. 62
(g) Change of Control............................................................ 62
(h) Cross Default................................................................ 62
(i) Failure of Enforceability of Credit Documents; Security...................... 62
9.2 Acceleration and Cash Collateralization............................................. 62
(a) Acceleration................................................................. 62
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(b) Termination Of Commitments......................................................63
(c) Cash Collateralization..........................................................63
9.3 Rescission of Acceleration.............................................................63
9.4 Remedies...............................................................................63
9.5 Right of Setoff........................................................................64
9.6 License for Use of Software and Other Intellectual Property............................64
9.7 No Marshaling; Deficiencies; Remedies Cumulative.......................................64
ARTICLE X. THE AGENT.......................................................................................65
10.1 Appointment of Agent...................................................................65
10.2 Nature of Duties of Agent..............................................................65
10.3 Lack of Reliance on Agent..............................................................65
10.4 Certain Rights of the Agent............................................................65
10.5 Reliance by Agent......................................................................65
10.6 Indemnification of Agent...............................................................66
10.7 The Agent in Its Initial Capacity......................................................66
10.8 Successor Agent........................................................................66
10.9 Collateral Matters.....................................................................67
10.10 Actions with Respect to Defaults.......................................................67
ARTICLE XI. MISCELLANEOUS..................................................................................67
11.1 GOVERNING LAW..........................................................................67
11.2 SUBMISSION TO JURISDICTION.............................................................68
11.3 SERVICE OF PROCESS.....................................................................68
11.4 JURY TRIAL.............................................................................68
11.5 LIMITATION OF LIABILITY................................................................68
11.6 Delays.................................................................................69
11.7 Notices................................................................................69
11.8 Assignments and Participations.........................................................69
(a) Borrower Assignment.............................................................69
(b) Lender Assignments..............................................................69
(c) Agent's Register................................................................70
(d) Lender Participations...........................................................70
11.9 Confidentiality........................................................................70
11.10 Indemnification; Reimbursement of Expenses of Collection...............................71
11.11 Amendments and Waivers.................................................................71
11.12 Counterparts and Effectiveness.........................................................72
11.13 Severability...........................................................................72
11.14 Maximum Rate...........................................................................72
11.15 Term of Agreement......................................................................73
11.16 Entire Agreement; Successors and Assigns...............................................73
11.17 Survival...............................................................................73
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ANNEXES
Annex I - List of Lenders and Commitment Amounts
Annex II - Account Debtors
EXHIBITS
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Term Note
Exhibit B-1 - Form of Borrower Security Agreement
Exhibit B-2 - Form of Subsidiaries Security Agreement
Exhibit C-1 - Form of Lockbox Agreement
Exhibit C-2 - Form of Blocked Account Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Notice of Borrowing
Exhibit G - Form of Assignment and Assumption Agreement
Exhibit H - Form of Collateral Access Agreement
Exhibit I - Form of Notice of Continuation
Exhibit J - Form of Notice of Conversion
Exhibit K - Form of Letter of Credit Request
Exhibit L - Form of Mortgage
Exhibit M - [intentionally deleted]
Exhibit N - Form of Guaranty
Exhibit O - Form of Intercreditor Agreement
Exhibit P - Form of Pledge Agreement
Exhibit Q - Form of Confirmation and Grant of Security Interests in
Patents and Patent Applications
Exhibit R - Form of Confirmation and Grant of Security Interests in
Trademarks and Trademark Applications
SCHEDULES
Schedule A - Closing Document List
Schedule B - Disclosure Schedule
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THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Credit
Agreement") is entered into as of December ___, 1999, among MOBILE MINI, INC., a
Delaware corporation (the "Borrower"), each financial institution identified on
Annex I (together with its successors and assigns, a "Lender"), and BT
COMMERCIAL CORPORATION acting as agent for the Lenders (the "Agent").
ARTICLE I.
DEFINITIONS
1.1 General Definitions.
Account means "Accounts" as defined in the Borrower Security Agreement.
Adjusted Eurodollar Rate means, with respect to each Interest Period
for any Eurodollar Rate Loan, the rate obtained by dividing (i) the Eurodollar
Rate for such Interest Period by (ii) a percentage equal to 1 minus the stated
maximum rate (stated as a decimal) of all reserves, if any, required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities which includes deposits by reference
to which the interest rate on Eurodollar Rate Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents).
Affiliate of a Person means another Person who directly or indirectly
controls, is controlled by, is under common control with or is a director or
officer of such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of the securities having ordinary voting power for the election of
directors or the direct or indirect power to direct the management and policies
of a business.
Agent Advances is defined in Section 2.3.
Applicable Lending Office means, with respect to each Lender, such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan, and
such Lender's Domestic Lending Office in the case of a Prime Rate Loan.
Acquisition means (i) the acquisition by the Borrower or any of its
Subsidiaries of all of the issued and outstanding capital stock or other equity
interests of a Person, (ii) the acquisition by the 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 the Borrower or any
of its Subsidiaries with a Person other than a Person that was a Subsidiary of
the Borrower or such Subsidiary immediately prior to such merger.
Assignment and Assumption Agreement is defined in Section 11.8.
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Auditors means a nationally recognized firm of independent public
accountants selected by the Borrower and satisfactory to the Agent in its sole
discretion. For purposes of this Credit Agreement, the firm of Xxxxxx Xxxxxxxx
LLP or any other of the accounting firms commonly referred to as one of the "big
five" as of the Closing Date shall be deemed to be satisfactory to the Agent.
Bankruptcy Code means Title 11 of the U.S. Code (11 U.S.C.
Sections 101 et seq.), as amended from time to time, and any successor
statute.
Benefit Plan means a "defined benefit plan" (as defined in Section
3(35) of ERISA) for which the Borrower, any Subsidiary or any ERISA Affiliate
has been an "employer" (as defined in Section 3(5) of ERISA) within the past
three years.
Blocked Accounts, Blocked Account Agreements, and Block Account Bank
are defined in Section 4.10.
Borrower Security Agreement means the Security Agreement executed by
the Borrower in favor of the Agent pursuant to Section 5.1(a), substantially in
the form of Exhibit B-1.
Borrowing means a borrowing of Revolving Loans or Term Loans of the
same Type on the same day.
Borrowing Base means the sum of:
(A) eighty-five percent (85%) of Eligible Accounts Receivable, plus
(B) ninety percent (90%) of Eligible Container Fleet Inventory, plus
(C) seventy percent (70%) of Eligible Trailer Fleet Inventory, plus
(D) the lesser of (i) $6,000,000 and (ii) the sum of (1) ninety
percent (90%) of Eligible Container Inventory Held For Sale, (2) ninety
percent (90%) of Eligible Work-In-Process Container Inventory (up to a
maximum of $500,000), (3) seventy-five percent (75%) of Eligible Primary
Raw Materials Inventory, and (4) sixty percent (60%) of Eligible Other Raw
Material Component Inventory, minus
(E) the aggregate amount of reserves, if any, established by the Agent
under Section 2.2(b).
Borrowing Base Certificate means a certificate of the Borrower
concerning the Borrowing Base to be provided under Section 7.2 and substantially
in the form of Exhibit E.
Business Day means any day that is not a Saturday, Sunday or a day on
which commercial banks in Los Angeles are required or permitted by law to be
closed. When used in connection with Eurodollar Rate Loans, this definition will
also exclude any day on which
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commercial banks are not open for dealing in U.S. dollar deposits in the London
(England, U.K.) interbank market.
Capital Expenditures for a period means, the sum of all expenditures
capitalized for financial statement purposes in accordance with GAAP (whether
payable in cash or other property or accrued as a liability), including the
capitalized portion of capital leases and that portion of Investments allocable
to property, plant or equipment. Capital Expenditures shall exclude new and used
manufactured or remanufactured portable container inventory held for sale and
proceeds of a Casualty Loss applied to the repair or replacement of the property
affected by the Casualty Loss.
Cash Equivalent means either of the following, so long as the same are
maintained in accounts in which the 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 the 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 means (i) the loss, damage, or destruction of any asset
owned or used by the 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.
Certificate of Title means 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 means either: (a) other than members of management as
of the Closing 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
Closing Date is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
such Act), directly or indirectly, of securities of the Borrower representing
10% or more of the combined voting power of the Borrower's then-outstanding
securities; or (b) the existing directors for any reason cease to constitute 75%
of the Borrower's Board of Directors. For purposes of this definition, "existing
directors" means (i) individuals constituting the Borrower's Board of Directors
on the Closing Date, and (ii) any subsequent director whose election by the
Board of Directors or nomination for election by the 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 Closing Date or whose election or
nomination for election was previously so approved.
Closing Date means the date of execution and delivery of this Credit
Agreement and the satisfaction of the conditions precedent set forth in Article
5.
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Closing Document List is defined in Section 5.1.
Code is defined in Section 1.3.
Collateral means the Accounts, Inventory, Equipment, Intangibles,
Specified Real Property, investment property (as defined in the Code) and other
property identified as security for the Obligations under the Collateral
Documents but shall exclude any funds, assets or proceeds contained in the
Reserve Account (as defined in the documents evidencing any Subordinated Debt
existing as of the Closing Date) as long as the aggregate amount of such funds,
assets or proceeds does not exceed $375,000.
Collateral Access Agreement means any landlord waivers, mortgagee
waivers, bailee letters or any similar acknowledgment agreements of any
warehouseman or processor in possession of Inventory, substantially in the form
of Exhibit H.
Collateral Documents means the Borrower Security Agreement, the Pledge
Agreement, the Subsidiaries Security Agreements, the Patent Security Agreements,
the Trademark Security Agreements, the Guaranties, the Mortgages and all other
contracts, instruments and other documents pursuant to which Liens are now or
hereafter granted to the Agent to secure the Obligations.
Collections means all cash, funds, checks, notes, instruments and any
other form of remittance tendered by account debtors in payment of Accounts.
Commitment of a Lender means its Term Commitment and Revolving Credit
Commitment, in each case then in effect.
Concentration Account is defined in Section 4.10.
Consolidated Fixed Charges means the sum of (i) Interest Expense and
(ii) the principal amounts (including the principal portion of rentals payable
under capital leases) of all Indebtedness (but excluding repayments of Revolving
Loans which do not permanently reduce the Commitments, and excluding payments of
Indebtedness made from the proceeds of asset sales which Indebtedness is payable
by the Borrower due to the sale of assets previously under lease) of the
Borrower and its Subsidiaries payable for the applicable period.
Consolidated Tangible Net Worth means the (a) consolidated assets of
the Borrower and its Subsidiaries, minus (b) their consolidated liabilities,
minus (c)(1) patents, copyrights, trademarks, trade names, franchises, licenses,
customer and subscription lists, goodwill and other similar intangibles
(excluding net reorganization value), (2) leasehold improvements, (3)
organization expenses, (4) obligations due to the Borrower from Affiliates
(including any officer, director or shareholder thereof) and (5) security
deposits and prepaid costs and expenses and other deferred assets, plus (d) the
principal amount of Indebtedness permitted by this Credit Agreement and
subordinated to the Obligations on terms satisfactory to the Lenders; provided,
however, that the Subordinated Debt and any proceeds thereof shall be excluded
from the calculation of Consolidated Tangible Net Worth herein.
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Contingent Obligation means any direct, indirect, contingent or
non-contingent guaranty or obligation for the Indebtedness of another, except
endorsements in the ordinary course of business.
Covered Taxes is defined in Section 4.15.
Credit Documents means, collectively, this Credit Agreement, the Term
Notes, the Revolving Notes, the Letters of Credit, each of the Collateral
Documents, and all other documents, agreements, instruments, opinions and
certificates now or hereafter executed and delivered in connection herewith or
therewith, as modified, amended, extended, restated or supplemented from time to
time.
Credit Parties means, collectively, the Borrower and each Subsidiary
which is or becomes a party to any Credit Document.
Current Assets means the consolidated current assets of the Borrower
and its Subsidiaries determined in accordance with GAAP, excluding cash.
Current Liabilities means the consolidated current liabilities of the
Borrower and its Subsidiaries determined in accordance with GAAP, excluding the
principal balance of the Revolving Loans and the current portion of long term
debt.
Default means an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
Defaulting Lender is defined in Section 2.7.
Disbursement Account means the operating account of the Borrower
maintained with the Disbursement Account Bank.
Disbursement Account Bank means Deutsche Bank.
Domestic Lending Office means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" opposite its name on
Annex I hereto, as such annex may be amended from time to time.
EBITDA for a period means the consolidated net income of the Borrower
and its Subsidiaries (excluding extraordinary gains, non-cash extraordinary
losses and extraordinary losses arising from prepayments of Indebtedness
incurred on or about the Closing Date in connection with the initial funding of
the Loans) for the period (a) plus all Interest Expense, income tax expense,
depreciation and amortization (including amortization of any goodwill or other
intangibles) for the period, (b) less gains or plus losses attributable to any
fixed asset sales (excluding sales of containers held for lease) in the period
and (c) plus or minus any other non-cash charges which have been subtracted or
added in calculating consolidated net income. EBITDA for any such period shall
be calculated by giving pro forma effect to any acquisition during such period
which is permitted by the terms of this Credit Agreement, as if such acquisition
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had been consummated on the first day of such period, as long as the Borrower
shall have delivered to the Agent audited financial statements for such period.
Eligible Accounts Receivable means Accounts of the Borrower deemed by
the Agent in the exercise of its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, the face amount of such Accounts shall be reduced by the amount
of all returns, discounts, claims, credits, charges, or other allowances and by
the aggregate amount of all reserves, limits and deductions provided for in this
definition and elsewhere in this Credit Agreement. Unless otherwise approved in
writing by the Agent, an Account shall not be an Eligible Account Receivable if:
(a) it arises out of a sale made by the Borrower to an Affiliate of the
Borrower; or
(b) its payment terms are longer than 30 days from date of invoice
(unless Borrower has identified such Account and its payment terms to Agent in
writing during the immediately preceding 30 days and (i) it is an Account that
has payment terms no longer than 45 days from the date of invoice or (ii) it is
an Account that has payment terms no longer then 90 days from the date of
invoice and no more than $200,000 of such Accounts shall be outstanding at any
time); or
(c) it is unpaid more than 120 days from date of invoice; or
(d) it is from the same account debtor or its Affiliate and 50% or more
of all Accounts from that account debtor (and its Affiliates) are ineligible
under (c) above; or
(e) when aggregated with all other Accounts of an account debtor (i)
that is not identified on Annex II attached hereto, the Account exceeds five
percent (5%) in face value of all Accounts of the Borrower then outstanding, or
(ii) that is identified on Annex II attached hereto, the Account exceeds seven
percent (7%) in face value of all Accounts of the Borrower then outstanding, in
each case to the extent of such excess, unless supported by an irrevocable
letter of credit satisfactory to the Agent (as to form, substance and issuer)
and assigned to and directly drawable by the Agent; or
(f) the account debtor for the Account is a creditor of the Borrower,
has or has asserted a right of setoff, has disputed its liability or made any
claim with respect to the Account or any other Account which has not been
resolved, to the extent of the amount owed by the Borrower to the account
debtor, the amount of such actual or asserted right of setoff, or the amount of
such dispute or claim, as the case may be; or
(g) the account debtor is (or its assets are) the subject of an
Insolvency Event; or
(h) the Account is not payable in Dollars or the account debtor for the
Account is located outside the United States or Canada, unless the Account is
supported by an irrevocable letter of credit satisfactory to the Agent (as to
form, substance and issuer) and assigned to and directly drawable by the Agent;
or
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(i) the sale to the account debtor is on a xxxx-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or made pursuant to
any other written agreement providing for repurchase or return; or
(j) the Agent determines in the exercise of its Permitted Discretion by
its own credit analysis that collection of the Account is uncertain or the
Account may not be paid; or
(k) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower duly assigns
its rights to payment of such Account to the Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Sections 3727 et seq.); or
(l) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor, the services giving rise to
such Account have not been performed and accepted, or the Account otherwise does
not represent a final sale; or
(m) the Account does not comply with all Requirements of Law, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board of Governors of the Federal Reserve
System; or
(n) the Account is subject to any adverse security deposit, progress
payment or other similar advance made by or for the benefit of the applicable
account debtor; or
(o) it is not subject to a valid and perfected first priority Lien in
favor of the Agent or does not otherwise conform to the representations and
warranties contained in the Credit Documents.
Eligible Container Fleet Inventory means Eligible Goods Inventory
consisting of new and used manufactured or remanufactured portable and ISO
containers, valued at the lower of the Borrower's cost (on a basis consistent
with the Borrower's current and historical accounting practice) or orderly
liquidation value, held by the Borrower for intended lease or rental by the
Borrower to third party end users.
Eligible Container Inventory Held For Sale means Eligible Goods
Inventory consisting of new and used manufactured or remanufactured portable and
ISO containers, valued at the lower of the Borrower's cost (on a basis
consistent with the Borrower's current and historical accounting practice) or
orderly liquidation value, held by the Borrower for intended sale to third
parties, containers used by the Borrower, and containers temporarily out of
service.
Eligible Goods Inventory means Inventory of the Borrower deemed by the
Agent in the exercise of its Permitted Discretion to be eligible for inclusion
in the calculation of the Borrowing Base. In determining the amount to be so
included, Inventory shall be valued at the lower of cost or market on a basis
consistent with the Borrower's current and historical accounting practice unless
otherwise provided herein. Unless otherwise approved in writing by the Agent, no
Inventory shall be deemed Eligible Goods Inventory if:
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(a) it is not owned solely by the Borrower or the Borrower does not
have good, valid and marketable title thereto; or
(b) it is not located in the United States; or
(c) it is not subject to valid, current rental or lease agreements
between the Borrower and the renters or lessees thereof or is not located on
property owned or leased by the Borrower 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 identifiable from goods of others, if any, stored on the
premises; provided, however, that as to the Borrower's facilities located at
0000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxx, and 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx,
Xxxxxxx, the Borrower shall be required only to use its best efforts to obtain
Collateral Access Agreements executed by the lessors of such premises, and if
the Borrower is not successful in obtaining such agreements, Inventory located
thereat may remain eligible, but the Agent shall create a reserve against
borrowing availability equal to two (2) months' rent payable by the Borrower at
any such facility; and provided, further, that the only such Collateral Access
Agreement required of a mortgagee, based upon the Borrower's operations and the
mortgagees disclosed to the Agent as of the Closing Date, shall be the mortgagee
with respect to the Borrower's Rialto, California premises; or
(d) it is not subject to a valid and perfected first priority Lien in
favor of the 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 the Borrower'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 slow moving, or does not otherwise conform to the representations
and warranties contained in the Credit 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) it is Eligible Raw Materials Inventory.
Eligible Inventory means Eligible Goods Inventory and Eligible Raw
Materials Inventory.
Eligible Other Raw Materials Component Inventory means Eligible Raw
Materials Inventory purchased from third parties consisting of plumbing,
drywall, electrical components, insulation materials, HVAC materials, doors and
windows, fasteners, and located on the Closing Date or thereafter at the
Borrower's Maricopa facility or such other facility of the Borrower as to which
the Borrower implements after the Closing Date a perpetual inventory accounting
system comparable to that of the Maricopa facility.
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Eligible Primary Raw Materials Inventory means Eligible Raw Materials
Inventory consisting of unrefurbished ISO units, steel, lumber, plywood and
paint, and located on the Closing Date or thereafter at the Borrower's Maricopa
facility or such other facility of the Borrower as to which the Borrower
implements after the Closing Date a perpetual inventory accounting system
comparable to that of the Maricopa facility or, with respect only to the
unrefurbished ISO units, at such other facility of the Borrower which accounts
for such units in a manner which is acceptable to Agent, in its sole discretion.
Eligible Raw Materials Inventory means Inventory deemed by the Agent in
the exercise of its Permitted Discretion to be eligible for inclusion in the
calculation of the Borrowing Base. In determining the amount to be so included,
Inventory shall be valued at the lower of cost or market on a basis consistent
with the Borrower's current and historical accounting practice unless otherwise
provided herein. Unless otherwise approved in writing by the Agent, no Inventory
shall be deemed Eligible Raw Materials Inventory if:
(a) it is not owned solely by the Borrower or the Borrower 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 the Borrower 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 to the Borrower's facilities located at
0000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxx, and 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx,
Xxxxxxx, the Borrower shall be required only to use its best efforts to obtain
Collateral Access Agreements executed by the lessors of such premises, and if
the Borrower is not successful in obtaining such agreements, Inventory located
thereat may remain eligible, but the Agent shall create a reserve against
borrowing availability equal to two (2) months' rent payable by the Borrower at
any such facility; and provided, further, that the only such Collateral Access
Agreement required of a mortgagee, based upon the Borrower's operations and the
mortgagees disclosed to the Agent as of the Closing Date, shall be the mortgagee
with respect to the Borrower's Rialto, California; or
(d) it is not subject to a valid and perfected first priority Lien in
favor of the 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 the Borrower'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.
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Eligible Trailer Fleet Inventory means Eligible Goods Inventory
consisting of new and used manufactured or remanufactured Trailers, valued at
the lower of the Borrower's cost (on a basis consistent with the Borrower's
current and historical accounting practice) or orderly liquidation value, held
by the Borrower for intended lease or rental by the Borrower to third party end
users, and shall exclude 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 means Eligible Goods
Inventory consisting of : (a) new and used manufactured or remanufactured
portable containers, valued at the Borrower's cost on a basis consistent with
the Borrower's current and historical accounting practices, which is in the
work-in-process phase of manufacturing, including any ISO units as to which any
refurbishing or repair has been performed; (b) shaped steel component parts; or
(c) sub-assemblies and which are located on the Closing Date or thereafter at
the Borrower's Maricopa facility or at such other facility of the Borrower as to
which the Borrower implements after the Closing Date a perpetual inventory
accounting system comparable to that of the Maricopa facility.
Equipment means "Equipment" as defined in the Borrower Security
Agreement.
ERISA means the Employee Retirement Income Security Act of 1974, 29
U.S.C. Sections 1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
ERISA Affiliate means any entity required to be aggregated with the
Borrower or any of its Subsidiaries under Sections 414(b), (c), (m) or (o) of
the Internal Revenue Code.
Eurodollar Lending Office means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office," opposite its name
on Annex I, as such annex may be amended from time to time (or, if no such
office is specified, its Domestic Lending Office), or such other office or
Affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
Eurodollar Rate means, with respect to the Interest Period for each
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate per
annum equal to the rate (rounded upward to the nearest whole multiple of
one-sixteenth (1/16) of one percent (1.00%) per annum, if such rate is not such
a multiple) of the offered quotation, if any, to first class banks in the
Eurodollar market by Deutsche Bank as the rate per annum for U.S. dollar
deposits of amounts in immediately available funds comparable to the principal
amount of the Eurodollar Rate Loan for which the Eurodollar Rate is being
determined with maturities comparable to the Interest Period for which such
Eurodollar Rate will apply as of approximately 10:00 A.M. New York City time two
(2) Business Days prior to the commencement of such Interest Period.
Eurodollar Rate Loan means a Revolving Loan or Term Loan that bears
interest as provided in Section 4.2 hereof.
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Event of Default is defined in Article 9.
Expense means all reasonable out-of-pocket costs and expenses of the
Agent in connection with the Credit Documents and the transactions contemplated
therein, including, without limitation, (i) the costs of conducting record
searches, examining collateral, opening bank accounts and lockboxes, depositing
checks, and receiving and transferring funds (including charges for checks for
which there are insufficient funds), and other costs of administration and
enforcement of the rights of the Lenders under the Credit Documents, (ii) the
fees and expenses of legal counsel and paralegals (including the allocated cost
of internal counsel and paralegals), accountants, appraisers and other
consultants, experts or advisors retained by the Agent, (iii) fees and expenses
incurred in connection with the assignments of or sales of participations in the
Loans, (iv) the cost of title insurance premiums, real estate survey costs, fees
and taxes in connection with the filing of financing statements, and (v) the
costs of preparing and recording Collateral Documents, releases of Collateral,
and waivers, amendments, and terminations of any of the Credit Documents.
Expiration Date means the seventh anniversary of the Prior Closing
Date; provided, however, in the event that no Event of Default shall have
occurred and be continuing on such seventh anniversary date then the term of
this Agreement shall be extended for one (1) year and the Expiration Date shall
be the eighth anniversary date of the date of this Agreement upon the delivery
by the Borrower to the Agent of the 90 days' prior written notice required under
Section 11.15.
Fees means, collectively, the Unused Line Fee, the Letter of Credit
Fees, the Issuing Bank Fees and the other fees provided in any fee letter
between Agent or any Lender and Borrower.
Financial Statements means the consolidated and consolidating balance
sheets, statements of operations, statements of cash flows and statements of
changes in shareholder's equity of the Borrower and its Subsidiaries for the
period specified, prepared in accordance with GAAP and consistently with prior
practices.
Foreign Lender means any Lender organized under the laws of a
jurisdiction outside of the United States.
Funded Debt means any obligation payable more than one year from the
date of determination thereof, which under GAAP is shown on the balance sheet as
a liability, including obligations under capital leases, but excluding items
customarily reflected below current liabilities, such as deferred federal taxes
on income and other reserves.
GAAP means generally accepted accounting principles in the United
States as in effect from time to time.
Governing Documents means certificates or articles of incorporation,
by-laws and other organizational or governing documents.
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Governmental Authority means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Guaranties means the Guaranties executed by the Borrower's Subsidiaries
in favor of the Agent pursuant to Section 5.1(a), substantially in the form of
Exhibit N.
Highest Lawful Rate means, at any given time during which any
Obligations shall be outstanding hereunder, the maximum non-usurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Obligations, under the laws of the
State of California (or the law of any other jurisdiction whose laws may be
mandatorily applicable notwithstanding other provisions of this Credit Agreement
and the other Credit Documents), or under applicable federal laws which may
presently or hereafter be in effect and which allow a higher maximum
non-usurious interest rate than under California (or such other jurisdiction's)
law, in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this Credit
Agreement and any other Credit Documents executed in connection herewith, and
any available exemptions, exceptions and exclusions.
Intangibles means "Intangibles" as defined in the Borrower Security
Agreement and "Collateral" as defined in the Patent Security Agreement executed
by the Borrower.
Intercreditor Agreements means the Intercreditor Agreements executed by
the lessors of containers to the Borrower in favor of the Agent pursuant to
Section 5.1(a), substantially in the form of Exhibit O.
Indebtedness of a Person means (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) obligations under capital
leases, (c) reimbursement obligations for letters of credit, banker's
acceptances or other credit accommodations, (d) liabilities, as determined by
the Agent, under any Interest Rate Agreement, (e) Contingent Obligations and (f)
obligations secured by any Lien on that Person's property, even if that Person
has not assumed such obligations.
Insolvency Event means, with respect to any Person, the occurrence of
any of the following: (a) such Person shall be adjudicated insolvent or
bankrupt, or shall generally fail to pay or admit in writing its inability to
pay its debts as they become due, (b) such Person shall seek dissolution or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for it or a substantial portion of its property, assets or business
or to effect a plan or other arrangement with its creditors, (c) such Person
shall make a general assignment for the benefit of its creditors, or consent to
or acquiesce in the appointment of a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business, (d) such Person
shall file a voluntary petition under any bankruptcy, insolvency or similar law,
or (e) such Person, or a substantial portion of its property, assets or business
shall become the subject of an involuntary proceeding or petition for its
dissolution, reorganization, or the appointment of a receiver, trustee,
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custodian or liquidator or shall become subject to any writ, judgment, warrant
of attachment, execution or similar process, and any such proceeding, petition,
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy, as the case may be, or any order for relief shall be entered in any such
proceeding.
Interest Expense means the consolidated expense of the 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 means for any Eurodollar Rate Loan the period
commencing on the date of such Borrowing and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three or (unless a Lender shall
have notified the Agent that the Eurodollar Rate determined by the Agent for the
proposed Borrowing will not adequately reflect the cost to the Lender of making
or funding its Loan for the Borrowing) six months, in each case as the Borrower
may, in an appropriate Notice of Borrowing, Notice of Continuation or Notice of
Conversion, select; provided, however, that the Borrower may not select any
Interest Period that ends after the Expiration Date. Whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the last
day of such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding Business Day.
Interest Rate Agreement means any interest rate protection or hedge
agreement, including, without limitation, interest rate future, option, swap,
and cap agreements.
Internal Revenue Code means the Internal Revenue Code of 1986,
amendments thereto, successor statutes, and regulations or guidance promulgated
thereunder.
Inventory means "Inventory" as defined in the Borrower Security
Agreement.
Investment means all expenditures made and all liabilities incurred
(including Contingent Obligations) for or in connection with the acquisition of
stock 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 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.
Issuing Bank means Deutsche Bank, any Lender or any Affiliate of any
Lender, or any other financial institution that is acceptable to the Agent and
the Borrower which may at any time issue or be requested to issue a Letter of
Credit for the account of the Borrower (or for the
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joint account of the Borrower and the Agent or any Lender) under this Credit
Agreement. If there is more than one Issuing Bank, all references to "the
Issuing Bank" shall be deemed to refer to each Issuing Bank or to all Issuing
Banks, as the context requires.
Issuing Bank Fees is defined in Section 4.4.
Lender Advances is defined in Section 2.3.
Letter of Credit Fee is defined in Section 4.4.
Letter of Credit Obligations means the sum of (i) the aggregate undrawn
amount of all Letters of Credit outstanding, plus (ii) the aggregate amount of
all drawings under Letters of Credit for which the Borrower has not reimbursed
the Issuing Bank, plus (iii) the aggregate amount of all payments made by the
Lenders to the Issuing Bank for participations in Letters of Credit for which
the Borrower has not reimbursed the Lenders.
Letter of Credit Request is defined in Section 3.3.
Letters of Credit means the standby letters of credit issued for the
account of the Borrower under Article 3 and all amendments, renewals, extensions
or replacements thereof.
Lien means any lien, claim, charge, pledge, security interest,
assignment, hypothecation, deed of trust, mortgage, lease, conditional sale,
retention of title, or other preferential arrangement having substantially the
same economic effect as any of the foregoing, whether voluntary or imposed by
law.
Loan or Loans means one or more of the Revolving Loans or Term Loans or
any combination thereof.
Loan Account is defined in Section 4.8.
Lockboxes, Lockbox Agreements, and Lockbox Bank are defined in Section
4.10.
Majority Lenders means those Lenders owed or holding in the aggregate
more than fifty percent (50%) of the Total Commitments or, if the
Commitments are terminated, more than fifty percent (50%) of the Loans
and Letter of Credit obligations then outstanding.
Mandatory Redeemable Obligation means an obligation of the 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 the Borrower or such
Subsidiary, or (c) upon the occurrence of a condition not solely within the
control of the Borrower or such Subsidiary, such as a redemption required to be
made out of future earnings.
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 the Credit Parties, taken as a whole, (ii)
the impairment of any Credit Party's ability to perform
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its obligations under the Credit Documents to which it is a party or of the
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 the Agent or the Lenders would receive (after
giving consideration to delays in payment and costs of enforcement) in the
liquidation of such Collateral.
Material Contract means any contract or other arrangement to which the
Borrower or any of its Subsidiaries is a party (other than the Credit Documents)
for which breach, nonperformance, cancellation or failure to renew could have a
Material Adverse Effect.
Mortgages means the fee and leasehold deeds of trust executed pursuant
to Section 5.1(a), substantially in the form of Exhibit L.
Multiemployer Plan means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which the Borrower, any of its Subsidiaries or any ERISA
Affiliate has contributed within the past six years or with respect to which the
Borrower or any of its Subsidiaries may incur any liability.
Notes means one or more of the Revolving Notes or Term Notes or any
combination thereof.
Notice of Borrowing is defined in Section 2.3.
Notice of Continuation is defined in Section 4.13(a) hereof.
Notice of Conversion is defined in Section 4.13(b) hereof.
Obligations means the unpaid principal and interest hereunder
(including interest accruing on or after the occurrence of an Insolvency Event),
reimbursement obligations under Letters of Credit, Fees, Expenses and all other
obligations and liabilities of the Borrower to the Agent, the Issuing Bank or to
the Lenders under this Credit Agreement, the Revolving Notes, the Term Notes or
any other Credit Document.
Patent Security Agreements means the Confirmation and Grant of Security
Interests in Patents and Patent Applications executed by the Borrower and the
Borrower's Subsidiaries in favor of the Agent pursuant to Section 5.1(a),
substantially in the form of Exhibit Q.
Permitted Acquisition means an Acquisition consummated by the Borrower
that is permitted under Section 8.21.
Permitted Discretion means the Agent's good faith judgment, exercised
in a commercially reasonable manner, as to any factor not known by the Agent or
not existing on the Closing Date or on the date of any subsequent Loan advance
which it reasonably believes in good faith: (i) will adversely affect the
enforceability or priority of the Agent's Liens on any material portion of the
Collateral or materially adversely affect the amount which the Agent and the
Lenders receive (after giving consideration to delays in payment and costs of
enforcement) in the
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liquidation of such Collateral; (ii) demonstrates that any collateral report or
financial information delivered to the Agent by any Person on behalf of the
Borrower is incomplete, inaccurate or misleading in any material respect; (iii)
materially increases the likelihood of a bankruptcy, reorganization or other
insolvency proceeding involving the Borrower or any of its Subsidiaries or any
material portion of the Collateral, or (iv) creates a Default or Event of
Default. In exercising such good faith judgment, the Agent may consider material
changes in the factors already included in or tested by the definition of
Eligible Accounts Receivable or Eligible Inventory, as well as any of the
following: (a) material changes in collection history and dilution with respect
to the Accounts, (b) material changes in demand for, and pricing of, Inventory,
and (c) any other factors that materially change the credit risk of lending to
the Borrower on the security of the Accounts or the Inventory.
Person means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and its successors, heirs and assigns.
Plan means any employee benefit plan, program or arrangement maintained
or contributed to by the Borrower or any of its Subsidiaries, or with respect to
which any of them may incur liability.
Pledge Agreement means the Pledge Agreement executed by the Borrower in
favor of the Agent pursuant to Section 5.1(a), substantially in the form of
Exhibit P.
Prime Lending Rate means the rate which Deutsche Bank announces as its
prime lending rate from time to time. The Prime Lending Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer. Deutsche Bank and each of the Lenders may make commercial loans or
other loans at rates of interest at, above or below the Prime Lending Rate.
Prime Rate Loan means a Revolving Loan or Term Loan that bears interest
as provided in Section 4.1 hereof.
Prior Closing Date means March 28, 1996.
Prior Credit Agreement means that certain Credit Agreement dated as of
the Prior Closing Date by and among the Borrower, BT Commercial Corporation, as
agent, and the financial institutions from time to time party thereto, as the
same shall have been amended, restated, amended and restated, supplemented or
otherwise modified from time to time prior to the date hereof.
Proportionate Share of a Lender means a fraction, expressed as a
decimal, obtained by dividing its Commitment by the total Commitments of all the
Lenders or, if the Commitments are terminated, by dividing its then outstanding
Loans and/or Letter of Credit participations by the aggregate Loans and/or
Letter of Credit Obligations then outstanding.
Purchase Money Liens and Leases is defined in Section 8.9.
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Real Property means all real property owned or leased by the Borrower,
together with all fixtures, improvements and other structures thereon.
Register is defined in Section 11.8.
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
Reportable Event means any of the events described in Section 4043 of
ERISA and the regulations thereunder.
Requirement of Law means (a) the Governing Documents of a Person, (b)
any applicable law, treaty, rule or regulation or determination of an
arbitrator, court or other Governmental Authority, or (c) any franchise,
license, lease, permit, certificate, authorization, qualification, easement,
right of way, right or approval binding on a Person or any of its property.
Retiree Health Plan means an "employee welfare benefit plan" within the
meaning of Section 3(l) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.
Revolving Credit Commitment of a Lender means its commitment to make
Revolving Loans and to participate in Letters of Credit, up to the amount set
forth opposite its name on Annex I, as such annex may be amended from time to
time, under the heading "Revolving Credit Commitment," as such amount may be
reduced from time to time.
Revolving Loans is defined in Section 2.2.
Revolving Note means a promissory note of the Borrower payable to the
order of any Lender, substantially in the form of Exhibit A-1.
Scheduled Term Loan Installment is defined in Section 2.1.
Second Equity Issuance means the issuance by the Borrower of
approximately $40,000,000 of its common stock in a public offering during or
around May 1999.
Settlement Date is defined in Section 2.5.
Specified Real Property means the four parcels of Real Property owned
or leased by the Credit Parties located at (i) 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx, (ii) 00000 Xxxxx Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx, (iii)
0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx, (iv) 0000 Xxxxxxxxxxx Xxxx, Xxxxxx,
Xxxxx; and (v) 0000 X.X. 00xx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx.
Subsidiaries Security Agreement means the Security Agreements executed
by the Subsidiaries of the Borrower in favor of the Agent pursuant to Section
5.1(a), substantially in the form of Exhibit B-2.
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Subsidiary of a Person means a corporation or other entity in which
that Person directly or indirectly owns or controls the shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or appoint other managers of such corporation or other
entity.
Subordinated Debt means Indebtedness in the aggregate principal amount
of $6,000,000 owing under the 12% Senior Subordinated Notes Due 2002 issued by
the Borrower on or about October 14, 1997.
Term Commitment is defined in Section 2.1.
Term Loans is defined in Section 2.1.
Term Note means a promissory note of the Borrower payable to the order
of any Lender, substantially in the form of Exhibit A-2.
Termination Event means (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower, any of
its Subsidiaries or any ERISA Affiliate from a Benefit Plan during a plan year
in which it was a "substantial employer" (as defined in Section 4001(a)(2) of
ERISA); (iii) the providing of notice of intent to terminate a Benefit Plan in a
distress termination (as described in Section 4041(c) of ERISA); (iv) the
institution by the Pension Benefit Guaranty Corporation of proceedings to
terminate a Benefit Plan or Multiemployer Plan; (v) any event or condition (a)
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit Plan or
Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from a Multiemployer
Plan.
Total Commitments means the sum of the Commitments of all the Lenders,
which shall not exceed $125,833,333.40.
Trailers means over-the-road tractor trailers and trailers intended for
use as storage facilities not constituting portable and ISO containers owned by
the Borrower.
Trademark Security Agreements means the Confirmation and Grant of
Security Interests in Trademarks and Trademark Applications executed by the
Borrower and the Borrower's Subsidiaries in favor of the Agent pursuant to
Section 5.l(a), substantially in the form of Exhibit R.
Type means, in reference to a Revolving Loan or Term Loan, that it is a
Eurodollar Rate Loan or a Prime Rate Loan.
Unused Line Fee is defined in Section 4.3.
Working Capital means: (i) Current Assets minus (ii) Current
Liabilities.
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1.2 Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms used in this Credit Agreement shall be
construed in accordance with GAAP, applied on a basis consistent in all material
respects with the Financial Statements delivered to the Agent on or before the
Closing Date. All accounting determinations for purposes of determining
compliance with Sections 8.1 through 8.8 hereof shall be made in accordance with
GAAP as in effect on the Closing Date and applied on a basis consistent in all
material respects with the audited Financial Statements delivered to the Agent
on or before the Closing Date. The Financial Statements required to be delivered
hereunder from and after the Closing Date, and all financial records, shall be
maintained in accordance with GAAP. If GAAP shall change from the basis used in
preparing the audited Financial Statements delivered to the Agent on or before
the Closing Date, the certificates required to be delivered pursuant to Section
7.1 demonstrating compliance with the covenants contained herein shall, at the
election of the Borrower or upon the request of the Majority Lenders, include
calculations setting forth the adjustments necessary to demonstrate how the
Borrower is in compliance with the financial covenants based upon GAAP as in
effect on the Closing Date.
1.3 Other Terms; Headings. Terms used herein that are defined in the
Uniform Commercial Code in effect in the State of California (the "Code") shall
have the meanings given in the Code. Each of the words "hereof," "herein," and
"hereunder" refer to this Credit Agreement as a whole. An Event of Default shall
"continue" or be "continuing" until such Event of Default has been waived in
accordance with Section 11.11 hereof. References to Articles, Sections, Annexes,
Schedules, and Exhibits are internal references to this Credit Agreement, and to
its attachments, unless otherwise specified. The headings and the Table of
Contents are for convenience only and shall not affect the meaning or
construction of any provision of this Credit Agreement.
1.4 Prior Credit Agreement. This Credit Agreement evidences the
amendment and restatement of the Prior Credit Agreement. Upon the effectiveness
of this Credit Agreement, the Prior Credit Agreement will be superseded in its
entirety and all references to the Credit Agreement that are contained in the
Credit Documents shall be deemed to refer to this Credit Agreement, without the
need for further amendment of those Credit Documents. Notwithstanding the
foregoing, all of the Obligations outstanding under the Prior Credit Agreement
and all of the liens and security interests securing the same shall continue in
all respects. This Credit Agreement shall not be deemed to evidence a repayment
and reborrowing or novation of those Obligations. Without limiting the
foregoing, the Borrower hereby ratifies and reffirms all of its obligations
under each of the Credit Documents, including, without limitation, that certain
Borrower Security Agreement, dated as of March 28, 1996, between the Borrower
and the Agent, that certain Pledge Agreement, dated as of March 28, 1996,
between the Borrower and the Agent, that certain Confirmation and Grant of
Security Interest in Patents and Patent Applications, dated as of March 28,
1996, between the Borrower and the Agent and that certain Confirmation and Grant
of Security Interest in Trademarks and Trademark Applications, dated as of March
28, 1996, between the Borrower and the Agent, and agrees that each of the Credit
Documents shall remain in full force and effect and shall apply to the
Obligations arising under this Credit Agreement.
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ARTICLE II.
LOANS
2.1 Term Loan Facility.
(a) Amounts of Term Loans.
(i) Subject to the terms and conditions set forth in this
Agreement, on the Closing Date each Lender severally agrees to make to the
Borrower (but not thereafter), a term loan (each individually, a "Term Loan" and
collectively, the "Term Loans") in an amount not to exceed such Lender's
Proportionate Share of $5,833,333.40 (each Lender's obligation to make a Term
Loan in such amount being referred to herein as its "Term Commitment," which
obligation (and Term Commitment) shall be zero after the making of the Term
Loans on the Closing Date). The Term Loans made on the Closing Date shall be
made as Prime Rate Loans.
(ii) All Term Loans shall be made by the Lenders simultaneously
and proportionately to their respective Proportionate Shares, it being
understood that the Lenders' respective Term Commitments are several and not
joint and that no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Term Loan hereunder nor shall the
Term Commitment of any Lender be increased or decreased as a result of the
failure by any other Lender to perform its obligation to make any Term Loan
hereunder.
(iii) The Term Loans, when repaid or prepaid, whether by
voluntary or mandatory prepayment, in accordance with the terms hereof, may not
be reborrowed.
(b) Term Notes and Scheduled Term Loan Installments.
(i) The Borrower shall execute and deliver to each Lender on the
Closing Date a Term Note, in the principal amount of that Lender's Term Loan.
(ii) The Borrower shall repay the principal amount of the Term
Loans made on the Closing Date in monthly installments of $100,000 each (each a
"Scheduled Term Loan Installment" and collectively, the "Scheduled Term Loan
Installments") on the last day of each month commencing December 31, 1999. The
Term Loans shall be repaid in full on the Expiration Date and, notwithstanding
the foregoing, the Scheduled Term Loan Installment due on the Expiration Date
shall be in the amount necessary to repay the Term Loans in full.
2.2 Revolving Credit Commitments.
(a) Subject to the terms and conditions set forth in this Credit
Agreement, on and after the Closing Date and to and excluding the Expiration
Date, each Lender severally agrees to make loans and advances to the Borrower
("Revolving Loans") in an amount not to exceed at any time its Proportionate
Share of the lesser of (x) the total Revolving Credit Commitments (which shall
not exceed $120,000,000) or (y) the Borrowing Base, minus, in each case, the
then outstanding Letter of Credit Obligations.
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(b) The Agent may, but shall not be obligated to, rely on each
Borrowing Base Certificate and any other schedules or reports in determining the
eligibility of Accounts and Inventory. The Agent, in the exercise of its
Permitted Discretion, may (i) establish and increase or decrease reserves
against Eligible Accounts Receivable and Eligible Inventory, (ii) reduce the
advance rates provided for in this definition, or restore such advance rates to
any level equal to or below the advance rates in effect as of the date of this
Credit Agreement, and (iii) impose additional restrictions (or eliminate the
same) to the standards of eligibility set forth in the definitions of "Eligible
Accounts Receivable," "Eligible Goods Inventory," "Eligible Raw Materials
Inventory," "Eligible Container Fleet Inventory," "Eligible Trailer Fleet
Inventory," "Eligible Work-In-Process Container Inventory," "Eligible Primary
Raw Materials Inventory," and "Eligible Other Raw Materials Component
Inventory."
2.3 Borrowing of Revolving Loans. It is contemplated that Revolving Loans
will be made available to the Borrower directly by the Lenders ("Lender
Advances") and, in the circumstances described in Section 2.3(b), from the Agent
acting on behalf of the Lenders ("Agent Advances").
(a) Lender Advances of Revolving Loans. Subject to the determination by
the Agent and the Lenders that the conditions for borrowing contained in Section
5.2 are satisfied, upon notice from the Borrower to the Agent ("Notice of
Borrowing"), Lender Advances of Revolving Loans shall be made to the extent of
each Lender's Proportionate Share of the requested Borrowing. The Notice of
Borrowing shall specify whether the requested Borrowing is of Prime Rate Loans
or Eurodollar Rate Loans.
(b) Agent Advances of Revolving Loans. The Agent is authorized by the
Lenders, but is not obligated, to make Agent Advances (x) upon a Notice of
Borrowing received by the Agent before 1:00 P.M. New York time on a Business
Day, or (y) upon advice received by the Agent on a Business Day from the
Disbursement Account Bank of the face amount of checks drawn on the Disbursement
Account, which have been or will be presented for payment on that day, minus the
amount of funds then available in the Disbursement Account. All Agent Advances
shall be Prime Rate Loans. Except during the period set forth in Section
2.3(b)(ii), Agent Advances will not at any time exceed the amount available for
borrowing under Section 2.2(a). Agent Advances will be subject to periodic
settlement with the Lenders under Section 2.5. Agent Advances may be made only
in the following circumstances:
(i) For administrative convenience, the Agent may, but is not
obligated to, make Agent Advances in reliance upon the Borrower's actual or
deemed representations under Section 5.2 that the conditions for borrowing are
satisfied.
(ii) If the conditions for borrowing under Section 5.2 cannot be
fulfilled, the Borrower shall in its Notice of Borrowing or otherwise give
immediate notice thereof to the Agent, with a copy to each of the Lenders, and
the Agent may, but is not obligated to, continue to make Agent Advances for
twenty (20) Business Days from the date the Agent first receives such notice, or
until sooner instructed by the Majority Lenders to cease. The Agent is
authorized to make Agent Advances under this subsection (ii) up to the amount
that would otherwise be available for borrowing under Section 2.2(a) plus
$2,000,000. Once notice is given
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with respect to an event causing the conditions not to be fulfilled, no
additional notice with respect to that event will be effective to commence a new
period under this Section 2.3(b)(ii). All Agent Advances made pursuant to this
clause (ii) shall be due and payable within one (1) Business Day of demand.
(c) Disbursement of Revolving Loans. The proceeds of Revolving Loans
shall be transmitted by the Agent, in the circumstances described in Section
3.5, directly to the Issuing Bank and, in all other circumstances, as requested
by the Borrower in its Notice of Borrowing.
(d) Notices of Borrowing. Notices of Borrowing may be given under this
Section by telephone or facsimile transmission, and, if by telephone, promptly
confirmed in writing substantially in the form of Exhibit F. The Borrower shall
specify in each Notice of Borrowing whether the conditions for the requested
borrowing are satisfied. The Borrower may request one or more Borrowings of
Prime Rate Loans on the same Business Day. Notice of Borrowing for Eurodollar
Rate Loans shall be given not later than 1:00 P.M. New York time on the third
Business Day prior to the proposed Borrowing. Each Notice of Borrowing shall,
unless otherwise specifically provided herein, consist entirely of Revolving
Loans of the same Type and, if such Borrowing is to consist of Eurodollar Rate
Loans, shall be in an aggregate amount for all Lenders of not less than
$2,000,000 or an integral multiple of $100,000 in excess thereof. The right of
the Borrower to choose Eurodollar Rate Loans is subject to the provisions of
Section 4.13. Once given, a Notice of Borrowing that requests a Lender Advance
is irrevocable by and binding on the Borrower. The Borrower shall provide to the
Agent a list, with specimen signatures, of officers authorized to request
Revolving Loans. The Agent is entitled to rely upon such list until it is
replaced by the Borrower.
2.4 Same Day Settlement of Lender Advances. The Agent shall give each
Lender prompt notice by telephone or facsimile transmission of a Notice of
Borrowing that requests Lender Advances of Revolving Loans. No later than 2:00
P.M. New York time on the date of receipt of the Notice of Borrowing, each
Lender shall make available to the Agent at the Agent's address its
Proportionate Share of such Borrowing in immediately available funds. Unless the
Agent receives contrary written notice prior to the date of any such Borrowing
of Revolving Loans, it is entitled to assume that each Lender will make
available its Proportionate Share of the Borrowing and in reliance upon that
assumption, but without any obligation to do so, may advance such Proportionate
Share on behalf of the Lender.
2.5 Periodic Settlement of Agent Advances and Repayments.
(a) The Settlement Date. The amount of each Lender's Proportionate
Share of Revolving Loans shall be computed weekly (or more frequently in the
Agent's discretion) and shall be adjusted upward or downward based on all
Revolving Loans (including Agent Advances) and repayments received by the Agent
as of 5:00 P.M. New York time on the last Business Day of the period specified
by the Agent (such date, the "Settlement Date").
(b) Summary Statements; Settlements of Principal. The Agent shall
deliver to each of the Lenders promptly after the Settlement Date a summary
statement of the amount of outstanding Revolving Loans (including Agent
Advances) for the period and the amount of
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repayments received for the period. As reflected on the summary statement: (i)
the Agent shall transfer to each Lender its Proportionate Share of repayments;
and (ii) each Lender shall transfer to the Agent, or the Agent shall transfer to
each Lender, such amounts as are necessary to insure that, after giving effect
to all such transfers, the amount of Revolving Loans made by each Lender shall
be equal to such Lender's Proportionate Share of the aggregate amount of
Revolving Loans outstanding as of such Settlement Date. If the summary statement
requires transfers to be made to the Agent by the Lenders and is received prior
to 12:00 noon New York time on a Business Day, such transfers shall be made in
immediately available funds no later than 3:00 P.M. New York time that day; and,
if received after 12:00 noon New York time, then no later than 3:00 P.M. New
York time on the next Business Day. The obligation of each Lender to transfer
such funds is irrevocable, unconditional and without recourse to or warranty by
the Agent.
(c) Distribution of Interest and Unused Line Fees. Interest on the
Loans (including Agent Advances) together with the amount of the Unused Line
Fee, shall be allocated by the Agent to each Lender in accordance with the
Proportionate Share of Loans actually advanced by and repaid to each Lender, and
shall accrue from and including the date such Loans are so advanced and to but
excluding the date such Loans are either repaid by the Borrower or actually
settled under this Section. Promptly after the end of each month, the Agent
shall distribute to each Lender its Proportionate Share of the interest and
Unused Line Fee accrued during that month. The Agent shall distribute interest
on Eurodollar Rate Loans promptly after it is received.
2.6 Sharing of Payments. If any Lender obtains any payment on account of
the Loans or Letter of Credit Obligations in excess of its Proportionate Share
of such payments, it will immediately purchase from the other Lenders portions
of their Loans and Letter of Credit participations sufficient to cause that
Lender to share the excess payment ratably with all the other Lenders.
2.7 Defaulting Lenders.
(a) A Lender who fails to pay the Agent its Proportionate Share of any
Revolving Loans (including Agent Advances) made available by the Agent on such
Lender's behalf, or who fails to pay any other amount owing by it to the Agent,
is a "Defaulting Lender." The Agent may recover all such amounts owing by a
Defaulting Lender on demand. If the Defaulting Lender does not pay such amounts
on the Agent's demand, the Agent shall promptly notify the Borrower and the
Borrower shall pay such amounts within five Business Days. In addition, the
Defaulting Lender or the Borrower shall pay the Agent interest on such amount
for each day from the date it was made available by the Agent to the Borrower to
the date it is recovered by the Agent at a rate per annum equal to (x) the
overnight Federal funds rate, if paid by the Defaulting Lender, or (y) the then
applicable rate of interest calculated under Section 4.1, if paid by the
Borrower; plus, in each case, the Expenses and losses, if any, incurred as a
result of the Defaulting Lender's failure to perform its obligations.
(b) The failure of any Lender to fund its Proportionate Share of any
Revolving Loan (including Agent Advances) shall not relieve any other Lender of
its obligation to fund its
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Proportionate Share of such Revolving Loan. Conversely, no Lender shall be
responsible for the failure of another Lender to fund its Proportionate Share of
a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a Defaulting Lender
any payments made by the Borrower to the Agent for the Defaulting Lender's
benefit; nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder. Amounts payable to a Defaulting Lender shall instead be paid
to or retained by the Agent. The Agent may hold and, in its discretion, re-lend
to the Borrower the amount of all such payments received or retained by it for
the account of such Defaulting Lender. For purposes of voting or consenting to
matters with respect to the Credit Documents and determining Proportionate
Shares, such Defaulting Lender shall be deemed not to be a "Lender" and such
Lender's Commitment shall be deemed to be zero (-0-). This Section shall remain
effective with respect to such Lender until (x) the Obligations under this
Credit Agreement shall have been declared or shall have become immediately due
and payable or (y) the Majority Lenders, the Agent and the Borrower shall have
waived such Lender's default in writing. The operation of this Section shall not
be construed to increase or otherwise affect the Term Commitment or Revolving
Credit Commitment of any Lender, or relieve or excuse the performance by the
Borrower of its duties and obligations hereunder.
ARTICLE III.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit. Subject to the terms and conditions
hereunder and in reliance on the representations and warranties of the Borrower
set forth herein, the Agent may from time to time cause the Issuing Bank to
issue Letters of Credit hereunder at the request of the Borrower and for its
account, as more specifically described below. The Agent shall not be obligated
to cause the Issuing Bank to issue any Letter of Credit if:
(a) Issuance of the requested Letter of Credit (i) would cause the
Letter of Credit Obligations then outstanding to exceed $2,000,000 or (ii) would
cause the sum of the Revolving Loans plus the Letter of Credit Obligations then
outstanding to exceed the lesser of (x) the Revolving Credit Commitments then in
effect or (y) the Borrowing Base then in effect; or
(b) Issuance of the Letter of Credit is enjoined, restrained or
prohibited by any Governmental Authority, Requirement of Law or any request or
directive of any Governmental Authority (whether or not having the force of law)
or would impose upon the Agent or the Issuing Bank any material restriction,
reserve, capital requirement, loss, cost or expense (for which the Agent or the
Issuing Bank is not otherwise compensated) not in effect or known as of the
Closing Date.
3.2 Terms of Letters of Credit. The proposed amount, terms and conditions,
and form of each Letter of Credit (and of any drafts or acceptances thereunder)
shall be subject to approval by the Issuing Bank. The term of each Letter of
Credit shall not exceed 360 days, but may be subject to annual renewal, and in
any event shall have an expiry date not later than five (5) Business Days prior
to the Expiration Date.
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3.3 Request for Issuance. A request for issuance of a Letter of Credit in
the form of Exhibit K (a "Letter of Credit Request") may be given in writing or
electronically by any officer authorized by the Borrower under Section 2.3(d)
and, if requested by the Agent, promptly confirmed in writing. A Letter of
Credit Request must be received by the Agent no later than 1:00 P.M. New York
time at least five (5) Business Days (or such shorter period as may be agreed to
by the Issuing Bank) in advance of the proposed date of issuance.
3.4 Lenders' Participation. Immediately upon issuance or amendment of any
Letter of Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest and participation in all rights and
obligations under such Letter of Credit (other than fees and other amounts owing
to the Issuing Bank) in accordance with such Lender's Proportionate Share.
3.5 Payment of Amounts Drawn Under Letters of Credit. Upon notice from the
Issuing Bank of any drawing under any Letter of Credit, the Agent shall notify
the Borrower of such drawing promptly on the Business Day immediately prior to
the date on which the Issuing Bank intends to honor such drawing. The Borrower
will be deemed to have concurrently given a Notice of Borrowing to the Agent for
Revolving Loans in the amount of and at the time of such drawing. The proceeds
of such Revolving Loans shall be applied directly by the Agent to reimburse the
Issuing Bank for the amount of such drawing.
3.6 Payment by Lenders. If Revolving Loans are not made in an amount
sufficient to reimburse the Issuing Bank in full for the amount of any draw, the
Agent shall promptly notify each Lender of the unreimbursed amount of such
drawing and of such Lender's respective participation therein. Each Lender shall
make available to the Agent, for the account of the Issuing Bank, the amount of
its participation in immediately available funds not later than 1:00 P.M. New
York time on the next Business Day. If any Lender fails to make available to the
Agent the amount of such Lender's participation, the Issuing Bank shall be
entitled to recover such amount on demand from such Lender together with
interest at the Federal Funds Rate for the first three Business Days and
thereafter at the Prime Lending Rate. For each Letter of Credit, the Agent shall
promptly distribute to each Lender which has funded the amount of its
participation its Proportionate Share of all payments subsequently received by
the Agent from the Borrower in reimbursement of honored drawings.
3.7 Nature of Issuing Bank's Duties. In determining whether to pay under
any Letter of Credit, the Issuing Bank shall be responsible only to determine
that the documents and certificates required to be delivered under that Letter
of Credit have been delivered and that they comply on their face with the
requirements of that Letter of Credit. As among the Borrower, the Issuing Bank
and each other Lender, the Borrower assumes all risks of the acts and omissions
of the Issuing Bank, or misuse of the Letters of Credit by the respective
beneficiaries of such Letters of Credit. Any action taken or omitted to be taken
by the Issuing Bank under or in connection with any Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
create for the Issuing Bank any liability to the Borrower, the Agent or any
Lender.
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3.8 Obligations Absolute. The obligations of the Borrower to reimburse the
Issuing Bank for drawings honored under the Letters of Credit and the
obligations of the Lenders under Section 3.6 hereof shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Credit Agreement under all circumstances.
3.9 Agent's Execution of Applications and Other Issuing Bank Documentation;
Reliance on Credit Agreement by Issuing Bank. The Agent shall be authorized to
execute, deliver and perform on behalf of the Lenders such letter of credit
applications, shipping indemnities, letter of credit modifications and consents
and other undertakings for the benefit of the Issuing Bank as may be reasonably
necessary or appropriate in connection with the issuance or modification of
Letters of Credit requested by the Borrower hereunder. The Lenders, the Agent
and the Borrower all expressly agree that the terms of this Article 3 and
various other provisions of this Credit Agreement identifying the Issuing Bank
are also intended to benefit the Issuing Bank and the Issuing Bank shall be
entitled to enforce the provisions hereof which are for its benefit.
3.10 Additional Payments. If by reason of (a) any change in any Requirement
of Law or any change in the interpretation or application by any Governmental
Authority of any Requirement of Law or (b) compliance by the Issuing Bank or any
Lender with any direction, request or requirement (whether or not having the
force of law) of any Governmental Authority or monetary authority including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect (and any successor thereto):
(i) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letters of Credit issued by
the Issuing Bank or participations therein purchased by any Lender; or
(ii) there shall be imposed on the Issuing Bank or any Lender any other
condition regarding this Section 3.10, any Letter of Credit or any participation
therein;
and the result of the foregoing is to directly or indirectly increase the cost
to the Issuing Bank or any Lender of issuing, making or maintaining any Letter
of Credit or of purchasing or maintaining any participation therein, or to
reduce the amount receivable in respect thereof by such Issuing Bank or any
Lender, then, and in any such case, the Issuing Bank or such Lender may, at any
time within a reasonable period after the additional cost is incurred or the
amount received is reduced, notify the Borrower, and the Borrower shall pay on
demand such amounts as the Issuing Bank or such Lender may specify to be
necessary to compensate the Issuing Bank or such Lender for such additional cost
or reduced receipt, together with interest on such amount from 10 days after the
date of such demand until payment in full thereof at a rate equal at all times
to the Prime Lending Rate per annum. The determination by the Issuing Bank or
any Lender, as the case may be, of any amount due pursuant to this Section,
shall be set forth in a certificate delivered to the Borrower, setting forth the
calculation of any amounts due pursuant to this Section in reasonable detail.
3.11 Replacement of Lender. If the Borrower receives a notice pursuant to
Section 3.10, so long as no Default or Event of Default shall have occurred and
be continuing and the Borrower has obtained a commitment from another Lender or
other financial institution,
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acceptable to the Agent in its reasonable discretion, to become a Lender for all
purposes under this Credit Agreement and to assume all obligations of the Lender
to be replaced, the Borrower may require the Lender giving such notice to assign
all of its Loans, Commitments and other Obligations to such other Lender or
financial institution pursuant to the provisions of Section 11.8(b); provided
that, prior to or concurrently with such replacement (i) the 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, (ii) the Agent
has received the processing and recordation fee required to be paid by Section
11.8(b), and (iii) all of the requirements for such assignment contained in
Section 11.8(b), including, without limitation, the receipt by the Agent of an
executed Assignment and Assumption Agreement and other supporting documents,
have been fulfilled.
ARTICLE IV.
COMPENSATION, REPAYMENT AND REDUCTION OF COMMITMENTS
4.1 Interest on Prime Rate Loans. The Borrower shall be obligated to pay to
the Lenders on the first Business Day of each month interest on the Prime Rate
Loans, calculated monthly in arrears at an interest rate per annum equal to the
Prime Lending Rate plus (i) with respect to Revolving Loans consisting of Prime
Rate Loans the following basis points, relative to the Debt Ratio in effect, as
set forth below:
DEBT RATIO AS DEFINED IN SECTION 8.6 PRIME INTEREST RATE PLUS
> 5.0 75 Basis Points (0.75%)
-
> 4.5 but < 5.0 50 Basis Points (0.50%)
-
> 4.0 but < 4.5 25 Basis Points (0.25%)
-
< 4.0 Zero Basis Points (0.0%)
(ii) with respect to Term Loans consisting of Prime Rate Loans the
following basis points relative to the Debt Ratio in effect, as set forth below.
DEBT RATIO AS DEFINED IN SECTION 8.6 PRIME INTEREST RATE PLUS
> 5.0 100 Basis Points (1.00%)
-
> 4.5 but < 5.0 75 Basis Points (0.75%)
-
> 4.0 but < 4.5 50 Basis Points (0.50%)
-
< 4.0 25 Basis Points (0.25%)
4.2 Interest on Eurodollar Rate Loans. Interest on Eurodollar Rate
Loans shall be payable on the last day of each Interest Period with respect to
such Eurodollar Rate Loans (and, in the case of any Eurodollar Rate Loan with an
Interest Period of six months, on the three-month
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anniversary of the commencement of that Interest Period), at the date of
conversion of such Eurodollar Rate Loans (or a portion thereof) to a Prime Rate
Loan and at maturity of such Eurodollar Rate Loans at an interest rate per annum
equal during the Interest Period for such Eurodollar Rate Loans to the Adjusted
Eurodollar Rate for the Interest Period in effect for such Eurodollar Rate Loans
plus (i) with respect to Revolving Loans consisting of Eurodollar Rate Loans the
following basis points, relative to the Debt Ratio in effect, as set forth
below:
DEBT RATIO AS DEFINED EURODOLLAR RATE
IN SECTION 8.6 (ADJUSTED EURODOLLAR RATE PLUS)
> 5.0 Two Hundred Fifty Basis Points (2.5%)
-
> 4.5 but < 5.0 Two Hundred Basis Points (2.0%)
-
> 4.0 but < 4.5 One Hundred Seventy-Five Basis Points (1.75%)
-
> 3.5 but < 4.0 One Hundred Fifty Basis Points (1.50%)
-
< 3.5 One Hundred Twenty-Five Basis Points (1.25%)
(ii) with respect to Term Loans consisting of Eurodollar Rates Loans
the following basis points, relative to the Debt Ratio, as set forth below:
DEBT RATIO AS DEFINED EURODOLLAR RATE
IN SECTION 8.6 (ADJUSTED EURODOLLAR RATE PLUS)
> 5.0 Two Hundred Seventy-Five Basis Points (2.75%)
-
> 4.5 but < 5.0 Two Hundred Twenty-Five Basis Points (2.25%)
-
> 4.0 but < 4.5 Two Hundred Basis Points (2.00%)
-
> 3.5 but < 4.0 One Hundred Seventy-Five Basis Points (1.75%)
-
< 3.5 One Hundred Fifty Basis Points (1.50%)
The Agent upon determining the Adjusted Eurodollar Rate for any
Interest Period shall promptly notify the Borrower and the Lenders by telephone
(confirmed promptly in writing) or in writing thereof.
4.3 Unused Line Fee. The Borrower shall be obligated to pay to the
Lenders on the first Business Day of each month and on the Expiration Date a fee
equal to (0.375%) per annum calculated monthly in arrears on the average unused
portion of the Total Commitments at the close of business each day during such
month or occurring prior to the Expiration Date (the "Unused Line Fee").
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4.4 Letter of Credit Fees.
(a) The Borrower shall be obligated to pay to the Lenders on
the first Business Day of each month a fee (the "Letter of Credit Fee"), in an
amount equal to the Letter of Credit Fee listed on the chart below that
corresponds to the Debt Ratio in effect, per annum of the daily weighted average
amount of Letter of Credit Obligations relating to Letters of Credit outstanding
during the immediately preceding month.
DEBT RATIO AS DEFINED IN SECTION 8.6 LETTER OF CREDIT FEES
> 5.0 2.50% per annum
-
> 4.5 but < 5.0 2.00% per annum
-
> 4.0 but < 4.5 1.75% per annum
-
> 3.5 but < 4.0 1.50% per annum
-
< 3.5 1.25% per annum
Notwithstanding the foregoing, Letter of Credit Fees on Letter of Credit
Obligations outstanding after the occurrence and during the continuance of an
Event of Default shall be payable on demand at a rate equal to the rate at which
the Letter of Credit Fees are charged pursuant to the first sentence of this
Section 4.4(a), plus two (2) percentage points (200 basis points).
(b) The Borrower shall also pay the customary charges, fees and
expenses of Deutsche Bank for the issuance, administration and negotiation of
each Letter of Credit (if Deutsche Bank is the Issuing Bank), and the Agent
shall be entitled to charge to the Loan Account such fees, charges and expenses
of the Issuing Bank as and when incurred by the Agent or any Lender (in each
case, the "Issuing Bank Fees").
4.5 Interest After Event of Default. From the date of occurrence of an
Event of Default until the earlier of (i) the date all Obligations have been
paid and satisfied in full or (ii) the date such Event of Default is waived, the
Borrower shall be obligated to pay to the Lenders interest on the Loans and on
the Letter of Credit Obligations calculated at rates per annum equal to the
rates in effect under Sections 4.1, 4.2 and 4.4 plus in each case two (2)
percentage points (200 basis points).
4.6 Expenses; Fees. The Borrower shall be obligated to reimburse the
Agent's Expenses promptly upon demand and to pay any Fees due and payable on or
prior to the Closing Date.
4.7 Mandatory Payment; Reduction of Commitments; Voluntary Prepayments.
(a) Mandatory Payment. Except during the period described in Section
2.3(b)(ii), the aggregate balance of Revolving Loans and all Letter of Credit
Obligations
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outstanding at any time in excess of the Borrowing Base then in effect shall be
immediately due and payable without the necessity of any demand.
(b) [Intentionally deleted]
(c) Reduction of Commitments. On the Expiration Date, the Commitment of
each Lender shall automatically reduce to zero and may not be reinstated. The
Borrower may reduce or terminate the Commitments at any time and from time to
time in whole or in part. Each such reduction must be in an aggregate amount for
all the Lenders of not less than $5,000,000 (and in increments of $1,000,000
thereafter). If the Borrower seeks to reduce Commitments to an aggregate amount
less than $1,000,000, then the Commitments shall be reduced to zero and this
Credit Agreement shall be terminated. Once reduced, no portion of the
Commitments may be reinstated.
(d) Voluntary Prepayments. The Borrower may prepay Term Loans at any
time, in whole or in part, without penalty or premium (subject to Section
4.13(d)), which prepayments shall be applied to the Scheduled Term Loan
Installments in inverse order of maturity. The Borrower may prepay Revolving
Loans, without penalty or premium, subject to the concurrent reduction of the
Commitments pursuant to and in compliance with Section 4.7(c), and subject to
Section 4.13(d).
4.8 Maintenance of Loan Account; Statements of Account. The Agent shall
maintain an account on its books in the name of the Borrower (the "Loan
Account") in which the Borrower will be charged with all loans and advances made
by the Lenders to the Borrower or for the Borrower's account, including the Term
Loans, the Revolving Loans, and all Letter of Credit Obligations, the Fees, the
Expenses and any other Obligations. The Loan Account will be credited with all
payments received by the Agent from the Borrower or for the Borrower's account,
including all amounts received in the Concentration Account from any Lockbox
Bank or Blocked Account Bank. The Agent shall send the Borrower a monthly
statement reflecting the activity in the Loan Account.
4.9 Payment Procedures. The Borrower hereby authorizes the Agent to charge
the Loan Account with the amount of all interest, Fees and Expenses and other
payments to be made hereunder and under the other Credit Documents. The
Borrower's obligations to the Agent and the Lenders with respect to such
payments shall be discharged by the Agent's charging the Loan Account as
provided herein.
4.10 Collection of Accounts. The Borrower shall at all times maintain
lockboxes (the "Lockboxes") and blocked deposit accounts (the "Blocked
Accounts") and shall instruct all account debtors on the Accounts of the
Borrower to remit all Collections to such Lockboxes, except for Collections
consisting of payments made by wire transfer or transmitted by the automated
clearing house system, with respect to which the account debtors shall be
instructed to send such payments to an account (the "Concentration Account")
maintained by the Agent at Deutsche Bank. All other payments received by the
Borrower shall be deposited in Blocked Accounts. The Borrower, the Agent and
financial institutions selected by the Borrower and acceptable to the Agent (the
"Lockbox Banks" and the "Blocked Account Banks" as the case may
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be) shall enter into agreements substantially in the form of Exhibit C-1 (the
"Lockbox Agreements") or Exhibit C-2 (the "Blocked Account Agreements"), as the
case may be. Termination of such arrangements shall also be subject to approval
by the Agent. Upon the terms and subject to the conditions set forth in the
Lockbox Agreements or a Blocked Account Agreements, as the case may be, all
available amounts held in each Lockbox and Blocked Account shall be sent by wire
transfer or automated clearing house system each Business Day to the
Concentration Account.
4.11 Application of Payments. All amounts received in the Concentration
Account from third parties, the Lockbox Banks and the Blocked Account Banks
shall be credited to the Loan Account and applied to amounts due under Section
4.9 and then to the outstanding Revolving Loans. Amounts applied to the
Revolving Loans shall be credited first to Prime Rate Loans and provided no
Default or Event of Default exists, any amount in excess thereof shall be
deposited at the end of a Business Day in an interest-bearing account at
Deutsche Bank in the name of, and under the control of, the Agent, with any
interest earned for the benefit of the Borrower. Any funds in such interest
bearing account will be applied to the Revolving Loans on the next Business Day.
If any amounts collected exceed the Revolving Loans outstanding, and any other
amounts then due hereunder, it shall be disbursed to the Disbursement Account or
as otherwise directed by the Borrower. Except as provided in Section 9.7, after
the occurrence of an Event of Default, and until it is waived, all amounts
received by the Agent from the Lockbox Banks and the Blocked Account Banks, from
liquidation of Collateral or otherwise, shall be applied in the following order:
first, to the payment of any Fees, Expenses or other Obligations due and payable
to the Agent under any of the Credit Documents, including Agent Advances and any
other amounts advanced by the Agent on behalf of the Lenders; second, to the
payment of any Fees, expenses or other Obligations due and payable to the
Issuing Bank under any of the Credit Documents; third, to the ratable payment of
any Fees, Expenses or other Obligations due and payable to the Lenders under any
of the Credit Documents other than those Obligations specifically referred to in
this Section; fourth, to the ratable payment of interest due on the Loans; and,
fifth, to the ratable payment of principal due on the Loans.
4.12 Calculations. All calculations of (i) interest hereunder and (ii)
Fees, including, without limitation, Unused Line Fees and Letter of Credit Fees,
shall be made by the Agent, on the basis of a year of 360 days for the actual
number of days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest or Fees are payable.
4.13 Special Provisions Relating to Eurodollar Rate Loans.
(a) Continuation. With respect to any Borrowing consisting of
Eurodollar Rate Loans, the Borrower may (so long as no Default or Event of
Default has occurred and is continuing), subject to the provisions of Section
4.13(c), elect to maintain such Borrowing or any portion thereof as consisting
of Eurodollar Rate Loans by selecting a new Interest Period for such Borrowing,
which new Interest Period shall commence on the last day of the immediately
preceding Interest Period. Each selection of a new Interest Period shall be made
by notice given not later than 1:00 P.M. New York time on the third Business Day
prior to the date of any such continuation relating to Eurodollar Rate Loans, by
the Borrower to the Agent. Such notice by the Borrower of a continuation (a
"Notice of Continuation") shall be by telephone or facsimile
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transmission, and if by telephone, promptly confirmed in writing substantially
in the form of Exhibit I, in each case specifying (i) the date of such
continuation, (ii) the Type of Loans (including whether Revolving Loans or Term
Loans) subject to such continuation, (iii) the aggregate amount of Loans subject
to such continuation and (iv) the duration of the selected Interest Period. The
Borrower may elect to maintain more than one Borrowing consisting of Eurodollar
Rate Loans by combining such Borrowings into one Borrowing and selecting a new
Interest Period pursuant to this Section 4.13(a); provided, however, that each
of the Borrowings so combined shall consist of Revolving Loans or Term Loans
having Interest Periods all then ending on the same date. If the Borrower shall
fail to select a new Interest Period for any Borrowing consisting of Eurodollar
Rate Loans in accordance with this Section 4.13(a), such Revolving Loans or Term
Loans will automatically, on the last day of the then existing Interest Period
therefore, convert into Prime Rate Loans. The Agent shall give each Lender
prompt notice by telephone or facsimile transmission of each Notice of
Continuation.
(b) Conversion. The Borrower may on any Business Day (so long as no
Default or Event of Default has occurred and is continuing), upon notice (each
such notice, a "Notice of Conversion") given to the Agent, and subject to the
provisions of Section 4.13(c), convert the entire amount of or a portion of all
Loans of one Type comprising the same Borrowing into Loans of another Type;
provided, however, that any conversion of any Eurodollar Rate Loans into Loans
of another Type shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Rate Loans and, upon conversion of any Prime Rate
Loans into Loans of another Type, the Borrower shall pay accrued interest to the
date of conversion on the principal amount converted. Each such Notice of
Conversion shall be given not later than 1:00 P.M. New York time on the Business
Day prior to the date of any proposed conversion into Prime Rate Loans and on
the third Business Day prior to the date of any proposed conversion into
Eurodollar Rate Loans. Subject to the restrictions specified above, each Notice
of Conversion shall be by telephone or facsimile transmission, and if by
telephone, promptly confirmed in writing substantially in the form of Exhibit J,
in each case specifying (i) the requested date of such conversion, (ii) the Type
of Loans (including whether Revolving Loans or Term Loans) to be converted,
(iii) the portion of such Type of Loan to be converted, (iv) the Type of Loan
such Loans are to be converted into and (v) if such conversion is into
Eurodollar Rate Loans, the duration of the Interest Period of such Loan. Each
conversion shall be in an aggregate amount for the Loans of all Lenders of not
less than $2,000,000 or an integral multiple of $ 100,000 in excess thereof. The
Borrower may elect to convert the entire amount of or a portion of all Loans of
one Type comprising more than one Borrowing into Loans of another Type by
combining such Borrowings into one Borrowing consisting of Revolving Loans or
Term Loans of another Type; provided, however, that if the Borrowings so
combined consist of Eurodollar Rate Loans, such Loans shall have Interest
Periods all then ending on the same date.
(c) Certain Limitations on Eurodollar Rate Loans. The right of the
Borrower to maintain, select, continue or convert Eurodollar Rate Loans shall be
limited as follows:
(i) If the Agent is advised by Deutsche Bank that it is not
offering U.S. dollar deposits (in the applicable amounts) in the London
interbank market, or the Agent determines that adequate and fair means do not
otherwise exist for ascertaining the Eurodollar Rate for Eurodollar Rate Loans
comprising any requested Borrowing, continuation or conversion,
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40
the right of the Borrower to select or maintain Eurodollar Rate Loans for such
Borrowing or any subsequent Borrowing shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exists, and each Loan comprising such Borrowing shall be
made as a Prime Rate Loan.
(ii) If the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, continuation or conversion, notify
the Agent that the Eurodollar Rate for Loans comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or funding their
respective Loans for such Borrowing, then the right of the Borrower to select
Eurodollar Rate Loans for such Borrowing shall be suspended until the Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Loan comprising such Borrowing shall be
made as a Prime Rate Loan.
(iii) If at any time any Lender reasonably determines
that the making, continuation or conversion of any Loan as a Eurodollar Rate
Loan has become unlawful or impermissible by reason of compliance by that Lender
with any law, governmental rule, regulation or order of any Governmental
Authority (whether or not having the force of law or would result in costs or
penalties), then, and in any such event, such Lender may give notice of that
determination in writing, to the Borrower and the Agent and the Agent shall
promptly transmit the notice to each other Lender. Until such Lender gives
notice otherwise, the right of the Borrower to select Eurodollar Rate Loans from
that Lender shall be suspended and each Eurodollar Rate Loan outstanding from
that Lender shall automatically and immediately convert to a Prime Rate Loan;
provided, that if the Borrower receives a notice pursuant to this subsection
(iii), so long as no Default or Event of Default shall have occurred and be
continuing and the Borrower has obtained a commitment from another Lender or
other financial institution, acceptable to the Agent in its reasonable
discretion, to become a Lender for all purposes under this Credit Agreement and
to assume all obligations of the Lender to be replaced, the Borrower may require
the Lender giving such notice to assign all of its Loans, Commitments and other
Obligations to such other Lender or financial institution pursuant to the
provisions of Section 11.8(b); provided further that, prior to or concurrently
with such replacement (i) the 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, (ii) the Agent has received the processing and
recordation fee required to be paid by Section 11.8(b), and (iii) all of the
requirements for such assignment contained in Section 11.8(b), including,
without limitation, the receipt by the Agent of an executed Assignment and
Assumption Agreement and other supporting documents, have been fulfilled.
(iv) [intentionally omitted]
(v) There shall not be outstanding at any one time more than an
aggregate of four (4) Borrowings of Loans which consist of Eurodollar Rate
Loans.
(vi) No Agent Advance shall be made as a Eurodollar
Rate Loan.
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(d) Compensation.
(i) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on the Borrower. In the case of any Borrowing,
continuation or conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of Eurodollar
Rate Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill, on or
before the date for such Borrowing, continuation or conversion specified in such
Notice of Borrowing, Notice of Continuation or Notice of Conversion, the
applicable conditions set forth in Article 5, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund the Loan to be made by such Lender as part of such Borrowing,
continuation or conversion.
(ii) If any payment of principal of, or conversion or continuation of,
any Eurodollar Rate Loan is made other than on the last day of the Interest
Period for such Loan as a result of a payment, prepayment, conversion or
continuation of such Loan or acceleration of the maturity of the Revolving Notes
or Term Notes pursuant to Article 9 hereof or for any other reason, the Borrower
shall, upon demand by any Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Loan.
(iii) Calculation of all amounts payable to a Lender under this Section
4.13(d) shall be made as though such Lender elected to fund all Eurodollar Rate
Loans by purchasing U.S. dollar deposits in its Eurodollar Lending Office's
interbank eurodollar market.
4.14 Indemnification in Certain Events. If after the Closing Date,
either (i) any change in or in the interpretation of any law or regulation is
introduced, including, without limitation, with respect to reserve requirements,
applicable to the Agent, to any of the Lenders, or to Deutsche Bank or any other
banking or financial institution from whom any of the Lenders borrows funds or
obtains credit (a "Funding Bank"), or (ii) the Agent, a Funding Bank or any of
the Lenders complies with any future guideline or request from any central bank
or other Governmental Authority, or (iii) the Agent, a Funding Bank or any of
the Lenders determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or the
Agent, a Funding Bank or any of the Lenders complies with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, and in the case of any
event set forth in this clause (iii), such adoption, change or compliance has or
would have the direct or indirect effect of reducing the rate of return on any
of the Lenders' capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such adoption, change
or compliance (taking into consideration the Agent's or
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42
such Funding Bank's or Lender's policies as the case may be with respect to
capital adequacy) by an amount deemed by such Lender to be material, and any of
the foregoing events described in clauses (i), (ii) or (iii) increases the cost
to the Agent, the Issuing Bank or any of the Lenders of (A) funding or
maintaining the Total Commitments or (B) issuing, making or maintaining any
Letter of Credit or of purchasing or maintaining any participation therein, or
reduces the amount receivable in respect thereof by the Agent, the Issuing Bank
or any Lender, then the Borrower shall upon demand by the Agent, pay to the
Agent, for the account of each applicable Lender or, as applicable, the Issuing
Bank or a Funding Bank, additional amounts sufficient to indemnify the Lenders
against such increase in cost or reduction in amount receivable. A certificate
as to the amount of such increased cost and setting forth in reasonable detail
the calculation thereof shall be submitted to the Borrower by the Agent, or the
applicable Lender, Issuing Bank or Funding Bank, within six (6) months of any of
the foregoing events described in clauses (i), (ii) or (iii).
4.15 Net Payments.
(a) All payments by the Borrower hereunder to or for the
benefit of any Lender, the Issuing Bank or the Agent shall be made without
setoff, counterclaim or other defense. Except as provided in Section 4.15(b),
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, the Issuing Bank 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 the Borrower shall be
required by law to deduct any Covered Taxes from any sum payable hereunder to
any Lender, the Issuing Bank, 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 4.15) such Lender, the Issuing Bank, 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) the Borrower shall make such
deductions and (C) the Borrower shall pay the full amount so deducted to the
relevant taxation authority or other authority in accordance with applicable
law. The 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 the Borrower. The Borrower agrees to indemnify and hold harmless
the Lender, the Issuing Bank 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 Foreign Lender shall deliver to the Agent and the
Borrower (i) two valid, duly completed copies of IRS Form 1001 or 4224 (until
December 31, 2000) or Form W-8ECI and W-8BEN (after December 31, 2000), 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 Credit Agreement, the Term Notes or the Revolving 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"), and (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
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43
from United States backup withholding tax. Each such Foreign Lender shall also
deliver to the Agent and the Borrower two further copies of said Form 1001 or
4224 (or 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 the
Borrower and the Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower and the Agent, certifying (i) in the
case of a Form 1001 or 4224 (or W-8ECI or W-8BEN) that such Foreign Lender is
entitled to receive payments under this Credit Agreement, the Term Notes or the
Revolving 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 Closing
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.
4.16 Agreed Interest Rate. The Borrower agrees to pay an effective
contracted for rate of interest equal to the rate of interest resulting from all
interest payable as provided in the Notes, plus any additional rate of interest
resulting from the Additional Sums. The Additional Sums shall consist of all
fees, charges, goods, things in action or other sums or things of value (other
than the interest resulting from the interest provided in the Notes) paid or
payable by the Borrower, whether pursuant to this Agreement, the Notes or any
other Credit Document, that may be deemed to be interest for the purpose of any
applicable law that may limit the maximum amount of interest to be charged with
respect to the Loans or the Letters of Credit. The Additional Sums shall be
deemed to be additional interest for the purpose of any such law only.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 Conditions to Initial Loans and Letters of Credit. The obligation
of each Lender to fund its Term Loan and its Proportionate Share of the initial
Revolving Loan, and the obligation of the Agent to cause the Issuing Bank to
issue the initial Letter of Credit, is subject to the satisfaction or waiver of
the following conditions precedent:
(a) Closing Document List. The Agent and the Lenders shall
have received each of the agreements, opinions, reports, approvals, consents,
certificates and other documents set forth on the Closing Document List attached
hereto as Schedule A (the "Closing Document List").
(b) Material Adverse Change. Since December 31, 1998 (i) no
change, occurrence, event or development or event involving a prospective change
that is reasonably
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likely to have a Material Adverse Effect shall have occurred and be continuing,
or (ii) there shall not have occurred a substantial impairment of the financial
markets generally that is reasonably likely to materially and adversely affect
the transactions contemplated hereby, in each case as reasonably determined by
the Agent and each Lender in its sole discretion.
(c) Fees and Expenses. All Fees and Expenses payable on or
before the Closing Date shall have been paid.
(d) Borrowing Base. The Borrowing Base shall be appropriate,
in the Agent's reasonable discretion, for the Borrower's overall business and
working capital requirements.
(e) Existing Indebtedness. The terms and conditions of any
Indebtedness (including, without limitation, maturities, interest rates,
prepayment and redemption requirements, covenants, defaults, remedies, security
provisions and subordination provisions) of the Borrower to remain outstanding
after the date hereof shall be satisfactory to the Lenders in all respects, and
the Lenders shall be satisfied that the Borrower is not subject to any material
contractual obligations or other restrictions that would be violated by the
transactions contemplated by this Credit Agreement.
(f) Capitalization and Corporate Structure. The corporate and
capital structure of the Borrower and its Subsidiaries shall be satisfactory to
the Agent and the Lender in all respects.
(g) Opinion of Counsel. The Agent and the Lenders shall have
received originally executed copies of the opinion of the Borrower's counsel, in
form and substance satisfactory to Agent, covering such matters as shall be
reasonably requested by the Agent and the Lenders.
(h) Insurance. The Agent shall have received and approved
evidence of insurance coverage in amount and scope, and the Borrower's insurers
shall have provided endorsements in form and substance satisfactory to the Agent
naming Agent, for the benefit of the Lenders, as loss payee with respect to all
casualty coverage, with customary lender loss payable endorsement provisions,
and naming Agent, for the benefit of Lenders, as an additional insured with
respect to all liability coverage.
(i) Cash Management System. The Borrower shall have
established cash management systems with respect to its operations and those of
its Subsidiaries on terms and conditions satisfactory to Agent and consistent
with Agent's current practices.
(j) Additional Documents. The Credit Parties shall have
executed and delivered to the Agent and the Lenders all documents which the
Agent determines are reasonably necessary to consummate the transactions
contemplated hereby.
5.2 Conditions Precedent to All Revolving Loans and Letters of Credit.
The obligation of each Lender to fund its Term Loan and its Proportionate Share
of any requested Revolving Loan or of the Agent to cause the Issuing Bank to
issue any requested Letter of Credit is subject to the conditions precedent set
forth below. Each Notice of Borrowing and each Letter
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of Credit Request, and each issuance by the Borrower of a check drawn against,
or request for transfer from, the Disbursement Account shall constitute a
representation and warranty that such conditions are satisfied.
(a) All representations and warranties contained in this
Credit Agreement and the other Credit Documents shall be true and correct on and
as of the date of such Notice of Borrowing or Letter of Credit Request or
issuance of a check drawn against, or request for transfer from, the
Disbursement Account, as if then made, other than representations and warranties
that relate solely to an earlier date;
(b) No Default or Event of Default shall have occurred, or
would result from the making of the requested Loan or the issuance of the
requested Letter of Credit, which has not been waived; and
(c) No event has occurred which has had or would probably have
a Material Adverse Effect.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Credit
Agreement and to make the Term Loans and the Revolving Loans and other financial
accommodations described herein, and to induce the Issuing Bank to issue Letters
of Credit, the Borrower hereby represents and warrants to the Agent, the Lenders
and the Issuing Bank that the following are true, correct and complete. Such
representations and warranties, and all other representations and warranties
made by the Borrower in any other Credit Document, shall survive the execution
and delivery of the Credit Documents.
6.1 Organization and Qualification. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, (ii) has the power
and authority to own its properties and assets and to transact the businesses in
which it presently is, or proposes to be, engaged and (iii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where it presently is engaged in business, except where the failure to be so
qualified, authorized and in good standing would not have a Material Adverse
Effect. Schedule B, Part 6.1 lists all jurisdictions in which the Borrower and
its Subsidiaries are qualified to do business as foreign corporations as of the
Closing Date.
6.2 Authority. The Borrower and each of its Subsidiaries has the
requisite corporate power and authority to execute, deliver and perform each of
the Credit Documents to which it is a party. All corporate action of the
Borrower and its Subsidiaries necessary for the execution, delivery and
performance of any of the Credit Documents has been taken.
6.3 Enforceability. This Credit Agreement and each Credit Document is
the legal, valid and binding obligation of the Borrower or of any Subsidiary of
the Borrower which is a party thereto, enforceable in accordance with its terms,
subject to or limited by bankruptcy,
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insolvency, reorganization, arrangement, moratorium, or other similar laws
relating to or affecting the rights of creditors generally, and to general
principles of equity.
6.4 No Conflict. The execution, delivery and performance of each Credit
Document by the Borrower or any of its Subsidiaries are not in contravention of
any Requirement of Law or any Material Contract and will not, except as
contemplated herein, result in the imposition of any Liens upon any of its
properties.
6.5 Consents and Filings. As of the Closing Date, no consent,
authorization, permit or filing is required in connection with the execution,
delivery and performance of this Credit Agreement or any Credit Document, or the
continuing operations of the Borrower and its Subsidiaries, except (i) those set
forth on Schedule B, Part 6.5, (ii) those that have been obtained or made, and
(iii) filings necessary to create, perfect or retain the perfection of Liens
against the Collateral.
6.6 Government Regulation. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, the Investment
Company Act of 1940, or any other Requirement of Law that limits its ability to
incur indebtedness or its ability to consummate the transactions contemplated in
this Credit Agreement and the other Credit Documents.
6.7 Solvency. The fair saleable value of the assets of the Borrower
exceeds all its probable liabilities, including those to be incurred pursuant to
this Credit Agreement and the other Credit Documents. The Borrower (i) does not
have unreasonably small capital in relation to the business in which it is
engaged and (ii) has not incurred, and does not believe that it will incur,
after giving effect to the transactions contemplated by this Credit Agreement,
debts beyond its ability to pay as such debts become due.
6.8 Rights in Collateral; Priority of Liens. The Borrower owns all
property consisting of Collateral, free and clear of any and all Liens in favor
of third parties, other than the Liens permitted under Section 8.10 or described
in any title insurance policy obtained by the Lenders in connection with the
Loans. The security interests granted pursuant to the Credit Documents
constitute valid and enforceable first, prior and perfected Liens on the
Collateral, to the extent such Liens can be perfected by the filing of financing
statements, subject only to such Liens permitted under Section 8.10 as Liens
senior in priority to those held by the Lenders.
6.9 Financial Data. The Borrower has provided to the Agent and each of
the Lenders complete and accurate copies of annual audited Financial Statements
for the fiscal years ended on December 31 in 1992, 1993, 1994, 1995, 1996, 1997
and 1998 together with any Auditor's opinion and "Management Letter" (if issued)
relating thereto, and unaudited Financial Statements for the fiscal quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999 and the month ended
October 31, 1999. Such Financial Statements have been prepared in accordance
with GAAP consistently applied throughout the periods involved and, in all
material respects, fairly present the respective consolidated financial
positions, results of operations and cash flows of the Borrower for each of the
periods covered. Neither the Borrower nor any of its Subsidiaries has any
Contingent Obligation, contingent liability or liability for taxes, long term
leases or
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commitments, which in accordance with GAAP is not required to be reflected and
is not reflected in such Financial Statements. In addition, the Borrower has
delivered to the Agent and the Lenders certain projected financial data of the
Borrower and its Subsidiaries dated December 1999 including forecasted balance
sheets and income statements and sources and uses of cash for Fiscal Years 2000
through 2002 which take into consideration the transactions contemplated by this
Credit Agreement and which have been made, as of the Closing Date, in good faith
and, as of the Closing Date, the Borrower has no reason to believe such
projections and the assumptions upon which they are based are not reasonable.
6.10 Locations of Offices, Records and Inventory. The address of the
principal place of business and chief executive office of the Borrower is set
forth on Schedule B, Part 6.10. The books and records of the Borrower, and all
its chattel paper and records of Accounts, are maintained exclusively at such
locations. There is no jurisdiction in which the Borrower has any Collateral
(except for vehicles and Inventory in transit for processing) other than those
jurisdictions identified on Schedule B, Part 6.10. A complete list of the legal
name and address of each warehouse at which Inventory is stored is set forth on
Schedule B, Part 6.10. None of the receipts received and to be received by the
Borrower from any warehouseman state that the Inventory covered thereby is to be
delivered to bearer or to the order of a named person or to a named person and
such named person's assigns.
6.11 Subsidiaries; Ownership of Stock. The only direct or indirect
Subsidiaries of the Borrower are those listed on Schedule B, Part 6.11. The
Borrower is the record and beneficial owner of all of the shares of capital
stock of each of the Subsidiaries listed on Schedule B, Part 6.11. There are no
proxies, irrevocable or otherwise, with respect to such shares, and no equity
securities of any of such Subsidiaries are or may become required to be issued
by reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of any such
Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any such Subsidiary is or may become bound to issue
additional shares of its capital stock or securities convertible into or
exchangeable for such shares. All of such shares so owned by the Borrower are
owned by the Borrower free and clear of any Liens.
6.12 No Judgments or Litigation. Except as set forth on Schedule B,
Part 6.12, no judgments, orders, writs or decrees are outstanding against the
Borrower or any of its Subsidiaries nor is there now pending or, to the
Borrower's knowledge after inquiry, threatened, any litigation, contested claim,
investigation, arbitration, or governmental proceeding by or against the
Borrower or any of its Subsidiaries involving a claim of $100,000 or more;
provided, that after the Closing Date, the representation and warranty under
this Section 6.12 shall be deemed made only as to claims net of insurance
coverage therefor so long as the insurer thereof is not defending any such claim
subject to a reservation of rights.
6.13 No Defaults. Except as set forth on Schedule B, Part 6.13, neither
the Borrower nor any of its Subsidiaries is in default under any term of any
Material Contract. Except as set forth on Schedule B, Part 6.13, the Borrower
knows of no dispute regarding any Material Contract.
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6.14 Labor Matters. Schedule B, Part 6.14 accurately sets forth all
labor contracts (other than individual employment agreements) to which the
Borrower or any of its Subsidiaries is a party and their dates of expiration.
There are no existing or threatened strikes, lockouts or other disputes relating
to any collective bargaining or similar labor agreement to which the Borrower or
any of its Subsidiaries is a party.
6.15 Compliance with Law. Neither the Borrower nor any of its
Subsidiaries has violated or failed to comply in any material respect with any
Requirement of Law, including, without limitation, ERISA and environmental laws.
6.16 ERISA. None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate maintains or contributes to any Plan, other than those listed on
Schedule B, Part 6.16. The Borrower, each of its Subsidiaries and each ERISA
Affiliate have fulfilled all contribution obligations for each Plan (including
obligations related to the minimum funding standards of ERISA and the Internal
Revenue Code). No Termination Event has occurred nor has any other event
occurred that may result in a Termination Event. None of the Borrower or its
Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is subject to
any direct or indirect liability with respect to any Plan under any Requirement
of Law or agreement. None of the Borrower or its Subsidiaries or any ERISA
Affiliate is required to provide security to any Plan under Section 401(a)(29)
of the Internal Revenue Code.
6.17 Compliance with Environmental Laws. Except as disclosed on
Schedule B, Part 6.17, (i) none of the Borrower nor any of its Subsidiaries is
the subject of a judicial or administrative proceeding or investigation relating
to the violation of any environmental, health or safety Requirement of Law, or
asserting potential liability arising from the disposal by any Person of any
hazardous substance; (ii) neither the Borrower nor any of its Subsidiaries has
filed any notice under any Requirement of Law of treatment, storage, disposal,
spill or release of a hazardous substance; and (iii) neither the Borrower nor
any of its Subsidiaries has knowledge of any contingent liability for any
release of any hazardous substance.
6.18 Intellectual Property. The Borrower possesses such assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names as are required to continue to conduct its present business
activities.
6.19 Licenses and Permits. Each of the Borrower and its Subsidiaries
has obtained and holds in full force and effect, all franchises, licenses,
leases, permits, certificates, authorizations, qualifications, easements, rights
of way and other rights and approvals which are required for the operation of
its business.
6.20 Taxes and Tax Returns.
(a) Except as set forth on Schedule B, Part 6.20, the Borrower
and each of its Subsidiaries has timely filed, without request for extension,
all income tax returns it is required to file. The information filed is complete
and accurate in all material respects. All deductions taken in such income tax
returns are appropriate and in accordance with applicable laws and regulations,
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except deductions that may have been disallowed but are being challenged in good
faith and for which adequate reserves have been made in accordance with GAAP.
(b) Except for matters which could not result in a material
additional liability, all taxes, assessments, fees and other governmental
charges for periods beginning prior to the date hereof, have been timely paid
and neither the Borrower nor any of its Subsidiaries has any liability for taxes
in excess of the amounts so paid or reserves so established.
(c) Except as set forth in Schedule B, Part 6.20, no
deficiencies for taxes have been claimed, proposed or assessed by any taxing or
other Governmental Authority against the Borrower or any of its Subsidiaries and
no tax liens have been filed. Except as set forth in Schedule B, Part 6.20,
there are no pending or, to the knowledge of the Borrower, threatened audits,
investigations or claims for or relating to any liability for taxes and there
are no matters under discussion with any Governmental Authority which could
result in a material additional liability for taxes. Except as set forth in
Schedule B, Part 6.20, no extension of a statute of limitations relating to
taxes, assessments, fees or other governmental charges is in effect with respect
to the Borrower or any of its Subsidiaries.
(d) Except as set forth on Schedule B, Part 6.20, neither the
Borrower nor any of its Subsidiaries has any obligation under any written tax
sharing agreement or agreement regarding payments in lieu of taxes.
6.21 Material Contracts. Schedule B, Part 6.21, contains a true,
correct and complete list of all the Material Contracts currently in effect on
the Closing Date. Except as described on Schedule B, Part 6.21, none of the
Material Contracts contains any burdensome restrictions on the Borrower or any
of its Subsidiaries or any of their respective properties, all of the Material
Contracts are in full force and effect, and no defaults currently exist
thereunder.
6.22 Accuracy and Completeness of Information; Updating of Schedule B.
All factual information furnished by or on behalf of the Borrower or any of its
Subsidiaries in writing to the Agent, any Lender, or the Auditors for purposes
of or in connection with this Credit Agreement or any Credit Documents, or any
transaction contemplated hereby or thereby is or will be true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information not misleading at such time. The Borrower may amend and
deliver to Agent Schedule B, amended to reflect any such changes in factual
matters as are otherwise permitted by the terms of the Credit Documents or are
as otherwise consented to by the Agent or the such of the Lenders as required by
the terms of the Credit Documents.
6.23 Title to Property. All Real Property is identified on Schedule B,
Part 6.23. The Borrower has good and marketable title in fee simple to, or a
valid leasehold interest in, all its Real Property, and none of such Real
Property is subject to any Lien other than as permitted under Section 8.10 or
described in any title insurance policy obtained by the Lenders in connection
with the Loans.
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6.24 Affiliate Transactions. Except as set forth on Schedule B, Part
6.24 neither the Borrower nor any Subsidiary is a party to or bound by any
agreement or arrangement (whether oral or written) to which any Affiliate of the
Borrower or any Subsidiary is a party except (i) in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and (ii) upon fair and reasonable terms no less favorable to the
Borrower and such Subsidiary than it could obtain in a comparable arm's-length
transaction with an unaffiliated Person.
6.25 Recording Taxes. All mortgage recording taxes, recording fees and
other charges payable in connection with the filing and recording of the Credit
Documents have either been paid in full by the Borrower or arrangements for the
payment of such amounts satisfactory to the Agent shall have been made.
6.26 No Change. There has been no development or event nor any
prospective development or event, which has had or would probably have a
Material Adverse Effect.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder:
7.1 Financial Reporting. The Borrower shall timely deliver to each
Lender the following information:
(a) Annual Financial Statements. As soon as available, but not
later than 90 days after each fiscal year end: (i) the Borrower's annual audited
Financial Statements; (ii) a comparison in reasonable detail to the prior year
audited Financial Statements; (iii) the Auditors' unqualified opinion,
"Management Letter" (if issued) and statement indicating that the Auditors have
not obtained knowledge of the existence of any Default or Event of Default
respecting Sections 8.1-8.8 during their audit; (iv) a management discussion and
analysis of the Borrower's consolidated financial condition and results of
operations and the consolidated liquidity and capital resources for such fiscal
year, prepared by the chief financial officer of the Borrower; and (v) a
compliance certificate substantially in the form of Exhibit D with an attached
schedule of calculations demonstrating compliance with the Article 8 financial
covenants.
(b) Projections and Budgets. Not later than 45 days after each
fiscal year end, beginning with the fiscal year ended December 31, 1999,
projections of the Borrower's financial condition and results of operations for
the next three years, containing projected consolidating balance sheets,
statements of operations, statements of cash flows and statements of changes in
shareholders equity on a monthly basis for the first of the three years,
quarterly for the second, and annually for the third, together with the
Borrower's budget for the then current fiscal year.
(c) Quarterly Financial Statements. As soon as available, but
not later than 45 days after each end of each of the first three fiscal
quarters, and 90 days after end of the last fiscal quarter: (i) the Borrower's
Financial Statements as of the fiscal quarter then ended, and for the
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fiscal year to date; (ii) a comparison in reasonable detail to the Financial
Statements for the corresponding periods of the prior fiscal year; (iii) the
certification of the chief executive officer or chief financial officer of the
Borrower that such Financial Statements have been prepared in accordance with
GAAP (subject to year-end audit adjustments and without notes); (iv) a
management discussion and analysis of the Borrower's consolidated financial
condition and results of operations and the consolidated liquidity and capital
resources for such fiscal quarter and fiscal year to date, prepared by the chief
financial officer of the Borrower; and (v) a compliance certificate
substantially in the form of Exhibit D with an attached schedule of calculations
demonstrating compliance with the Article 8 financial covenants.
(d) Monthly Financial Statements. As soon as available, but
not later than 45 days after the end of each month: (i) a balance sheet for the
Borrower as at the end of such month and for the fiscal year to date and
statements of operations and cash flows for such month and for the fiscal year
to date; (ii) a comparison to the balance sheet, statement of operations and
statement of cash flows for the same periods in the prior year; and (iii) a
certification by the chief executive officer or chief financial officer of the
Borrower that such balance sheet, statement of operations and statement of cash
flows have been prepared in accordance with GAAP (subject to year-end audit
adjustments and without notes).
(e) Monthly Comparison to Prior Projections. As soon as
available, but not later than 45 days after the end of month, a comparison of
actual results of operations, cash flow and capital expenditures for the
Borrower for such month and for the period from the beginning of the current
fiscal year through the end of such month with amounts previously projected for
those periods as required under Section 7.1(b) and with actual results for
corresponding periods in the previous fiscal year.
7.2 Collateral Reporting. The Borrower shall timely deliver to the
Agent the following certificates and reports:
(a) Monthly Borrowing Base Certificates. Monthly, within five
(5) Business Days after the last Business day of each month, and at any other
time requested by the Agent, a borrowing base certificate (the "Borrowing Base
Certificate"), which shall be: (i) completed substantially in the form of
Exhibit E, detailing the Borrower's Eligible Accounts Receivable and Eligible
Inventory as of the last day of each month, (or as of such other date as the
Agent may request); (ii) prepared by or under the supervision of the Borrower's
chief executive officer or chief financial officer and certified by such officer
subject only to adjustment upon completion of the normal year-end audit of
physical inventory; and (iii) attached to such additional schedules and other
information as the Agent may reasonably request.
(b) Appraisals. When reasonably requested by the Agent, 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 the Borrower's Inventory by category and
by item (in detail) and report the then appraised value (at lower of cost or
market) of such Inventory, and a report of Equipment which shall describe the
Borrower's and its Subsidiaries' Equipment (in detail) and report the then
appraised value (at lower of cost or market) of such Equipment. In addition,
when requested by the Agent in the exercise of its
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Permitted Discretion after consultation with the Borrower regarding the scope
and cost of any such appraisal, the Borrower shall provide the Lenders, at the
Borrower's expense, with appraisals or updates thereof of any or all of the
Collateral. Unless an Event of Default has occurred and is continuing, the
appraisals or updates thereof respecting container inventory held for lease
shall not be requested more than twice during any twelve month period. The
Borrower acknowledges and agrees that the Agent intends to have performed at
least once such appraisal or update with respect to container inventory held for
least during each twelve month period during the term of this Agreement.
(c) Further Assurances. When reasonably requested by the
Agent, any further information regarding the Collateral, business affairs and
financial condition of the Borrower or any of its Subsidiaries.
7.3 Notification Requirements. The Borrower shall timely give the Agent
and each of the Lenders the following notices:
(a) Notice of Default. Promptly, and in any event within two
(2) Business Days after the Borrower becomes aware of the occurrence of an Event
of Default or a Default which is reasonably likely to become an Event of
Default, a certificate of the chief executive officer or chief financial officer
of the Borrower specifying the nature thereof and the Borrower's proposed
response thereto, each in reasonable detail.
(b) Proceedings or Adverse Changes. Promptly, and in any event
within five (5) Business Days after the Borrower becomes aware of (i) any
proceeding being instituted or threatened to be instituted by or against the
Borrower or any of its Subsidiaries in any federal, state, local or foreign
court or before any commission or other regulatory body (federal, state, local
or foreign), (ii) any order, judgment or decree in excess of $100,000 being
entered against the Borrower or any of its Subsidiaries or any of their
respective properties or assets or (iii) any actual or prospective change,
development or event which has had or would probably have a Material Adverse
Effect, a written statement describing such proceeding, order, judgment, decree,
change, development or event and any action being taken with respect thereto by
the Borrower or any such Subsidiary.
(c) ERISA Notices. (i) Promptly, and in any event within ten
(10) Business Days after the Borrower, any of its Subsidiaries or any ERISA
Affiliate becomes aware that a Termination Event involving a claim against, or
possible liability of, the Borrower of at least $100,000 has occurred, a written
statement of the chief financial officer of the Borrower describing such
Termination Event and any action that is being taking with respect thereto by
the Borrower, any such Subsidiary or ERISA Affiliate, and any action taken or
threatened by the Internal Revenue Service, Department of Labor or Pension
Benefit Guaranty Corporation. The Borrower, such Subsidiary and the ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Benefit Plan of which it is the plan sponsor; (ii) promptly, and in any event
within three (3) Business Days after the filing thereof with the Internal
Revenue Service, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by the Borrower, any of its
Subsidiaries or any ERISA Affiliate with respect to such request; and (iii)
promptly, and in any event within three (3) Business Days after receipt by the
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Borrower, any of its Subsidiaries or any ERISA Affiliate, of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice.
(d) Environmental and Health and Safety Notices. 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 Requirement of Law
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.
(e) Material Contracts. Promptly, and in any event within ten
(10) Business Days after any Material Contract of the Borrower or any of its
Subsidiaries is terminated or amended or any new Material Contract is entered
into, a written statement describing such event, with copies of amendments or
new contracts, and an explanation of any actions being taken with respect
thereto.
(f) Collateral Matters. At least thirty (30) Business Days'
prior written notice to the Agent of any change in the location of any
Collateral or in the location of the chief executive office or place of business
of the Borrower or any of its Subsidiaries from the locations specified in
Schedule B, Part 6.10, or any change of the corporate name, structure or
identity of the Borrower or any of its Subsidiaries otherwise permitted hereby.
At least ten (10) days prior to any such change, the Borrower shall cause to be
executed and delivered to the Agent any financing statements, Collateral Access
Agreements or other documents required by the Agent, all in form and substance
satisfactory to the Agent.
(g) SEC Filings and Shareholder Communications. Promptly, and
in any event within ten (10) Business Days of the date of filing or
transmission, copies of all filings made by or on behalf of the Borrower with
the Securities and Exchange Commission and of all material communications with
the Borrower's shareholders.
7.4 Corporate Existence. The Borrower shall, and shall cause each of
its Subsidiaries to, (i) maintain its corporate existence (except that the
Borrower's Subsidiaries may merge with each other and with the Borrower,
provided the Agent receives five (5) Business Days' prior written notice
thereof), (ii) maintain in full force and effect all licenses, bonds,
franchises, leases, trademarks and qualifications to do business, and all
patents, contracts and other rights necessary or advisable to the conduct of
their businesses, and (iii) continue in, and limit their operations to, the same
general lines of business as presently conducted by them.
7.5 Books and Records; Inspection. The Borrower agrees to maintain, and
to cause each of its Subsidiaries to maintain, books and records pertaining to
the Collateral in such detail, form and scope as is consistent with good
business practice. The Borrower agrees that the Agent or its agents may enter
upon the premises of the Borrower or any of its Subsidiaries at any time and
from time to time, during normal business hours and upon reasonable notice under
the circumstances, and at any time at all on and after the occurrence of a
Default which continues
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beyond the expiration of any grace or cure period applicable thereto, and which
has not otherwise been waived by the Agent, for the purposes of (i) inspecting
and verifying the Collateral, (ii) inspecting and/or copying (at the Borrower's
expense) any and all records pertaining thereto, and (iii) discussing the
affairs, finances and business of the Borrower with any officers, employees and
directors of the Borrower or with the Auditors.
7.6 Insurance. Except as set forth on Schedule B, Part 7.6, the
Borrower agrees to maintain, and to cause each of its Subsidiaries to maintain,
public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are at
all times satisfactory to the Agent in its commercially reasonable judgment. All
policies covering the Collateral are to name the Agent as an additional insured
and the loss payee in case of loss, and are to contain such other provisions as
the Agent may reasonably require to fully protect the Agent's interest in the
Collateral and to any payments to be made under such policies.
7.7 Taxes. The Borrower agrees to pay, when due, and to cause each of
its Subsidiaries to pay when due, all taxes lawfully levied or assessed against
the Borrower, any of its Subsidiaries or any of the Collateral before any
penalty or interest accrues thereon; provided, however, that, unless such taxes
have become a federal tax or ERISA Lien on any of the assets of the Borrower or
any of its Subsidiaries, no such tax need be paid if the same is being
contested, in good faith, by appropriate proceedings promptly instituted and
diligently conducted and if an adequate reserve or other appropriate provision
shall have been made therefor as required in order to be in conformity with
GAAP.
7.8 Compliance with Laws. The Borrower agrees to comply, and to cause
each of its Subsidiaries to comply, in all material respects with all
Requirements of Law applicable to the Collateral or any part thereof, or to the
operation of its business or its assets generally, unless the Borrower contests
any such Requirements of Law in a reasonable manner and in good faith.
7.9 Use of Proceeds. The Revolving Loans made to the Borrower hereunder
shall be used by the Borrower to pay the costs and expenses of the transactions
contemplated by this Credit Agreement which are due and payable on the Closing
Date, including without limitation the Fees and Expenses due on the Closing Date
pursuant to Article 4 hereof, and for working capital and other general
corporate purposes; and the proceeds of any subsequent Revolving Loans made
hereunder shall be used by the Borrower solely for ongoing working capital
requirements. The Borrower shall not use any portion of the proceeds of any such
Revolving Loans for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation U or X of said Board
of Governors or for any other purpose in violation of any applicable statute or
regulation, or of the terms and conditions of this Credit Agreement.
7.10 Fiscal Year. The Borrower agrees to maintain its fiscal year as a
year ending December 31.
7.11 Maintenance of Property. The Borrower agrees to keep, and to cause
each of its Subsidiaries to keep, all property useful and necessary to their
respective businesses in good
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working order and condition (ordinary wear and tear excepted) in accordance with
their past operating practices and not to commit or suffer any waste with
respect to any of their properties.
7.12 ERISA Documents. The Borrower will cause to be delivered to the
Agent, upon the Agent's request, each of the following: (i) a copy of each Plan
(or, where any such plan is not in writing, complete description thereof) (and
if applicable, related trust agreements or other funding instruments) and all
amendments thereto, all written interpretations thereof and written descriptions
thereof that have been distributed to employees or former employees of the
Borrower or its Subsidiaries; (ii) the most recent determination letter issued
by the Internal Revenue Service with respect to each Benefit Plan; (iii) for the
three most recent plan years, Annual Reports on Form 5500 Series required to be
filed with any governmental agency for each Benefit Plan; (iv) all actuarial
reports prepared for the last three plan years for each Benefit Plan; (v) a
listing of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by the Borrower or any ERISA Affiliate
to each such plan and copies of the collective bargaining agreements requiring
such contributions; (vi) any information that has been provided to the Borrower
or any ERISA Affiliate regarding withdrawal liability under any Multiemployer
Plan; and (vii) the aggregate amount of the most recent annual payments made to
former employees of the Borrower or any ERISA Affiliate under any Retiree Health
Plan.
7.13 Further Assurances. The Borrower shall take, and shall cause each
of its Subsidiaries to take, all such further actions and execute all such
further documents and instruments as the Agent may at any time reasonably
determine in its sole discretion to be necessary or desirable to further carry
out and consummate the transactions contemplated by the Credit Documents, to
cause the execution, delivery and performance of the Credit Documents to be duly
authorized and to perfect or protect the Liens (and the priority status thereof)
of the Agent on the Collateral.
ARTICLE VIII.
NEGATIVE COVENANTS
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder, the Borrower shall comply with,
and, where required, shall cause each of its Subsidiaries to comply with, the
following covenants:
8.1 Consolidated Tangible Net Worth. The Borrower shall maintain a
Consolidated Tangible Net Worth as of the last day of each fiscal quarter of not
less than $18,800,000.
8.2 EBITDA. The Borrower shall maintain EBITDA of not less than
$12,500,000 for the immediately preceding four fiscal quarters calculated as of
the last day of each such quarter.
8.3 Fixed Charge Coverage Ratio. The Borrower shall maintain for the
immediately preceding four fiscal quarters a ratio of EBITDA to Consolidated
Fixed Charges of not less than the ratio set forth below, in each case
calculated as of the end of each such quarter:
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FOUR QUARTERS ENDED RATIO
12/31/99 1.0:1.0
3/31/00 1.35:1.0
and thereafter
8.4 Interest Coverage Ratio. The Borrower shall maintain for the
immediately preceding four fiscal quarters a ratio of (a) EBITDA to (b) Interest
Expense of not less than 2.60:1.0, calculated as of the end of each fiscal
quarter.
8.5 Current Ratio. The Borrower shall maintain for each fiscal quarter
a ratio, calculated as of the end of each such quarter, of Current Assets to
Current Liabilities of not less than 1.50:1.0.
8.6 Debt Ratio. The Borrower shall maintain for the four immediately
preceding fiscal quarters, calculated as of the end of each such quarter, a
ratio of Funded Debt to EBITDA of not more than the ratio set forth below:
FOUR QUARTERS ENDED RATIO
12/31/99 4.6:1.0
3/31/2000 5.0:1.0
6/30/2000 5.0:1.0
9/30/2000 5.0:1.0
12/31/2000 5.0:1.0
3/31/2001 4.75:1.0
6/30/2001 4.75:1.0
9/30/2001 4.75:1.0
12/31/2001 4.75:1.0
3/31/2002 4.75:1.0
6/30/2002 4.75:1.0
9/30/2002 4.75:1.0
12/31/2002 4.75:1.0
3/31/2003 4.5:1.0
and thereafter
8.7 Minimum Utilization Rates. The Borrower 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:
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(a) the number of units of each of the Borrower's Eligible
Container Fleet Inventory which is then subject to valid, current rental or
lease agreements between the Borrower and the renters or lessees thereof,
divided by the aggregate number of units of the Borrower's Eligible Container
Fleet Inventory, of not less than eighty percent (80%); and
(b) (i) the number of units of the Borrower's Eligible
Container Fleet Inventory which is then subject to valid, current rental or
lease agreements between the Borrower and the renters or lessees thereof,
divided by (ii) sum of (A) the number of units of the Borrower's Eligible
Container Fleet Inventory, and (B) the number of units of the Borrower's
Eligible Container Inventory Held For Sale plus the number of units of the
Borrower's Eligible Primary Raw Materials Inventory consisting of unrefurbished
ISO units, of not less than seventy-five percent (75%); provided, that for the
purposes of calculation of compliance with this Section 8.7(b), the aggregate of
the number of units of Eligible Container Inventory Held For Sale plus the
number of units of the Borrower's Eligible Primary Raw Materials Inventory
consisting of unrefurbished ISO units, as a percentage of the sum of clauses (A)
and (B) above, shall not exceed five percent (5%).
8.8 Capital Expenditures. The Borrower shall not make payments for
Capital Expenditures (net of sales of Eligible Container Fleet Inventory) in
excess of the following amounts per fiscal year; provided, that as long as no
Event of Default shall have occurred and be continuing, the Borrower 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
Section 8.8 as an annual limit to Capital Expenditures shall be increased, for a
year in which the Borrower effects any sale of equity securities of the
Borrower, by an amount equal to three hundred percent of the net proceeds
received by the Borrower from any such sale of equity securities of the Borrower
during such year (the "CapEx Equity Increase"). The Borrower shall not make any
Capital Expenditures that are not directly related to the business conducted on
the Closing Date by the Borrower. Notwithstanding the foregoing, for each of
Borrower's fiscal years ending December 31, 2000, December 31, 2001 and December
31, 2002, the Borrower may carry forward the aggregate CapEx Equity Increase
arising from the Borrower's sale of equity securities during the Borrower's
fiscal year ending December 31, 1999, to the extent such aggregate CapEx Equity
Increase does not exceed $111,000,000, by an amount not to exceed the portion of
the such CapEx Equity Increase not counted towards the payment of Capital
Expenditures during the prior fiscal year (up to a maximum of one hundred
percent (100%) of the prior year's limitation amount) as long as (A) no Event of
Default shall have occurred and be continuing and (B) for the Borrower's fiscal
years ending December 31, 2001 and December 31, 2002, the ratio of Funded Debt
to EBITDA shall not at any time be greater than 4.0:1.0.
CAPITAL EXPENDITURES FOR PLANT,
PROPERTY AND EQUIPMENT ONLY (I.E.,
EXCLUDING CONTAINER FLEET INVENTORY
FISCAL YEAR ENDED CAPITAL EXPENDITURES HELD FOR SALE)
12/31/99 $10,900,000 $2,600,000
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CAPITAL EXPENDITURES FOR PLANT,
PROPERTY AND EQUIPMENT ONLY (I.E.,
EXCLUDING CONTAINER FLEET INVENTORY
FISCAL YEAR ENDED CAPITAL EXPENDITURES HELD FOR SALE)
and thereafter
8.9 Additional Indebtedness. Neither the 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 Credit Documents and Indebtedness
under the Subordinated Debt;
(b) Indebtedness under Interest Rate Agreements in the
ordinary course of business;
(c) Indebtedness described on Schedule B, Part 8.9, 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; and
(d) Indebtedness, including lease obligations, secured by
purchase money liens on or respecting equipment the title to or leasehold
interest in which is acquired after the date hereof, not to exceed $1,250,000 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
the Agent for any item of equipment for which the purchase price (whether
payable by the 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.
8.10 Liens. Neither the 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 the Lenders under the Credit Document;
(b) Liens listed on Schedule B, Part 8.10;
(c) Purchase Money Liens and Leases;
(d) 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 the Borrower, so long as the Agent has been notified thereof
and adequate reserves are maintained by the Borrower for their payment;
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(e) Attachment or judgment Liens not to exceed an aggregate of
$100,000 excluding amounts (i) bonded to the reasonable satisfaction of the
Agent or (ii) covered by insurance to the reasonable satisfaction of the Agent;
(f) Deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment insurance,
not to exceed an aggregate of $250,000;
(g) 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 $100,000;
(h) 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 the Borrower or any of its Subsidiaries;
(i) 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
(j) Liens securing Indebtedness described in Section 8.9(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.
(k) Deposits or pledges to support the Borrower's interest
payment obligations under the Subordinated Debt pursuant to the terms of such
Subordinated Debt, so long as such deposit or pledge relates to an amount which
does not exceed the amount equal to one six-month period of interest on the
principal balance of the Subordinated Debt.
8.11 Contingent Obligations. Neither the 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 Section 8.9 hereof.
8.12 Sale of Assets. The 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 $250,000 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
Section 8.12, (v) sales of container inventory held for lease for the purpose of
securitization or like off-balance sheet
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financing with the prior written consent of the Agent and the Lenders, which
consent shall not be unreasonably withheld, and (vi) sales of modular building
inventory for the purpose of securitization or like off-balance sheet financing
if the Agent has previously provided its written consent (which shall not be
unreasonably withheld) to the model and structure of such sale if the actual
sale is on terms substantially similar to those of such model and structure,
provided that, with respect to clauses (ii), (iii) and (iv), (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
the Borrower (subject to the limitations of Section 8.8) or its Subsidiaries or
used to repay the Loans and applied first to reduce the Scheduled Term Loan
Installments in inverse order of maturity, until paid in full and thereafter to
Revolving Loans to reduce permanently the Revolving Credit Commitments, and (c)
the aggregate amount of all of the dispositions pursuant to clause (iv) does not
exceed $250,000 in the aggregate for any fiscal year.
8.13 Restricted Payments. The 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 the 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 capital stock of the Borrower
or any warrants, options or rights to purchase any such capital stock (other
than up to $10,000 of payments to call warrants with respect to the 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 the Borrower or any of its Subsidiaries except
that any Subsidiary may declare and pay dividends to the Borrower or any other
Subsidiary; or (b) make any optional payment or prepayment on or redemption
(including, without limitation, by making payments to a sinking or analogous
fund) or repurchase of any Indebtedness (other than Indebtedness pursuant to
this Credit Agreement) or of any Mandatory Redeemable Obligation; provided that
any Subsidiary may make payments on account of Indebtedness owing to the
Borrower or any other Subsidiary.
8.14 Investments. The 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 the 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 the Borrower and
its Subsidiaries in existence as of the date hereof and described on Schedule B,
Part 8.14;
(c) Cash Equivalents;
(d) Deposits with financial institutions, disclosed in
Schedule B, Part 8.16, and which are insured by the Federal Deposit Insurance
Corporation ("FDIC") or a similar federal insurance program; provided, however,
that the Borrower may, in the ordinary course of its
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business, maintain in its disbursement accounts from time to time amounts in
excess of then applicable FDIC or other program insurance limits; and
(e) Such other Investments as the Agent may approve in writing
in its sole discretion.
8.15 Affiliate Transactions. The 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 Subsidiary or Affiliate of
the Borrower, except the transactions in existence on the Closing Date as
described on Schedule B, Part 8.15, and except transactions in the ordinary
course of and pursuant to the reasonable requirements of the 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 the Borrower or such Subsidiary or such
Affiliate than could be obtained in a comparable arm's-length transaction with
an unaffiliated Person.
8.16 Additional Bank Accounts. The 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 the Disbursement Account and the
accounts set forth on Schedule B, Part 8.16.
8.17 Excess Cash. The Borrower shall not, and shall not permit its
Subsidiaries to, directly or indirectly, maintain in the aggregate in all
deposit accounts of the Borrower and its Subsidiaries (other than the
Disbursement Account and payroll accounts), total cash balances and Investments
permitted by Sections 8.14(c), (d) and (e), in excess of an average daily
balance of $200,000 (calculated monthly) at any time for three consecutive
months during which any Revolving Loans are outstanding hereunder.
8.18 Additional Negative Pledges. The 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, or permit any of its Subsidiaries
to create or otherwise cause or suffer to exist or become effective, directly or
indirectly, (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 the Agent and the Lenders) on the creation or
existence of any Lien upon the assets of the Borrower or its Subsidiaries or
(ii) any contractual obligation which may restrict or inhibit the 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.
8.19 No Subsidiaries. The Borrower shall not, directly or indirectly,
form or acquire any new Subsidiaries, except for Permitted Acquisitions in
compliance with Section 8.21. The Borrower shall not, and shall not permit any
of its Subsidiaries to, become a general partner on or after the date hereof in
any partnership or joint venture.
8.20 Operating Leases, Off-Balance Sheet Financing. Neither the
Borrower nor any of its Subsidiaries shall directly or indirectly incur, create,
assume or suffer to exist any liabilities for
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operating leases or other indebtedness or liabilities not reflected as such on
their financial statements other than liabilities described on Schedule B, Part
8.20, 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.
8.21 Permitted Acquisitions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make an Acquisition unless each of the
following conditions is satisfied:
(a) such Acquisition is made by the Borrower;
(b) such Acquisition shall be consensual and shall have been
approved by the board of directors of the Person to be acquired;
(c) both before and after giving effect to such Acquisition,
all representations and warranties of the Credit Parties contained in any Credit
Document are true and correct and no Default or Event of Default shall have
occurred and be continuing, and the Agent shall receive a certificate of the
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, all Credit Parties
(including any Subsidiary acquired in such Acquisition) shall be solvent (as
represented in Section 6.7) and the Borrower shall be in compliance with all
financial covenants in Sections 8.1 through 8.7 hereof inclusive on a pro forma
basis, and the Agent shall receive a certificate of the Borrower to such effect
on the date on which such Acquisition is consummated;
(e) the purchase price for any single Acquisition or series of
related Acquisitions in any Fiscal Year shall not exceed $10,000,000, nor shall
the purchase price for all Acquisitions during the term of the Agreement exceed
$30,000,000 in the aggregate. For purposes hereof, any Indebtedness assumed in
connection with an Acquisition shall be included in the calculation of the
purchase price;
(f) the Borrower shall have delivered written notice of the
pending Acquisition to the Agent, the Issuing Bank and the Lenders at least
twenty (20) Business Days prior to its consummation including a detailed
description of such pending Acquisition, which notice shall be accompanied by
historical financial statements for the Person or business to be acquired and
pro forma financial statements giving effect to the Acquisition, in each case in
form and substance satisfactory to Agent, analyses of sources and uses of funds,
pro forma calculations of compliance with the financial covenants in Sections
8.1 through 8.7 hereof and, prior to consummation of the Acquisition, such other
due diligence information as may have been reasonably requested by the Agent,
the Issuing Bank or any Lender;
(g) if a Revolving Loan is to be made in connection with such
Acquisition, the Agent shall have received a Notice of Borrowing and a Borrowing
Base Certificate from the Borrower, which calculation of the Borrowing Base may
include the assets to be acquired directly by the Borrower in the Acquisition;
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(h) the Agent shall have received such financing statements,
filings and other Collateral Documents as required (or advisable in the Agent's
judgment) to perfect Liens on any assets to be acquired, including assets of any
new Subsidiary, together with evidence satisfactory to the 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 by the 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 be designated a Credit Party and
shall execute and deliver to the Agent such Collateral Documents as are required
to be executed by a Credit Party (other than the Borrower) and such other
documents as are necessary (or advisable in the Agent's judgment) under
applicable Requirements of Law in order to grant the Agent a perfected first
priority security interest and Lien in the assets of, and ownership interests
in, such Subsidiary (subject only to Permitted Liens); and the Borrower shall
execute and deliver a 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,
the Agent shall have received appraisals, in form and substance satisfactory to
Agent, of all Inventory of the Borrower 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 the Borrower immediately prior to the Closing Date or
similar activities related or incidental thereto; and
(n) on or prior to the date of such Acquisition, the Agent
shall have received, in form and substance satisfactory to Agent, all
acquisition documents related thereto and legal opinions, evidence of solvency,
certificates, Certificates of Title, lien search results and other documents and
instruments reasonably requested by the Agent, which collectively shall confirm
to the Agent's satisfaction that the conditions set forth herein have been
satisfied.
ARTICLE IX.
EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) Failure to Pay. The Borrower shall fail to pay: (i) any
Obligation (other than Fees not having a scheduled due date) when due; or (ii)
any Fees not having a scheduled due date within two (2) Business Days of the
Borrower's receipt of demand therefor.
(b) Breach of Certain Covenants. The Borrower shall fail to
comply with any covenant contained in Article 7 or Article 8 hereof.
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(c) Breach of Representation or Warranty. Any representation
or warranty made by the Borrower in this Credit Agreement or in any other Credit
Document (and in any statement or certificate given under this Credit Agreement
or any other Credit Document), shall be false or misleading in any material
respect when made.
(d) Other Breaches. Any Credit Party shall fail to comply with
any provisions contained in this Credit Agreement or any other Credit Document,
other than as set forth in Sections 9.1(a), 9.1(b) and 9.1(c), and such failure
shall continue for ten (10) Business Days after the earlier to occur of (x) the
date such Credit Party knew or should have known of its occurrence or (y) the
date of giving of notice thereof by Agent to such Credit Party.
(e) Dissolution. The Borrower shall dissolve, wind up or
otherwise cease its business.
(f) Insolvency Event. Any Credit Party shall become the
subject of an Insolvency Event.
(g) Change of Control. A Change of Control shall occur.
(h) 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 $1,000,000.
(i) Failure of Enforceability of Credit Documents; Security.
Any material covenant, agreement or obligation of any Credit Party contained in
or evidenced by any of the Credit Documents shall cease to be enforceable, or
shall be determined to be unenforceable, in accordance with its terms; any
Credit Party shall deny or disaffirm any of its material obligations under any
of the Credit 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 Credit Agreement as reflected in Schedule B, Part 8.10 (except where
such circumstance arises as a result of any action or inaction by any Lender).
9.2 Acceleration and Cash Collateralization. Upon the occurrence and
during the continuance of an Event of Default, the Agent may take any or all of
the following actions, without prejudice to the rights of the Agent or any
Lender to enforce its claims against the Borrower:
(a) Acceleration. Upon the written request of the Majority
Lenders, and by delivery of written notice to the Borrower from the Agent, all
Obligations shall be declared to be immediately due and payable (except with
respect to any Event of Default set forth in Section 9.1(f) hereof, in which
case all Obligations shall automatically become immediately due and payable
without the necessity of any request of the Majority Lenders or notice or other
demand to
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the Borrower) without presentment, demand, protest or any other action or
obligation of the Agent or any Lender.
(b) Termination Of Commitments. Upon the written request of
the Majority Lenders, and by delivery of written notice to the Borrower from the
Agent, the Commitments shall be immediately terminated and, at all times
thereafter, all Revolving Loans made by any Lender pursuant to this Credit
Agreement shall be at such Lender's sole discretion, unless such Event of
Default is waived in accordance with Section 11.11.
(c) Cash Collateralization. On demand of the Agent or the
Majority Lenders the Borrower shall immediately deposit with the Agent for each
Letter of Credit then outstanding, cash or Cash Equivalents in an amount equal
to 110% of the greatest amount drawable thereunder.
9.3 Rescission of Acceleration. After acceleration of the maturity of
the Loans, if the Borrower pays all accrued interest and all principal due
(other than by reason of the acceleration) and all Defaults and Events of
Default are otherwise remedied or waived in accordance with Section 11.11, the
Majority Lenders may elect in their sole discretion, to rescind the acceleration
and return any cash collateral. (This Section is intended only to bind all of
the Lenders to a decision of the Majority Lenders and not to confer any right on
the Borrower, even if the described conditions for the Majority Lenders'
election may be met.)
9.4 Remedies. Upon the occurrence and during the continuance of an
Event of Default, the Agent may do any or all of the following:
(a) remove all documents, instruments, files and records
(including the copying of any computer records) relating to the Accounts or use
(at the expense of the Borrower) such supplies or space of the Borrower at the
Borrower's place of business necessary to properly administer and collect the
Accounts thereon;
(b) accelerate or extend the time of payment, compromise,
issue credits, or bring suit on the Accounts (in the name of the Borrower or the
Lenders) and otherwise administer and collect the Accounts;
(c) sell, assign and deliver the Accounts and any returned,
reclaimed or repossessed merchandise, with or without advertisement, at public
or private sale, for cash, on credit or otherwise; and
(d) foreclose the security interests created pursuant to the
Credit Documents by any available procedure, or take possession of any or all of
the Collateral without judicial process and enter any premises where any
Collateral may be located for the purpose of taking possession of or removing
the same.
Any Lender may bid or become a purchaser at any sale, free from any right of
redemption, which right is expressly waived by the Borrower. If notice of
intended disposition of any Collateral is required by law, it is agreed that
five (5) Business Days' notice shall constitute reasonable notification. The
Borrower will assemble the Collateral and make it available to the Agent at such
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locations as the Agent may specify, whether at the premises of the Borrower or
elsewhere, and will make available to the Agent the premises and facilities of
the Borrower for the purpose of the Agent's taking possession of, removing or
putting the Collateral in saleable form.
9.5 Right of Setoff. In addition to and not in limitation of all rights
of offset that any Lender or the Issuing Bank may have under applicable law,
upon the occurrence of any Event of Default, and whether or not any Lender or
the Issuing Bank has made any demand or the Obligations of any Credit Party have
matured, each Lender and the Issuing Bank shall have the right to appropriate
and apply to the payment of the Obligations of such Credit Party all deposits
and other obligations then or thereafter owing by such Lender or the Issuing
Bank to such Credit Party; provided, that each Lender or the Issuing Bank
exercising such rights shall notify the Agent thereof prior to exercise, shall
refrain from exercising such right until the Agent shall have confirmed to such
Lender or Issuing Bank 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 Section 2.6.
9.6 License for Use of Software and Other Intellectual Property. Unless
expressly prohibited by the licensor thereof, if any, the Agent is hereby
granted a license to use all computer software programs, data bases, processes
and materials used by the Borrower in connection with its businesses or in
connection with the Collateral. The Agent agrees not to use any such license
prior to the occurrence of an Event of Default without giving the Borrower prior
notice.
9.7 No Marshaling; Deficiencies; Remedies Cumulative. The net cash
proceeds resulting from the Agent's exercise of any of the foregoing rights to
liquidate all or substantially all of the Collateral (after deducting all of the
Agent's Expenses related thereto) shall be applied by the Agent to the payment
of the Borrower's Obligations to the Agent and the Lenders, whether due or to
become due, in such order as the Agent may elect. The Borrower shall remain
liable to the Agent and the Lenders for any deficiencies, and the Agent and the
Lenders in turn agree to remit to the Borrower or its successors or assigns, any
surplus resulting therefrom. The foregoing remedies are not intended to be
exhaustive and the full or partial exercise of any of them shall not preclude
the full or partial exercise of any other available remedy under the Credit
Agreement, under any other Credit Document, at equity or at law.
ARTICLE X.
THE AGENT
10.1 Appointment of Agent.
(a) Each Lender hereby designates BT Commercial Corporation as
its Agent and irrevocably authorizes the Agent to take action on its behalf
under the Credit Documents, to exercise the powers and perform the duties
described therein, and to exercise such other powers reasonably incidental
thereto. The Agent may perform any of its duties through its agents or
employees.
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(b) Other than the Borrower's rights under Section 10.8, this
Article 10 is for the benefit of the Agent and the Lenders only. The Agent shall
act only for the Lenders and assumes no obligation to or agency or trust
relationship with any Credit Party.
10.2 Nature of Duties of Agent. The Agent has no duties or
responsibilities except those expressly set forth in the Credit Documents.
Neither the Agent nor any of its officers, directors, employees or agents shall
be liable for any action taken or omitted hereunder or in connection herewith,
other than as caused by gross negligence or willful misconduct. The duties of
the Agent shall be mechanical and administrative in nature. The Agent shall not
have a fiduciary relationship to any Lender or any participant of any Lender.
10.3 Lack of Reliance on Agent. Independently and without reliance upon
the Agent, each Lender has made and shall continue to make its own independent
investigation and analysis of the content and validity of the Credit Documents
or of the performance and creditworthiness of the Credit Parties thereunder. The
Agent assumes no responsibility and undertakes no obligation to make inquiry
with respect to such matters, unless specifically requested to do so in writing
by a Lender.
10.4 Certain Rights of the Agent. The Agent may request instructions
from the Majority Lenders at any time. If the Agent requests instructions from
the Majority Lenders with respect to any action or inaction, the Agent shall be
entitled to await instructions from the Majority Lenders before such action or
inaction. No Lender shall have any right of action based upon the Agent's action
or inaction in response to instructions from the Majority Lenders.
10.5 Reliance by Agent. The Agent may rely upon written or telephonic
communication it believes to be genuine and to have been signed, sent or made by
the proper person. The Agent may obtain the advice of legal counsel (including,
for matters concerning the Borrower, counsel for the Borrower), independent
public accountants and other experts selected by it and shall have no liability
for action or inaction in good faith based upon such advice.
10.6 Indemnification of Agent. To the extent the Agent is not
reimbursed and indemnified by the Borrower, each Lender will reimburse and
indemnify the Agent, to the extent of its Proportionate Share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever (including all Expenses) which may be imposed on,
incurred by or asserted against the Agent in performing its duties hereunder or
otherwise relating to the Credit Documents, unless resulting from the Agent's
gross negligence or willful misconduct.
10.7 The Agent in Its Initial Capacity. In its individual capacity, the
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise them as though it was not performing the duties specified herein.
The terms "Lenders," "Majority Lenders," or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower or any Affiliate of the
Borrower as if it were not performing the
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duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Credit Agreement and otherwise
without having to account for the same to the Lenders.
10.8 Successor Agent.
(a) The Agent may, upon five Business Days' notice to the
Lenders and the Borrower, resign by giving written notice thereof to the Lenders
and the Borrower. The Agent's resignation shall be effective upon the
appointment of a successor Agent.
(b) Upon receipt of the Agent's resignation, the Majority
Lenders may appoint a successor Agent. Unless an Event of Default shall have
occurred and be continuing at the time of such appointment, the successor Agent
shall be subject to approval by the Borrower, which approval shall not to be
unreasonably withheld and shall be delivered to the Majority Lenders within five
Business Days after the Borrower's receipt of notice of a proposed successor
Agent. If a successor Agent has not accepted its appointment within fifteen
Business Days, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent.
(c) Upon its acceptance of the agency hereunder, a successor
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Credit Agreement. The retiring Agent
shall continue to have the benefit of this Article 10 for any action or inaction
while it was Agent.
10.9 Collateral Matters.
(a) Each Lender authorizes and directs the Agent to enter into
the Collateral Documents for the benefit of the Lenders. Except as otherwise set
forth herein, any action or exercise of powers by the Majority Lenders under the
Credit Documents, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders. Prior to an
Event of Default, without notice to or consent from any Lender, the Agent may
take any action necessary or advisable to perfect and maintain the perfection of
the Liens upon the Collateral.
(b) The Agent is authorized to release any Lien granted to or
held by the Agent upon any Collateral (i) upon termination of the Commitments
and payment and satisfaction of all of the Obligations, or (ii) upon receipt of
the proceeds of sales of the Collateral permitted hereunder. The Agent may
request and the Lenders will provide confirmation of the Agent's authority to
release particular types or items of Collateral.
(c) The Agent shall have no obligation to assure that the
Collateral exists or is owned by the Borrower or any of its Subsidiaries, that
such Collateral is cared for, protected or insured, or that the Liens in the
Collateral have been created, perfected, or have any particular priority. With
respect to the Collateral, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the
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Lenders, and it shall have no duty or liability whatsoever to the Lenders,
except for its gross negligence or willful misconduct.
10.10 Actions with Respect to Defaults. In addition to the Agent's
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such action with respect to a Default or Event
of Default as shall be directed by the Majority Lenders. Until the Agent shall
have received such directions, the Agent may act (or not act) as it deems
advisable and in the best interests of the Lenders.
ARTICLE XI.
MISCELLANEOUS
11.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY DISPUTE ARISING OUT
OF OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OF THE CREDIT DOCUMENTS,
WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY
THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS
OF THE STATE OF CALIFORNIA.
11.2 SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG THE BORROWER AND
THE LENDERS (OR THE AGENT ACTING ON THEIR BEHALF), WHETHER SOUNDING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS
LOCATED IN LOS ANGELES, CALIFORNIA, AND THE COURTS TO WHICH AN APPEAL THEREFROM
MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE AGENT, ON BEHALF OF THE LENDERS, SHALL
HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST
THE BORROWER OR ITS PROPERTY IN ANY LOCATION REASONABLY SELECTED BY THE AGENT IN
GOOD FAITH TO ENABLE THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT. THE BORROWER AGREES THAT IT
WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY
PROCEEDING BROUGHT BY THE AGENT. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT HAS COMMENCED A PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
FORUM NON CONVENIENS.
11.3 SERVICE OF PROCESS. THE BORROWER HEREBY IRREVOCABLY DESIGNATES CT
CORPORATIONS SYSTEMS AS THE DESIGNEE, APPOINTEE AND AGENT OF THE BORROWER TO
RECEIVE, FOR AND ON BEHALF OF THE BORROWER, SERVICE OF PROCESS IN SUCH
RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT. IT IS UNDERSTOOD THAT A COPY OF
SUCH PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS WILL BE PROMPTLY FORWARDED BY
MAIL TO THE BORROWER, BUT FAILURE OF THE BORROWER TO
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RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS.
11.4 JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS EACH HEREBY
WAIVE ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY DISPUTES WILL BE RESOLVED IN A
BENCH TRIAL.
11.5 LIMITATION OF LIABILITY. NEITHER THE AGENT NOR ANY LENDER SHALL
HAVE ANY LIABILITY TO THE BORROWER (WHETHER SOUNDING IN TORT, CONTRACT, OR
OTHERWISE) FOR LOSSES SUFFERED BY THE BORROWER IN CONNECTION WITH, ARISING OUT
OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED BY
THIS CREDIT AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OR
COURT ORDER BINDING ON THE AGENT OR ANY SUCH LENDER, THAT THE LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
11.6 Delays. No delay or omission of the Agent or the Lenders to
exercise any right or remedy hereunder shall impair any such right or operate as
a waiver thereof.
11.7 Notices. Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to the Agent or any of the Lenders, then to BT
Commercial Corporation, 000 Xxxxx Xxxxx Xxx., 00xx Xxxxx, Xxx Xxxxxxx, XX 00000,
and if to the Borrower, then to the Borrower at Mobile Mini, Inc., 0000 Xxxx
Xxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attn: Xxxxxxx Xxxxxx, Chief Executive
Officer, and Xxxxx Xxxxxxxxxxxx, Chief Financial Officer, or by facsimile
transmission, promptly confirmed in writing sent by first class mail, if to the
Agent, or any of the Lenders, at (000) 000-0000, and if to the Borrower at (602)
894-6433. Copies of all notices to the Borrower respecting Events of Default
shall also be sent to Xxxxx Xxxx LLP, Xxx Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX
00000-0000, Attn: Xxxxxx X. Xxxxxxxxxx and if by facsimile, at (000) 000-0000.
All such notices and correspondence shall be deemed given (i) if sent by
certified or registered mail, three Business Days after being postmarked, (ii)
if sent by overnight delivery service, when received at the above stated
addresses or when delivery is refused and (iii) if sent by telex or facsimile
transmission, when receipt of such transmission is acknowledged.
11.8 Assignments and Participations.
(a) Borrower Assignment. The Borrower shall not assign this
Credit Agreement, or any rights or obligations hereunder, without the prior
written consent of the Agent and the Lenders.
(b) Lender Assignments. Each Lender may assign to one or more
banks or other financial institutions all or a portion of its fights and
obligations under this Credit Agreement, the Notes and the other Credit
Documents, with the consent of the Agent and the
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consent of the Borrower (which shall not be unreasonably withheld), and upon
execution and delivery to the Agent, for its acceptance and recording in the
Register (as defined below), of an agreement in substantially the form of
Exhibit G (an "Assignment and Assumption Agreement"), together with surrender of
any Note or Notes subject to such assignment and a processing and recordation
fee of $2,500. No such assignment shall be for less than $5,000,000 of the
Commitments and Term Loans unless it is to another Lender. (This Section does
not apply to branches and Affiliates of a Lender, it being understood that a
Lender may make, carry or transfer Loans at or for the account of any of its
branch offices or Affiliates without consent of the Borrower, the Agent or any
other Lender.)
(c) Agent's Register. The Agent shall maintain a register of
the names and addresses of the Lenders, their Commitments, and the principal
amount of their Loans (the "Register"). The Agent shall also maintain a copy of
each Assignment and Assumption Agreement delivered to and accepted by it and
modify the Register to give effect to each Assignment and Assumption Agreement.
Upon its receipt of each Assignment and Assumption Agreement and surrender of
the affected Note or Notes, the Agent will give prompt notice thereof to the
Borrower and deliver to the Borrower a copy of the Assignment and Assumption
Agreement and the surrendered Note or Notes. Within five Business Days after its
receipt of such notice, the Borrower shall execute and deliver to the Agent a
new Note or Notes to the order of the assignee in the amount of the Commitment,
Commitments or Loans, as the case may be, assumed by it and to the assignor in
the amount of the Commitment, Commitments or Loans, as the case may be, retained
by it, if any. Such new Note or Notes shall re-evidence the Indebtedness
outstanding under the surrendered Note or Notes and shall be dated as of the
Closing Date. The Agent shall be entitled to rely upon the Register exclusively
for purposes of identifying the Lenders hereunder.
(d) Lender Participations. Each Lender may sell participations
(without the consent of the Agent, the Borrower or any other Lender) to one or
more parties in or to all or a portion of its rights and obligations under this
Credit Agreement, the Notes and the other Credit Documents. Notwithstanding a
Lender's sale of a participation interest, its obligations hereunder shall
remain unchanged. The Borrower, the Agent, and the other Lenders shall continue
to deal solely and directly with such Lender. No participant shall have rights
to approve any amendment or waiver of this Credit Agreement except to the extent
such amendment or waiver would (i) increase the Commitments of the Lender from
whom the participant purchased its participation interest; (ii) reduce the
principal of, or rate or amount of interest on the Loans subject to such
participation, (iii) postpone any date fixed for any payment of principal of, or
interest on, the Loans subject to the participation interest, and (iv) release
any guarantor of the Obligations or all or a substantial portion of the
Collateral, other than when otherwise permitted hereunder.
11.9 Confidentiality. Each Lender agrees that it will use its
reasonable best efforts not to disclose without the prior written consent of the
Borrower any information with respect to the Borrower or any of its Subsidiaries
which is furnished pursuant to this Credit Agreement and which is designated by
the Borrower to the Lenders in writing as confidential, provided that any Lender
may disclose any such information (a) to its employees, auditors, or counsel, or
to another Lender if the disclosing Lender or such disclosing Lender's holding
or parent company in its sole discretion determines that any such party should
have access to such information, (b) as has
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become generally available to the public, (c) as may be required or appropriate
in any report, statement or testimony submitted to any Governmental Authority
having or claiming to have jurisdiction over such Lender, (d) as may be required
or appropriate in response to any summons or subpoena or in connection with any
litigation, (e) in order to comply with any Requirement of Law, and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or any
interest therein by such Lender.
11.10 Indemnification; Reimbursement of Expenses of Collection. The
Borrower hereby indemnifies and agrees to defend and hold harmless the Agent,
the Issuing Bank and each of the Lenders and their respective directors,
officers, agents, employees and counsel from and against any and all losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred by
any of them (except to the extent that it is finally judicially determined to
have resulted from their own gross negligence or willful misconduct) arising out
of or by reason of (a) any litigation, investigations, claims or proceedings
which arise out of or are in any way related to (i) this Credit Agreement or the
transactions contemplated thereby, (ii) the issuance of the Letters of Credit,
(iii) the failure of the Issuing Bank to honor a drawing under any Letter of
Credit, as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, (iv)
any actual or proposed use by the Borrower of the proceeds of the Loans or (v)
the Agent's or the Lenders' entering into this Credit Agreement, the other
Credit Documents or any other agreements and documents relating hereto,
including, without limitation, amounts paid in settlement, court costs and the
fees and disbursements of counsel incurred in connection with any such
litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing, and (b) any remedial or other action taken
by the Borrower or any of the Lenders in connection with compliance by the
Borrower or any of its Subsidiaries, or any of their respective properties, with
any federal, state or local environmental laws, acts, rules, regulations,
orders, directions, ordinances, criteria or guidelines. In addition, the
Borrower shall, upon demand, pay to the Agent and any Lender all costs and
expenses (including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Agent or such Lender in (i) enforcing or
defending its rights under or in respect of this Credit Agreement, the other
Credit Documents or any other document or instrument now or hereafter executed
and delivered in connection herewith, (ii) in collecting the Loans, (iii) in
foreclosing or otherwise collecting upon the Collateral or any part thereof and
(iv) obtaining any legal, accounting or other advice in connection with any of
the foregoing.
11.11 Amendments and Waivers. No amendment or waiver of any provision
of this Credit Agreement, any part of Schedule B, or any other Credit Document
shall be effective unless in writing and signed by the Majority Lenders (or by
the Agent on their behalf), except that:
(a) the consent of all the Lenders is required to (i) increase
the Commitments, (ii) reduce the principal of, or interest on, the Notes, any
Letter of Credit reimbursement obligations or any Fees hereunder (other than
Fees that are exclusively for the account of the Agent or the Issuing Bank),
(iii) postpone any date fixed for any payment in respect of principal of, or
interest on, the Notes, any Letter of Credit reimbursement obligations or any
Fees hereunder, (iv) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Majority Lenders to take any action
hereunder, (v) amend or
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waive this Section 11.11(a), or change the definition of Majority Lenders, (vi)
subject to the provisions of Section 2.3(b)(ii), increase the advance rates
provided for in the definition of "Borrowing Base," or (vii) except as otherwise
expressly provided in Section 8.12 or elsewhere in this Credit Agreement, and
other than in connection with the financing, refinancing, sale or other
disposition of any asset of the Borrower permitted under this Credit Agreement,
release any Liens in favor of the Lenders on any of the Collateral; and
(b) the consent of the Agent or the Issuing Bank, as the case
may be, shall be required for any amendment, waiver or consent affecting the
rights or duties of the Agent or the Issuing Bank under any Credit Document, in
addition to the consent of the Lenders otherwise required by this Section.
The consent of the Borrower shall not be required for any amendment,
modification or waiver of the provisions of Article 10 (other than Section
10.8). The Borrower and the Lenders hereby authorize the Agent to modify this
Credit Agreement by unilaterally amending or supplementing Annex I to reflect
assignments of the Commitments. Notwithstanding the foregoing, the Borrower may
amend Schedule B, Parts 6.1, 6.10, and 6.14, without the consent of the Majority
Lenders.
11.12 Counterparts and Effectiveness. This Credit Agreement and any
waiver of amendment hereto may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. This Credit Agreement shall become
effective on the date on which all of the parties hereto shall have signed a
copy hereof (whether the same or different copies) and shall have delivered the
same to the Agent pursuant to Section 11.7 or, in the case of the Lenders, shall
have given to the Agent written, telecopied or telex notice (actually received)
at such office that the same has been signed and mailed to it.
11.13 Severability. In case any provision in or obligation under this
Credit Agreement or the Notes or the other Credit Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby.
11.14 Maximum Rate. Notwithstanding anything to the contrary contained
elsewhere in this Credit Agreement or in any other Credit Document, the
Borrower, the Agent and the Lenders hereby agree that all agreements among them
under this Credit Agreement and the other Credit Documents, whether now existing
or hereafter arising and whether written or oral, are expressly limited so that
in no contingency or event whatsoever shall the amount paid, or agreed to be
paid, to the Agent or any Lender for the use, forbearance, or detention of the
money loaned to the Borrower and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any
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such circumstance any Lender should ever receive anything of value deemed
interest by applicable law which would exceed the Highest Lawful Rate, such
excessive interest shall be applied to the reduction of the principal amount
then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the Borrower. All
sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the Obligations and other Indebtedness of the
Borrower to the Agent or any Lender, to the extent permitted by applicable law,
shall be amortized, prorated, allocated and spread throughout the full term of
such Indebtedness, until payment in full thereof, so that the actual rate of
interest on account of all such Indebtedness does not exceed the Highest Lawful
Rate throughout the entire term of such Indebtedness. The terms and provisions
of this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrower, the Agent and the Lenders.
11.15 Term of Agreement. This Agreement shall have a term expiring on
the Expiration Date (i.e., the seventh anniversary of the Prior Closing Date);
provided, however, in the event that no Event of Default shall have occurred and
be continuing on such initial Expiration Date, then the Borrower may elect to
extend the term of this Agreement for one (1) year, and the Expiration Date
shall be the eighth anniversary date of the date of the Prior Closing Date, upon
the delivery by the Borrower to the Agent of the 90 days' prior written notice
of such election.
11.16 Entire Agreement; Successors and Assigns. This Credit Agreement
and the other Credit Documents constitute the entire agreement among the
Borrower, the Agent, and the Lenders, supersedes any prior agreements among
them, and shall bind and benefit the Borrower, and the Lenders and their
respective successors and permitted assigns.
11.17 Survival. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement, the Notes and
the other Credit Documents, the making of the Loans and issuance of the Letters
of Credit hereunder. Notwithstanding anything in this Agreement, any other
Credit Document or implied by law to the contrary, all indemnities set forth
herein, including, without limitation, in Sections 3.10, 4.6, 4.13(d), 4.14 (to
the extent provided therein), 4.15, 10.6 and 11.10, shall survive the payment of
the Obligations and the termination of the Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWER:
MOBILE MINI, INC.
a Delaware corporation
By:
Xxxxx Xxxxxxxxxxxx, Chief Financial Officer
AGENT:
BT COMMERCIAL CORPORATION
By:
Title:
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LENDERS:
BT COMMERCIAL CORPORATION
By:
Title:
BANK OF AMERICA, N.A.
By:
Title:
DEUTSCHE FINANCIAL SERVICES CORPORATION
By:
Title:
SUMMIT COMMERCIAL/GIBRALTAR
CORP.
By:
Title:
BANK ONE ARIZONA, N.A.
By:
Title:
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LASALLE BUSINESS CREDIT, INC.
By:
Title:
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ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Revolving Credit Term Commitment
Name and Address of Lender Commitment
BT COMMERCIAL CORPORATION $20,000,000.00 $1,944,444.48
Domestic Lending Office:
BT Commercial Corporation
00 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Eurodollar Lending Office:
BT Commercial Corporation
00 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Address for Notices:
BT Commercial Corporation
00 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
BANK OF AMERICA, N.A. (fka NATIONSBANK, N.A.) $20,000,000.00 $972,222.23
Domestic Lending Office:
Bank of America, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Eurodollar Lending Office:
Bank of America, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Address for Notices:
Bank of America, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
EXHIBIT A-1 -- Page 1
79
Revolving Credit Term Commitment
Name and Address of Lender Commitment
DEUTSCHE FINANCIAL SERVICES CORPORATION $20,000,000.00 $972,222.23
Domestic Lending Office:
Deutsche Financial Services Corporation
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Regional Vice President
Eurodollar Lending Office:
Deutsche Financial Services Corporation
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Regional Vice President
Address for Notices:
Deutsche Financial Services Corporation
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Regional Vice President
SUMMIT COMMERCIAL/GIBRALTAR CORP. $20,000,000.00
Domestic Lending Office:
Summit Commercial/Gibraltar Corp.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
Eurodollar Lending Office:
Summit Commercial/Gibraltar Corp.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
Address for Notices:
Summit Commercial/Gibraltar Corp.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
EXHIBIT A-1 -- Page 2
80
Revolving Credit Term Commitment
Name and Address of Lender Commitment
BANK ONE ARIZONA, N.A. $20,000,000.00 $972,222.23
Domestic Lending Office:
Bank One Arizona, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
Eurodollar Lending Office:
Bank One Arizona, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
Address for Notices:
Bank One Arizona, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
LASALLE BUSINESS CREDIT, INC. $20,000,000.00 $972,222.23
Domestic Lending Office:
LaSalle Business Credit, Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Eurodollar Lending Office:
LaSalle Business Credit, Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
EXHIBIT A-1 -- Page 3
81
Revolving Credit Term Commitment
Name and Address of Lender Commitment
Address for Notices:
LaSalle Business Credit, Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
EXHIBIT A-1 -- Page 4
