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EXHIBIT 4.1
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 28,
2001 is entered into by and among XxXXXXX RENTCORP, a California corporation
(the "Borrower"), the banks listed on the signature pages hereof (individually a
"Bank" and collectively "Banks"), and UNION BANK OF CALIFORNIA, N.A., as agent
(the "Agent") for Banks.
Recitals
A. The parties hereto desire to amend and restate that certain Amended and
Restated Credit Agreement dated as of June 30, 1999 by and among the Borrower,
Banks and Agent, as agent for Banks (the "Existing Agreement").
B. In consideration of the mutual covenants and agreements contained
herein, the parties hereto agree to amend and restate the Existing Agreement as
follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Active Subsidiary" means any Subsidiary which owns any material
assets or is engaged in any operations or business.
"Adjusted Borrowing Base" means the excess, if any, of (a) the
Borrowing Base over (b) Outside Debt.
"Adjusted Net Income" means for any period of four (4) consecutive
fiscal quarters, determined as of the last day of such period, the sum of (a)
Net Income, (b) provision for income taxes, (c) interest expense, (d)
depreciation, (e) amortization, and (f) minority interest in the Net Income of
any Subsidiary, and minus minority interest in the Net Loss of any Subsidiary.
"Affiliate" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (and the correlative terms,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
"Agreement" means this Amended and Restated Credit Agreement as
originally executed and as the same may from time to time be amended,
supplemented or restated.
"Applicable Law" means, with respect to any Bank at any time, the Law
of any jurisdiction applicable to Loans made by such Bank to Borrower hereunder,
including, without limitation, Laws prescribing the maximum rates of interest on
loans and extensions of credit.
"Applicable Margin" means the percentage to be added to a Rate Option
in determining the rate of interest applicable to a Loan, as set forth in
Section 2.3 hereof.
"Authorized Officer" means the President, or Senior Vice President,
or Chief Financial Officer of Borrower.
"Bank" means, individually, Union Bank of California, N.A., First
Union National Bank, Comerica Bank - California, Bank of America, N.A., Xxxxx
Fargo Bank, N.A., and their respective successors, and such other banks as may
become party to this Agreement, collectively referred to herein as "Banks."
"Borrowing Base" means, at any time and from time to time, an amount
equal to seventy-five percent (75%) of Borrower's Eligible Equipment.
"Business Day" means any day other than a Saturday or Sunday on which
national banks are generally open for business in San Francisco, California and,
with respect to Eurodollar Loans, such a day on which dealings in foreign
currencies and exchange are also carried on in the interbank Eurodollar market.
"Capitalized Lease Obligations" means any and all lease obligations
that, in accordance with GAAP, are required to be capitalized on the books of a
lessee.
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"Commercial Account" means Borrower's deposit account number
001-201-6481 at the office of Agent.
"Commitment" means, subject to the terms and conditions of this
Agreement, and adjusted from time to time in accordance therewith, the
obligation of Banks to make Loans to Borrower in the aggregate principal amount
outstanding at any time not to exceed One Hundred Twenty Million Dollars
($120,000,000).
"Commitment Fee" means the commitment fee payable by Borrower
pursuant to and as provided in Section 3.7.
"Compliance Certificate" means a certificate in the form of Exhibit
"A" to be delivered to Agent in accordance with Section 7.3(c).
"Debt" means, with respect to Borrower, the aggregate amount of,
without duplication, (a) all obligations for borrowed money, including, without
limitation, the Loans, and Real Property Debt, (b) all obligations evidenced by
bonds, other than assessment and other special bonds associated with real
property holdings, debentures, notes or other similar instruments, (c) all
Capitalized Lease Obligations, (d) all obligations or liabilities of others
secured by a Lien on any asset of Borrower, whether or not such obligation or
liability is assumed, and (e) all obligations or liabilities of Borrower,
whether direct or indirect, contingent or otherwise, with respect to the
obligations or liability of another, including, without limitation, all
guaranties.
"Debt Service" means, determined as of the last day of a fiscal
quarter, the sum of (a) all payments of principal on Debt (excluding any Loans)
scheduled to become due or to be made during the succeeding period of four (4)
consecutive quarters, (b) the amount outstanding under all Loans divided by two
and one-half (2.50), and (c) the actual aggregate amount of interest on Debt
(including any Loans) accrued during the period of four (4) consecutive quarters
then ended.
"Default" means any event that with the giving of notice or passage
of time, or both, would be an Event of Default.
"Dollars and $" means United States dollars or such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts in the United States.
"EBIT" means, for any period of four (4) consecutive fiscal quarters,
determined as of the last day of such period, the sum of (a) Net Income, (b)
provision for income taxes, (c) interest expense, and (d) minority interest in
the Net Income of any Subsidiary, and minus minority interest in the Net Loss of
any Subsidiary.
"EBITDA" means, for any period of four (4) consecutive fiscal
quarters, determined as of the last day of such period, EBIT minus non-cash
items of income and extraordinary income and expense, plus (a) depreciation, (b)
amortization expense, and (c) other non-cash charges.
"Effective Date" means June 28, 2001, provided that all conditions
precedent specified in Section 5.1 have been satisfied and that satisfaction of
such conditions precedent has been confirmed by written notice delivered by the
Agent to Borrower and Banks.
"Eligible Assignee" means (a) any Bank and any Affiliate of any Bank,
and (b) any commercial bank, savings and loan association, savings bank, finance
company, insurance company, mutual fund or other financial institution, fund or
investor or other Person which has been approved in writing as an Eligible
Assignee for purposes of this Agreement by both Agent and, unless an Event of
Default has occurred and is continuing, the Borrower, as provided in Section
11.20. Notwithstanding anything to the contrary in this Agreement, in no event
shall any Person that is primarily engaged in a business in competition with
Borrower, or any Affiliate of such Person, be an Eligible Assignee.
"Eligible Equipment" means equipment which is an asset of Borrower
designated as "Rental Equipment, net" on Borrower's most recent financial
statements, in accordance with GAAP, or any substitute for such designation, and
which:
(a) is owned by Borrower free and clear of all Liens and rights of
others except Permitted Liens;
(b) is (i) permanently located in the United States of America, and
(ii) located outside of the United States of America, provided that the net book
value of equipment under clause (ii) may not exceed ten percent (10%) of the
total net book value of all equipment under clauses (i) and (ii); and
(c) is not, in the reasonable opinion of Agent, obsolete, unsalable,
unfit for use or otherwise unacceptable to Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, including any rules
or regulations issued in connection therewith and any successor statute.
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"Eurocurrency Reserve Percentage" means, with respect to each
Eurodollar Period, the percentage, as prescribed by the Federal Reserve Board,
for determining reserve requirements (including any marginal, supplemental or
emergency reserves) applicable to Eurocurrency liabilities pursuant to
Regulation D, or any other then applicable regulation of the Board of Governors
which prescribes reserve requirements applicable to 'Eurocurrency liabilities,'
as presently defined in Regulation D, in each case, as applicable to Agent. The
Interbank Rate (Reserve Adjusted) shall be adjusted automatically on the
effective date of any change in the Eurocurrency Reserve Percentage. For
purposes of this definition, any Eurodollar Loans hereunder shall be deemed to
be Eurocurrency liabilities. The Eurocurrency Reserve Percentage shall be
conclusive and binding, absent manifest error, even if estimated or projected.
"Eurodollar Loan" means any Loan which bears interest at a rate
determined with reference to the Interbank Rate (Reserve Adjusted).
"Eurodollar Period" means, with respect to any Eurodollar Loan, the
period commencing on the date specified by Borrower in a Loan Request and ending
one (1), two (2), three (3), six (6) or (if available to Banks) twelve (12)
months thereafter, as specified by Borrower in such Loan Request; provided that
(a) the first day of any Eurodollar Period shall be a Business Day;
(b) no Eurodollar Period for any Eurodollar Loan made prior to the
Termination Date shall extend beyond the Termination Date;
(c) no Eurodollar Period shall extend beyond a date when a principal
payment is due if the principal balance of the Loans after such payment will be
less than the aggregate Eurodollar Loans outstanding; and
(d) any Eurodollar Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding Business Day unless
such next succeeding Business Day falls in another calendar month, in which case
such Eurodollar Period shall end on the next preceding Business Day.
"Event of Default" means an event set forth in Article 9.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is
not published for any day which is a Business Day, the average of the quotations
at approximately 10:00 a.m. San Francisco time for such day on such transactions
received by Agent from three (3) federal funds brokers of recognized standing
selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any governmental authority succeeding to its functions.
"Funded Debt" means, as of any date of determination, the aggregate
amount of Debt of Borrower as defined in clauses (a), (b) and (c) of the
definition of Debt.
"Funded Debt/EBITDA Ratio" means, as of any date of determination,
the ratio of Borrower's Funded Debt as of such date, to Borrower's EBITDA for
the four (4) consecutive fiscal quarter period ended most recently prior to such
date.
"Funding Date" means the date of the funding of a Loan, including the
date a Loan is converted from a Loan with one Rate Option to a Loan with another
Rate Option.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Governmental Agency" means (a) any international, foreign, federal,
state, county or municipal government or political subdivision thereof, or (b)
any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, or (c) any court or
administrative tribunal.
"Interbank Rate" means, with respect to each Eurodollar Period, the
rate per annum determined by the Agent two (2) Business Days prior to the
beginning of such Eurodollar Period, at which the Agent is offered deposits in
dollars by major banks in the interbank eurodollar market at or about 11:00 a.m.
London time, for delivery on the first day of such Eurodollar Period, in an
amount and period equal to the amount of the Eurodollar Loan to be outstanding
during such Eurodollar Period.
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"Interbank Rate (Reserve Adjusted)" means, with respect to any
Eurodollar Loan for any Eurodollar Period, a rate per annum (rounded upwards, if
necessary, to the nearest one-hundredth of one percent (1/100 of 1%)) determined
pursuant to the following formula:
Interbank Rate
Interbank Rate (Reserve Adjusted) = -----------------------------------
1-Eurocurrency Reserve Percentage
"Law" means collectively all international, foreign, federal, state
and local statutes, treaties, rules, regulations, directives, ordinances,
policies, orders and codes.
"Liabilities" means the aggregate amount of all liabilities of
Borrower that would, in accordance with GAAP, be required to be set forth on a
balance sheet as liabilities, excluding deferred taxes.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, lien or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, affecting any asset of
Borrower, including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature of a security
interest, and/or the filing of or agreement to give any financing statement
(other than a financing statement which disclaims the existence of a security
interest and states that it is filed only as a precaution) under the Uniform
Commercial Code or comparable Law with respect to any asset of Borrower.
"Loan" means a Revolving Loan or, if the context requires, the
Revolving Loans.
"Loan Documents" means, collectively, this Agreement, the Notes, and
any and all other agreements, documents, instruments and certificates of any
type or nature heretofore or hereafter executed or delivered by Borrower to
Agent or Banks in any way relating to or in furtherance of this Agreement, and
each Continuing Guaranty executed and delivered by an Active Subsidiary, in each
case either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated or extended.
"Loan Request" means a written request by Borrower for a Loan,
substantially in the form of Exhibit "B", duly executed on Borrower's behalf and
properly completed to provide all information required to be included therein.
"Maximum Amount" means, with respect to each Loan by each Bank at any
time, the maximum amount of interest which, under Applicable Law, such Bank is
permitted to charge with respect to such Loan.
"Net Income" has the meaning ascribed to it in accordance with GAAP.
"Net Loss" has the meaning ascribed to it in accordance with GAAP.
"Notes" means, collectively, the Revolving Notes.
"Obligations" means all present and future obligations of every kind
or nature of Borrower or at any time and from time to time owed to Agent or
Banks or any one or more of them, under any one or more of the Loan Documents,
whether due or to become due, matured or unmatured, liquidated or unliquidated,
or contingent or non-contingent, including obligations of performance as well as
obligations of payment, and including interest that accrues after the
commencement of any proceeding under any debtor relief law by or against
Borrower.
"Officer's Certificate" means a certificate substantially in the form
of Exhibit "C", completed and duly executed by an Authorized Officer of
Borrower.
"Outside Debt" means all Debt other than Loans and Real Property
Debt.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Lien" has the meaning ascribed to it in Section 8.3.
"Person" means any individual or entity.
"Plan" means an employee pension or other benefit plan of Borrower
subject to Title IV of ERISA or to which Section 412 of the Internal Revenue
Code of 1954, as amended, applies, other than Borrower's Employee Stock
Ownership Plan as amended in existence as of the date of this Agreement.
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"Pro Rata Share" means, with respect to each Bank, the percentage set
forth next to that Bank's name as follows:
Bank Pro Rata Share
---- --------------
Union Bank of
California, N.A. 28.333333332%
First Union National Bank 21.666666667%
Bank of America, N.A. 16.666666667%
Comerica Bank - California 16.666666667%
Xxxxx Fargo Bank, N.A. 16.666666667%
"Rate Option" means one of the interest rate options available to
Borrower for the Loans as provided in Section 2.3.2, which are the Interbank
Rate (Reserve Adjusted) or Reference Rate.
"Real Property Debt" means Debt which is secured by any or all of
Borrower's real property holdings.
"Reference Rate" means, at any time, Agent's floating commercial loan
rate then most recently announced by Agent at San Francisco, California as its
prime or reference rate. Each change in the Reference Rate shall take effect
hereunder on the effective date of the change in such Reference Rate. The
Reference Rate is used as a reference point for pricing certain loans. Agent may
price its loans at, above or below the Reference Rate.
"Reference Rate Loan" means any Loan which bears interest at a rate
determined by reference to the Reference Rate.
"Regulation D" means Regulation D, as at any time amended, of the
Federal Reserve System, or any other regulation in substance substituted
therefor.
"Required Banks" means Banks having Pro Rata Shares at least
sixty-six and two-thirds percent (66-2/3%) of the Commitment or, if the
Commitment has been terminated, Banks holding at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate principal amount of outstanding Loans.
"Revolving Credit Facility" means the credit accommodation provided
to Borrower as more fully described in Section 2.1.
"Revolving Loan" means an extension of credit under the Revolving
Credit Facility in accordance with Section 2.1.
"Revolving Loan Commitment Period" means the period from and
including the date of this Agreement to, but not including, the Revolving Loan
Termination Date.
"Revolving Loan Termination Date" means the earlier of (a) the
Termination Date, or (b) the date Banks may terminate making Loans or accelerate
the due date of the Revolving Loans pursuant to the rights of Banks under
Article 9.
"Revolving Note" means each promissory note payable to a Bank
evidencing the Revolving Loans, substantially in the form set forth in Exhibit
"D", with appropriate insertions.
"Subsidiary" means any corporation at least the majority of whose
securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by Borrower and/or one or more Subsidiaries.
"Tangible Net Worth" means, with respect to Borrower, its assets as
determined in accordance with GAAP, minus (a) Liabilities and (b) all intangible
assets of Borrower, including, without limitation (i) all assets which should be
classified as intangible assets (such as goodwill, patents, trademarks,
copyrights, franchises, and deferred charges (including unamortized debt
discount and research and development costs)), (ii) treasury stock, (iii) cash
held in a sinking or other similar fund established for the purpose of
redemption or other retirement of capital stock, (iv) to the extent not already
deducted from total assets, reserves for depreciation, depletion, obsolescence
or amortization of properties and other reserves or appropriations of retained
earnings which have been or
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should be established in connection with the business conducted by Borrower, and
(v) any revaluation or other write-up in book value of assets subsequent to the
fiscal year of Borrower last ended at the date of this Agreement.
"Termination Date" means June 30, 2004.
1.2 Accounting Terms; Financial Tests. All accounting terms not
specifically defined in this Agreement shall be construed, and all financial
data and ratios required to be submitted pursuant to this Agreement shall be
prepared, in conformity with GAAP and on a consolidated basis for Borrower and
its Subsidiaries except as otherwise specifically provided in this Agreement. In
the event that GAAP changes during the term of this Agreement such that the
financial covenants contained herein would then be calculated in a different
manner or with different components, Borrower and Banks agree to amend this
Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
criteria as were effective prior to such change in GAAP.
1.3 Exhibits and Schedules. All Exhibits and Schedules to this Agreement,
either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference.
1.4 Miscellaneous Terms. All terms defined in this Agreement shall be
applicable to both the singular and plural forms thereof, as the context
requires. The term "or" is disjunctive; the term "and" is conjunctive. The term
"shall" is mandatory; the term "may" is permissive. The term "including" is by
way of example and not limitation. Terms not otherwise expressly defined herein
shall have the meaning ascribed to them in the California Uniform Commercial
Code, if applicable.
ARTICLE 2
THE CREDITS
2.1. Revolving Loan Facility.
2.1.1 General. Subject to the terms and conditions of this Agreement,
at any time and from time to time, during the Revolving Loan Commitment Period,
each Bank severally, and not jointly, according to its Pro Rata Share, agrees to
make Revolving Loans to Borrower in such amounts as Borrower may request that do
not exceed in the aggregate at any one time outstanding the amount of such
Bank's Pro Rata Share of the lesser of the Commitment or the Adjusted Borrowing
Base. Subject to the terms and conditions of this Agreement, Borrower may
borrow, repay and reborrow, in whole or in part, under the Revolving Credit
Facility at any time prior to the Revolving Loan Termination Date. The Revolving
Loans and all amounts owing with respect thereto shall be due and payable on the
Revolving Loan Termination Date. No Bank shall be responsible for any default by
any other Bank in such other Bank's obligation to make a Revolving Loan
hereunder, nor shall the Pro Rata Share of any Bank be increased or decreased as
a result of the default by any other Bank in such other Bank's obligation to
make a Revolving Loan hereunder.
2.1.2 Revolving Notes. The Revolving Loans shall be evidenced by a
Revolving Note for each Bank in the principal amount of such Bank's Pro Rata
Share of the Commitment. Each Bank is hereby authorized to record the amount and
type of each Revolving Loan made by such Bank and the date and the amount of
each payment or prepayment of principal thereof on the schedule annexed to its
Revolving Note, or on its books and records, and any such recordation shall, in
the absence of manifest error, constitute prima facie evidence of the accuracy
of the information so recorded; provided, however, that failure by a Bank to
make any such recordation on its Revolving Note or on its books and records
shall not affect any of the Obligations of Borrower under such Revolving Note or
this Agreement.
2.2. [Intentionally Omitted]
2.3 Interest on Loans. The Loans shall bear interest at a rate per annum
equal to the lesser of (a) the sum of (i) the Applicable Margin plus (ii) the
Rate Option(s) specified by Borrower pursuant to a Loan Request, and (b) the
Maximum Amount; provided, however, that interest on overdue payments shall bear
interest in accordance with Section 2.3.3.
2.3.1. General. Interest on the outstanding principal balance of the
Loans shall accrue daily from the date of each Loan until payment in full.
2.3.2. Rate Options and Applicable Margins. The Rate Options and
Applicable Margins for Loans shall be determined based upon the type of Loan and
the current Funded Debt/EBITDA Ratio, as set forth in the table below:
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Type of Loan/ Funded Debt/ Applicable Margin on
Rate Option EBITDA Ratio Revolving Loans
------------ ------------ --------------------
EURODOLLAR LOANS/ Equal to or greater 1.45%
INTERBANK RATE than 2.25 to 1.00
(RESERVE ADJUSTED):
Equal to or greater 1.30%
than 1.75 to 1.00 but
less than 2.25 to 1.00
Equal to or greater 1.15%
than 1.25 to 1.00 but
less than 1.75 to 1.00
Less than 1.25 to 1.00 1.00%
REFERENCE RATE LOANS
/REFERENCE RATE: [Not applicable] 0.00%
The Applicable Margin shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of Borrower as measured by the Funded Debt/EBITDA Ratio for the
immediately preceding fiscal quarter of Borrower. Any such increase or reduction
in the Applicable Margin shall be effective on the next Business Day after
receipt by Agent of the applicable financial statements and the corresponding
Compliance Certificate. If the financial statements and the Compliance
Certificate of Borrower setting forth the Funded Debt/EBITDA Ratio is not
received by the Agent by the date required pursuant to this Agreement, the
Applicable Margin shall be determined as if the Funded Debt/EBITDA Ratio exceeds
2.25 to 1.00, commencing on the date when Borrower's time to deliver such
financial statements and Compliance Certificate shall have expired and
continuing until such time as such financial statements and Compliance
Certificate are received and any Event of Default resulting from a failure to
timely deliver such financial statements or Compliance Certificate has been
waived in writing by the Required Banks.
2.3.3. Interest on Overdue Payments. Overdue payments of principal
(and of interest to the extent permitted by law) on the Loans shall bear
interest at a fluctuating rate per annum equal to the lesser of (i) the
Reference Rate plus two percent (2%) or (ii) the Maximum Amount until such
unpaid amount has been paid in full (whether before or after judgment). All
interest provided for in this Section 2.3.3 shall be compounded monthly and
payable on demand.
2.3.4. Computation. Interest shall be computed for the actual number
of days elapsed on the basis of a year consisting of 360 days from, and
including, the first day of a Loan, but excluding, the last day thereof.
2.4 Procedure for Loans.
2.4.1 General. Borrower shall deliver to Agent an irrevocable Loan
Request (i) no later than 10:00 a.m. San Francisco time on the proposed Funding
Date of any Reference Rate Loan, and (ii) at least three (3) Business Days prior
to the Revolving Loan Termination Date or the proposed Funding Date of any
Eurodollar Loan. Each Loan Request shall specify:
(a) the Funding Date of such Loan, which shall be a Business
Day;
(b) the amount of such Loan;
(c) the Rate Option(s) selected for such Loan; and
(d) if applicable, the Eurodollar Period(s) therefor.
If Borrower shall fail to specify a Rate Option, such Loan shall be made as a
Reference Rate Loan. If Borrower shall fail to specify a Eurodollar Period with
respect to a proposed Eurodollar Loan, Borrower shall be deemed to have elected
a Eurodollar Period of one (1) month's duration.
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2.4.2. Alternate Procedure. Alternatively, on any Business Day, an
Authorized Officer , may give Agent telephonic notice of the proposed Loan
within the notice periods, and specifying the information, required in Section
2.4.1, provided that (a) an Authorized Officer may designate any other person to
provide such telephonic notice for a specific period of time by delivering to
Agent by telecopy a copy of such person's authorization to give telephonic
notice of the proposed Loan within the notice periods, which authorization must
be signed by an Authorized Officer, and (b) such telephonic notice of the
proposed Loan shall be confirmed in writing by delivery to Agent of a Loan
Request signed by an Authorized Officer no later than the third day after such
telephonic notice. All such telephonic notices shall be irrevocable. Neither
Agent nor Bank shall incur any liability to Borrower in acting upon any such
telephonic notice that Agent believes in good faith to have been given by a
person duly authorized to give such notice on behalf of Borrower or for
otherwise acting in good faith under this Section 2.4.2.
2.4.3. Extensions and Conversions. Subject to the terms and
conditions of this Agreement, Borrower may continue a Rate Option for any
Eurodollar Loan, or convert any Loan into a different Rate Option by complying
with the provisions of Section 2.4.1 or 2.4.2 in the same manner as if Borrower
were requesting a new Loan; provided, however, that Eurodollar Loans may be
converted without penalty only on the last day of the applicable Eurodollar
Period.
2.4.4. Minimum Amount of Revolving Loans. Loan Requests for Revolving
Loans shall be in one or the other of the following minimum amounts, as the case
may be, with integral multiples of Twenty-five Thousand Dollars ($25,000) in
excess of such minimum amounts:
(a) for a Reference Rate Loan, a minimum amount of Four
Hundred Thousand Dollars ($400,000); and
(b) for a Eurodollar Loan, a minimum amount of One Million
Dollars ($1,000,000).
2.4.5. Minimum Payment of Revolving Loans. The Company shall have the
right to prepay the Revolving Loans in whole or in part in minimum principal
amounts equal to at least One Hundred Thousand Dollars ($100,000) and in
integral multiples of Twenty-five Thousand Dollars ($25,000) in excess of such
minimum amount.
2.5. Funding of Loans.
(a) Promptly after receipt of a Loan Request (or telephonic notice
thereof), Agent shall notify each Bank of the amount of the proposed Loan, the
Pro Rata Share of such Bank, and the Rate Option and (if applicable) Eurodollar
Period selected by Borrower therefor.
(b) In the case of Revolving Loans, each Bank shall make the amount
of its Loan available to Agent, in same day funds, at the office of Agent
specified on the signature pages of this Agreement no later than noon San
Francisco time on the Funding Date. Agent shall make the proceeds of such Loans
available to Borrower on such Funding Date by causing an amount of same day
funds equal to the proceeds of all such Loans received by Agent to be credited
to Borrower's Commercial Account no later than 2:00 p.m. San Francisco time on
the Funding Date.
2.6. Non-Receipt of Funds by Agent. Unless the Borrower or a Bank, as the
case may be, notifies Agent prior to the date on which it is scheduled to make
payment to Agent of (a) in the case of a Bank, the proceeds of a Loan or (b) in
the case of the Borrower, a payment of principal, interest or fees to Agent for
the account of Banks, that it does not intend to make such payment, Agent may
assume that such payment has been made. Agent may, but shall not be obligated
to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If such Bank or the Borrower, as the case may be,
has not in fact made such payment to Agent, the recipient of such payment shall,
on demand by Agent, repay to Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
such amount was so made available by Agent until the date Agent recovers such
amount at a rate per annum equal to (a) in the case of repayment by a Bank, the
Federal Funds Effective Rate for such day or (b) in the case of repayment by the
Borrower, the interest rate applicable to the relevant Loan.
2.7. Reduction or Termination of the Commitment. Upon not less than three
Business Days' notice to the Agent at any time, and from time to time, Borrower
may, at any time permanently reduce the amount of the Commitment in increments
of One Million Dollars ($1,000,000) or integral multiples thereof; provided,
however, that the Commitment may not be reduced to an amount less than the
amount of the then outstanding Loans. Except as expressly provided in this
Section 2.7, the Commitment may not be adjusted by Borrower.
9
ARTICLE 3
PAYMENTS AND FEES
3.1. Revolving Loans.
3.1.1. Interest. Interest accrued on each Revolving Loan shall be
payable in arrears (a) if a Reference Rate Loan, monthly on the last Business
Day of each calendar month, or (b) if a Eurodollar Loan, on the last day of the
Eurodollar Period and, if such Eurodollar Period is in excess of three (3)
months, each three (3) month anniversary of the commencement of such Eurodollar
Period. Such interest payments shall commence on the first such day after the
Effective Date and continue through the Revolving Loan Termination Date, on
which date all accrued and unpaid interest shall be due and payable in full.
3.1.2. Principal. If not sooner paid, the principal indebtedness
evidenced by the Revolving Notes shall be due and payable as follows:
(a) the principal amount of each Eurodollar Loan shall be
converted, extended or due and payable on the last day of the Eurodollar Period
for such Loan;
(b) the amount, if any, by which the principal indebtedness
evidenced by the Revolving Notes at any time exceeds the Commitment shall be due
and payable immediately; and
(c) in any event, the principal indebtedness evidenced by the
Revolving Notes shall be due and payable on the Revolving Loan Termination Date.
3.2. [Intentionally Omitted]
3.3. Optional Repayment. Any prepayment of all or any part of any
Eurodollar Loan on a day other than the last day of the applicable Eurodollar
Period shall be subject to Section 4.1.4, as applicable, and Borrower shall pay
Banks all amounts due as therein provided.
3.4. Mandatory Prepayments. If at any time the aggregate principal amount
of the Loans outstanding exceeds the lesser of the Commitment or the Adjusted
Borrowing Base, as each is then in effect, Borrower shall immediately upon
demand by Agent prepay an amount equal to such excess. The provisions of Section
3.3 shall also apply to mandatory prepayments pursuant to this Section 3.4.
3.5. Payments. All payments hereunder shall be made, irrespective of and
without condition or deduction for any counterclaim, defense, recoupment or
setoff, in Dollars and in immediately available funds and shall be made prior to
10:00 a.m. San Francisco time on the date of the scheduled payment to Agent at
its office set forth on the signature pages of this Agreement. All payments
received after 10:00 a.m. San Francisco time shall be considered to have been
received the next Business Day. Any payment which falls on a non-Business Day
shall be rescheduled to the next succeeding Business Day and interest shall
continue to accrue to such Business Day. Agent shall promptly after receipt of
each payment cause to be distributed like funds relating to the payment of
principal, interest, or fees ratably to each Bank for its account, in each case
to be applied in accordance with, and subject to, the terms of this Agreement,.
3.6. Facility Fee. Borrower shall pay to Agent upon execution of this
Agreement a facility fee in the amount of $180,000, to be distributed among
Banks in accordance with their respective Pro Rata Shares.
3.7. Commitment Fee. Borrower shall pay to Agent from time to time, for
distribution to each Bank in proportion to that Bank's Pro Rata Share,
commitment fees (the "Commitment Fee") at the rate per annum shown in the table
below which corresponds to the current Funded Debt/EBITDA Ratio, applied to the
average daily unused Commitment, computed for the actual number of days elapsed
on the basis of a year consisting of 360 days for the period from and including
the date of this Agreement to and including the Revolving Loan Termination Date,
payable in arrears (i) in quarterly installments on the last Business Day of
each March, June September and December commencing on the first such date to
occur after the Effective Date, and (ii) on the Termination Date or the date on
which the Commitment is terminated in full pursuant to Section 2.7 or Section
9.2.
FUNDED DEBT/ COMMITMENT FEE
EBITDA RATIO PERCENTAGE
------------ ---------------
Equal to or greater than 2.25 to 1.00 0.30%
10
Equal to or greater than 1.75 to 1.00 0.25%
but less than 2.25 to 1.00
Equal to or greater than 1.25 to 1.00 0.20%
but less than 1.75 to 1.00
Less than 1.25 to 1.00 0.15%
The applicable Commitment Fee percentage shall be subject to reduction or
increase, as applicable and as set forth in the table above, on a quarterly
basis according to the performance of Borrower as measured by the Funded
Debt/EBITDA Ratio for the immediately preceding fiscal quarter of Borrower. Any
such increase or reduction in the Commitment Fee percentage shall be effective
on the next Business Day after receipt by Agent of the applicable financial
statements and the corresponding Compliance Certificate. If the financial
statements and the Compliance Certificate of Borrower setting forth the Funded
Debt/EBITDA Ratio is not received by the Agent by the date required pursuant to
this Agreement, the Commitment Fee percentage shall be determined as if the
Funded Debt/EBITDA Ratio exceeds 2.25 to 1.00, commencing on the date when
Borrower's time to deliver such financial statements and Compliance Certificate
shall have expired and continuing until such time as such financial statements
and Compliance Certificate are received and any Event of Default resulting from
a failure to timely deliver such financial statements or Compliance Certificate
has been waived in writing by the Required Banks.
3.8. Agent's Fee. Borrower shall pay Agent, for Agent's own account, an
agent fee in an amount and on the terms as mutually agreed between Agent and
Borrower.
ARTICLE 4
ADDITIONAL PROVISIONS RELATING TO
EURODOLLAR LOANS AND CAPITAL ADEQUACY
4.1. Eurodollar Loans.
4.1.1. Eurodollar Increased Cost. If, as a result of the adoption or
application of any Law, or any change therein, or in the interpretation,
administration or application thereof, including Regulation D, or compliance by
any Bank with any request or directive (whether or not having the force of law)
from any court or Governmental Agency, central bank or comparable authority or
instrumentality:
(a) the basis of taxation of payments to any Bank of the
principal of or interest on any Eurodollar Loan (other than income, franchise or
similar taxes imposed on the gross or net income of a Bank) is changed;
(b) any reserve, special deposit, minimum capital, capital
ratio or similar requirements against assets of, deposits with or for the
account of, credit extended by, or Commitment of, any Bank is imposed, modified
or deemed applicable; or
(c) any other condition affecting this Agreement, the
Eurodollar Loans or Commitment is imposed on any Bank or the interbank
eurodollar market;
and any Bank determines that, by reason thereof, the cost to such Bank of making
or maintaining any of the Eurodollar Loans is increased, or the amount of any
sum receivable by such Bank hereunder in respect of any of the Eurodollar Loans
is reduced; then, Borrower shall pay to such Bank within two (2) Business Days
after demand (which demand shall be accompanied by a statement setting forth the
basis for the calculation thereof but only to the extent not theretofore
provided to Borrower, a copy of which shall be delivered to Agent) such
additional amount or amounts as will compensate such Bank for such additional
cost or reduction (provided such amount has not been compensated for in the
calculation of the Eurocurrency Reserve Percentage). Determinations by a Bank
for purposes of this Section 4.1.1 of the additional amounts required to
compensate such Bank in respect of the foregoing circumstances shall be
conclusive, absent manifest error.
4.1.2. Eurodollar Deposits Unavailable or Interest Rate
Unascertainable. If any Bank determines (which determination shall be conclusive
and binding on Borrower) that deposits of the necessary amount for a Eurodollar
Period are not available to such Bank in the interbank Eurodollar market or
that, by reason of circumstances affecting such market, adequate and reasonable
means do not exist for ascertaining the Interbank Rate applicable to such
Eurodollar Period, such Bank shall promptly give notice of such determination to
Borrower and, thereupon, any Loan Request with respect to new Eurodollar Loan(s)
previously given by Borrower and not yet borrowed or converted shall be deemed a
Loan Request to make a Reference Rate Loan in the amount of the requested
11
Eurodollar Loan(s) and Borrower shall be obligated to convert any outstanding
Eurodollar Loan(s) to Reference Rate Loans on the last day of the then current
Eurodollar Period(s) with respect thereto.
4.1.3. Changes in Law Affecting Eurodollar Loans. If at any time
after the date of this Agreement due to any new Law, or any interpretation
thereof by any Governmental Agency or other regulatory authority charged with
the administration thereof, or for any other reason arising subsequent to the
date hereof, it shall become unlawful for any Bank to fund any Eurodollar Loan
which it is committed to make hereunder, the obligation of such Bank to provide
Eurodollar Loans shall, upon the happening of such event, forthwith be suspended
for the duration of such illegality. If any such change shall make it unlawful
for any Bank to continue Eurodollar Loans previously made by it hereunder, such
Bank shall, upon the happening of such event, notify Borrower stating the
reasons therefor, and Borrower shall, on the earlier of (a) the last day of the
then current Eurodollar Period or (b) if required by such Law or interpretation,
on such date as shall be specified in such notice, convert such unlawful
Eurodollar Loans to Reference Rate Loans.
4.1.4. Eurodollar Loan Indemnity. Borrower agrees to indemnify each
Bank and shall hold each Bank harmless from any loss, cost, damage or expense
which such Bank may sustain or incur as a consequence of:
(a) any failure by Borrower to borrow, continue or convert a
Eurodollar Loan on a date specified in a Loan Request;
(b) a payment, prepayment or conversion of a Eurodollar Loan
on a day which is not the last day of the Eurodollar Period with respect
thereto; and
(c) the acceleration of the obligations pursuant to Section
9.2, in each case including any such loss, cost, damage or expense arising from
interest, fees or other charges payable by such Bank to lenders of funds
obtained by it in order to make or maintain such Eurodollar Loan hereunder.
Borrower shall pay within two (2) Business Days after demand (which demand shall
be accompanied by a statement setting forth such Bank's calculation thereof, a
copy of which shall be delivered to Agent) the amount due hereunder. Such
statement and calculation shall, in the absence of manifest error, be
conclusive. This covenant shall survive termination of this Agreement and
payment in full of the Notes.
4.2. Discretion as to Manner of Funding. Notwithstanding any provision of
this Agreement to the contrary, each Bank shall be entitled to fund and maintain
its funding of all or any part of the Eurodollar Loans in any manner it may
elect, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan during the Eurodollar Period for such Eurodollar
Loan through the purchase of deposits having a maturity corresponding to the
last day of such Eurodollar Period and bearing an interest rate equal to the
Interbank Rate for such Eurodollar Period. Any Bank may, if it so elects,
fulfill any commitment to make Eurodollar Loans by causing a foreign branch or
affiliate to make or continue such Eurodollar Loans at no additional cost to
Borrower, provided, however, that in such event such Loans shall be deemed for
the purposes of this Agreement to have been made by such Bank, and the
obligation of Borrower to repay such Loans shall nevertheless be to such Bank
and shall be deemed held by such Bank, to the extent of such Loans, for the
account of such branch or affiliate.
4.3. Capital Adequacy. If after the date hereof, the adoption or
application of any Law regarding capital adequacy of general applicability, or
any change therein, or any change in the interpretation or administration
thereof by any Governmental Agency, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank
with any request or directive regarding capital adequacy of general
applicability (whether or not having the force of law) of any such Governmental
Agency, central bank or comparable agency, has or would have the effect, of
reducing the rate of return on such Bank's capital to a level below that which
such Bank could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then such Bank may
increase the applicable interest rate(s) set forth in Section 2.3.2 above for
Loans from such Bank to compensate such Bank for such reduction in its rate of
return on capital. Such increase shall be effective thirty (30) days after
written notice thereof to Borrower; and such notice shall be accompanied by such
Bank's statement setting forth its calculations thereof, which shall, in the
absence of manifest error, be conclusive.
ARTICLE 5
CONDITIONS PRECEDENT
5.1. Conditions to Effectiveness of this Agreement. The amendment and
restatement of the Existing Agreement accomplished by this Agreement shall not
become effective until the following conditions precedent have been satisfied:
12
(a) Agent shall have received the following on or before the
Effective Date, each dated as of the Effective Date or such earlier date as
shall be acceptable to Agent, in form and substance satisfactory to Agent and
(except for the Revolving Notes) in sufficient copies for each Bank.
(i) Counterparts of this Agreement duly executed by Borrower,
Agent and each of the Banks.
(ii) Revolving Notes, duly executed by Borrower, one payable to
the order of each Bank.
(iii) a Continuing Guaranty in the form attached hereto as
Exhibit "E", executed by each Active Subsidiary and Agent.
(iv) Copies of the Articles of Incorporation and By-laws of
Borrower, together with all amendments thereto, to the extent such Articles or
By-laws have changed, or amendments thereto have been added, since such
documents were delivered to Agent in connection with the Existing Agreement.
(v) Copies, certified by the Secretary or an Assistant Secretary
of Borrower, of its Board of Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for Agent) authorizing Borrower
to execute, deliver and perform this Agreement and the other Loan Documents
executed or to be executed by Borrower and to consummate the transactions
contemplated hereby and thereby.
(vi) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of Borrower, which shall identify by name and title and bear
the specimen signatures of the officers of Borrower authorized on behalf of
Borrower to execute, deliver and perform this Agreement and the other Loan
Documents executed or to be executed by Borrower and to consummate the
transactions contemplated hereby and thereby.
(vii) A duly completed Officer's Certificate.
(viii) An opinion of legal counsel to Borrower and Active
Subsidiary, as to their legal existence, due authorization, execution and
delivery and enforceability of the Loan Documents to which each is a party, and
such other matters as Agent and the Banks may reasonably request.
(ix) Such other documents as Agent or its counsel may reasonably
request.
(b) The representations and warranties of Borrower contained in
Article 6 hereof and in the Officer's Certificate are true and correct as of the
Effective Date.
(c) Borrower shall have paid the Facility Fee to Agent for the
ratable benefit of Banks, and shall have reimbursed all attorneys' fees and
costs of counsel to Agent incurred in the preparation and negotiation of the
Loan Documents.
5.2. Each Loan. Banks shall not be required to make any Loan, or convert
or continue any Loan unless on the applicable Funding Date:
(a) There exists no Default or Event of Default.
(b) The representations and warranties contained in Article 6 are
true and correct as of such Funding Date, except to the extent that changes in
the facts and conditions on which such representations and warranties are based
are required or permitted under this Agreement.
(c) Borrower shall have delivered a Loan Request therefor.
(d) Borrower shall have furnished such other documents as Agent may
have reasonably requested.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce Banks to enter into this Agreement, Borrower makes the
following representations and warranties which shall survive the execution and
delivery of this Agreement and the Notes, and the making of the Loans:
13
6.1. Due Organization. Each of Borrower and its Active Subsidiaries is a
duly organized and validly existing corporation in good standing under the laws
of the jurisdiction in which it is incorporated, and is duly qualified to
conduct business as a foreign corporation in all jurisdictions where the failure
to do so would have a material or adverse effect on its respective business.
6.2. Subsidiaries. Borrower has no Subsidiaries as of the date of this
Agreement, except: Mobile Modular Management Corporation, Space-Co Corporation,
xXxxxXxxx.xxx, XxxXxxxx.xxx, Enviroplex, Inc., and eRentNetworks. Borrower has
no Active Subsidiaries as of the date of this Agreement except Enviroplex, Inc.
6.3. Requisite Power. Each of Borrower and its Active Subsidiaries has all
requisite corporate powers and all governmental licenses, authorizations,
consents and approvals necessary to own and operate its respective properties
and to carry on its business as now conducted and as proposed to be conducted,
other than such governmental licenses, authorizations, consents and approvals
the absence of which will not materially or adversely effect the business,
operations or conditions, financial or otherwise, of Borrower. Borrower has all
requisite corporate powers to borrow the sums provided for in this Agreement,
and to execute and deliver this Agreement and the Notes to which Borrower is
required hereunder to be a party. The execution, delivery and performance of
this Agreement and the Notes to which Borrower is required hereunder to be a
party have been duly authorized by Borrower's Board of Directors and do not
require any consent or approval of the stockholders of Borrower. Each Active
Subsidiary has all requisite corporate power to execute and deliver its
Guaranty, and the execution, delivery and performance of such Guaranty by it
have been duly authorized by such Active Subsidiary's Board of Directors and do
not require any consent or approval of the stockholders of such Active
Subsidiary
6.4. Binding Agreement. This Agreement has been duly executed and
delivered by Borrower and constitutes, and each of the Notes when executed and
delivered by Borrower will constitute, a legal, valid and binding obligation of
Borrower, enforceable against it in accordance with its terms, except as the
enforceability thereof may be affected by (a) bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, (b) the
availability of certain equitable remedies or limitations imposed by certain
equitable principles of general applicability and (c) limitations based on
statutes or on public policy limiting a Person's right to waive the benefits of
statutory provisions or common law rights. Each Continuing Guaranty, when
executed and delivered by an Active subsidiary, will constitute, a legal, valid
and binding obligation of such Active Subsidiary, enforceable against it in
accordance with its terms, except as the enforceability thereof may be affected
by (a) bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally, (b) the availability of certain equitable remedies
or limitations imposed by certain equitable principles of general applicability
and (c) limitations based on statutes or on public policy limiting a Person's
right to waive the benefits of statutory provisions or common law rights.
6.5. Other Agreements. The execution, delivery and performance of this
Agreement and the Notes will not (a) violate any provision of law or regulation
(including, without limitation, Regulations X and U of the Federal Reserve
Board), or any order of any governmental authority, court, arbitration board or
tribunal or Articles of Incorporation or By-laws of Borrower, other than such
violations which will not materially and adversely affect the business,
operations or conditions, financial or otherwise, of Borrower or (b) result in
the breach of, constitute a default under, contravene any provisions of, or
result in the creation of any security interest, lien, charge or encumbrance
upon any of the property or assets of Borrower pursuant to any indenture or
agreement to which Borrower or any of its properties is bound.
6.6. Litigation. There is no litigation, investigation or proceeding in
any court or before any arbitrator or governmental regulatory commission, board,
administrative agency or other governmental authority pending, or, to the
knowledge of Borrower, threatened against or affecting Borrower or any Active
Subsidiary or any of its respective properties, which (a) may affect the
performance by Borrower of this Agreement or the Notes or any of the
transactions contemplated hereby or thereby and (b) if adversely determined
would have a material adverse effect on the business, operations or condition,
financial or otherwise, of Borrower or any Active Subsidiary.
6.7. Consents. No consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority or agency is required in connection with the
execution, delivery and performance by Borrower of this Agreement or the Notes
or the transactions contemplated hereby or thereby (except for standard
disclosure requirements of federal securities laws and regulations).
6.8. Financials. The audited consolidated financial statement of Borrower
as of December 31, 2000, for the fiscal year ended on such date and the
unaudited consolidated financial statement of Borrower as of March 31, 2001 for
the three (3) months ended on such date, copies of which have been heretofore
delivered to the Banks, are true, complete and correct and fairly present the
financial condition of Borrower as of such dates and the results of its
operations for the periods then ended. The aforementioned financial statements
have been prepared in accordance with GAAP applied on a consistent basis. There
has been no material adverse change in the business, operations or condition,
financial or otherwise, of Borrower, since the date of such financial
statements. As of the date thereof, Borrower does not have any material
liabilities, direct or contingent, except as disclosed in the aforementioned
financial statements.
14
6.9. Use of Proceeds. The proceeds of the Loans shall be used by Borrower
for general corporate purposes.
6.10. Regulation U. Borrower is not engaged principally, or as one of its
principal activities in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U
or X of the Federal Reserve Board). No part of the proceeds of the Loans will be
used by Borrower to purchase or carry any such margin stock or to extend credit
to others for the purpose of purchasing or carrying any such margin stock.
6.11. ERISA. Borrower is in compliance in all material aspects with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder. If Borrower has a Plan, no Reportable Event (as defined in ERISA)
has occurred with respect to any such Plan nor are there any unfunded vested
liabilities thereunder; Borrower has met its minimum funding requirements under
ERISA with respect to each such Plan and has not incurred any material liability
to the PBGC in connection with any such Plan.
6.12. Tax Returns. All tax returns required to be filed by Borrower and
each Subsidiary which are now due in any jurisdiction have been filed; all
taxes, assessments, fees and other governmental charges upon Borrower, each
Subsidiary, or upon any of its respective properties, incomes or franchises,
which are due and payable have been paid, or adequate reserve has been provided,
in Borrower's financial statements, for payment thereof.
6.13. Licenses, Trademarks, etc. Each of Borrower and its Active
Subsidiaries has all patents, licenses, trademarks, trademark rights, trade
names, trade name rights, copyrights, permits and franchises which are required
in order for it to conduct its business and to operate its properties as now or
proposed to be conducted without known conflict with the rights of others.
6.14. Burdensome Agreement. Neither Borrower nor any Active Subsidiary is
a party to any unusual or unduly burdensome agreement or undertaking, nor is it
subject to any unusual or unduly burdensome court order, court writ, injunction
or decree of any court or governmental instrumentality, domestic or foreign,
which materially and adversely affects its business or property, assets,
operations or condition, financial or otherwise.
6.15. Title and Lien. Except for Permitted Liens, the real property and
all other property and assets of Borrower reflected in the audited consolidated
financial statement of Borrower dated December 31, 2000, referenced in Section
6.8, are free from all liens, charges, security interests and encumbrances of
any nature whatsoever; and, except as aforesaid, Borrower has a good and
marketable title in fee simple to all such real property and good and marketable
title to all other such property and assets, except those disposed of in the
ordinary course of business.
6.16. Existing Defaults. Neither Borrower nor any Active Subsidiary is in
default under any material term of any mortgage, indenture, deed of trust or any
other material agreement to which it is a party or by which it or any of its
properties may be bound. Neither Borrower nor any Active Subsidiary is in
violation of any Law to which it or any of its properties is subject, other than
such Laws the violation of which will not materially and adversely effect the
business, operations or conditions, financial or otherwise, of Borrower.
6.17. Other Contracts. Neither Borrower nor any Active Subsidiary is in
default in any material respect under the provision of any contract or
commitment with a party which does not contemplate completion of performance by
either party within one year, and to the best of Borrower's knowledge, there are
no facts or conditions which, with the giving of notice or passage of time (or
both), would result in such a default under any provision of any such contract
or commitment which would, individually or in the aggregate, materially and
adversely affect the business or financial position of Borrower or such Active
Subsidiary, as applicable.
6.18. Leases. Borrower enjoys peaceful and undisturbed possession under
all the leases to which it is a party or under which it is a lessee. All such
leases and all leases under which Borrower is lessor are legal, valid and
binding obligations of lessor and lessee and are enforceable in accordance with
their terms, except as the enforceability thereof may be affected by (a)
bankruptcy, insolvency or similar laws affecting the enforcement of creditor's
rights generally, (b) the availability of certain equitable principles of
general applicability, and (c) limitations based on statutes or on public policy
limiting a Person's right to waive the benefits of statutory provisions or
common law rights. No default exists under any such leases under which Borrower
is lessee and Borrower is not in default under any such leases under which it is
lessor.
6.19. Fire and Explosion. Neither the business nor the properties or
operations of Borrower are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance), materially and adversely affecting such business or properties or
operations.
6.20. No Default. No Default or Event of Default has occurred and is
continuing.
15
ARTICLE 7
AFFIRMATIVE COVENANTS
Borrower covenants that, so long as any Obligations remain unpaid or not
fully performed or any Commitment remains unused in whole or in part, unless the
Required Banks shall otherwise consent in writing:
7.1. Inspection. Borrower shall maintain, and cause each Active Subsidiary
to maintain, adequate books and accounts established and admitted in accordance
with GAAP, and permit Banks by their representatives and agents at least on an
annual basis to inspect any of the properties, operating procedures, corporate
books and financial records of Borrower and each Active Subsidiary, to examine
and make copies of the books of account and other financial records of Borrower
and each Active Subsidiary, and to discuss the affairs, finances and accounts of
Borrower with, and to be advised of the same by, Borrower's officers at such
reasonable times and intervals as Banks may designate by reasonable prior notice
to Borrower.
7.2. Proceeds. Borrower shall use the proceeds of the Loans for general
corporate purposes.
7.3. Financial Statements. Borrower will furnish to Agent and to each
Bank:
(a) within forty-five (45) days after the close of each of the first
three fiscal quarters of each fiscal year, a copy of the consolidated balance
sheet of Borrower and the related statements of consolidated income of Borrower
for such fiscal quarter and for the period from the beginning of the fiscal year
to the end of such fiscal quarter, and the consolidated cash flow statement of
Borrower from the beginning of the fiscal year to the end of such fiscal
quarter, all in reasonable detail, subject to year-end audit adjustments and
certified by an Authorized Officer to be complete and correct in all material
respects and to fairly present the consolidated financial position of Borrower
at the dates indicated and the results of its operations and cash flow for the
periods indicated;
(b) within ninety (90) days after the close of each fiscal year, (i)
a copy of the annual audit report of Borrower for such fiscal year for Borrower
including therein a consolidated balance sheet and related statements of
consolidated income, consolidated shareholders equity, and consolidated cash
flow, audited by Xxxxxx Xxxxxxxx, LLP or another independent certified public
accountant acceptable to the Banks, and certified by such accountants to have
been prepared in accordance with GAAP consistently applied, together with (ii) a
certificate of such accounting firm, stating that in the course of the regular
audit of the business of Borrower, which audit was conducted by such accounting
firm in accordance with generally accepted auditing standards, such accounting
firm has obtained no knowledge of an Event of Default (insofar as it pertains to
accounting matters), or an event which with notice or the passage of time or
both would constitute an Event of Default (insofar as it pertains to accounting
matters), has occurred and is continuing, or if, in the opinion of such
accounting firm, an Event of Default (insofar as it pertains to accounting
matters) has occurred and is continuing, a statement as to the nature thereof;
(c) contemporaneously with the delivery of financial statements
required by Sections 7.3(a) and 7.3(b), a Compliance Certificate of an
Authorized Officer stating that such officer has individually reviewed the
provisions of this Agreement and has individually reviewed or supervised the
review of the activities of Borrower during such year or quarterly period, as
the case may be, with a view to determining whether Borrower has fulfilled all
its obligations under this Agreement, and that Borrower has observed and
performed each undertaking contained in the Agreement and is not in Default in
the observance or performance of any of the provisions hereof or, if Borrower
shall be so in Default, specifying all such Defaults and events of which such
officer may have knowledge, and otherwise containing the information and
certifications (including calculation of the financial covenants set forth in
Section 7.11 hereof) required in the form of Compliance Certificate shown on
Exhibit "A";
(d) promptly after sending or making available or filing of the same,
copies of all reports, proxy statements and financial statements that Borrower
sends or makes available to its stockholders and all registration statements and
reports that Borrower files with the Securities and Exchange Commission, or any
material reports that Borrower files with any other governmental official,
agency or authority;
(e) as soon as possible and in any event within five (5) days after
Borrower has knowledge of (i) the occurrence of a Default or an Event of
Default, or (ii) any default or event of default as defined in any evidence of
Debt or under any agreement, indenture or other instrument under which such Debt
has been issued, whether or not such Debt is accelerated or such default waived
and which default or event of default has resulted or may result in a material
adverse change in Borrower's condition (financial or otherwise) or operations, a
statement of an Authorized Officer setting forth details thereof, and the action
which Borrower proposes to take with respect thereto;
(f) as soon as available any written report pertaining to material
items in respect to Borrower's internal control matters submitted to Borrower by
independent accountants in connection with each annual or interim special audit
of the financial conditions of Borrower made by Borrower's independent public
accountants;
16
(g) prompt written notice of any condition or event which has
resulted or might result in (i) a material adverse change in Borrower's
condition (financial or otherwise) or operations, or (ii) a breach of or
noncompliance with any term, condition or covenant contained herein, or (iii) a
material breach of or noncompliance with any term, condition or covenant of any
material contract to which Borrower is a party or by which it or its property
may be bound;
(h) prompt written notice of any claims, proceedings or disputes
(whether or not purportedly on behalf of Borrower) against, or to the knowledge
of Borrower threatened, or affecting, Borrower or any Active Subsidiary which,
if adversely determined, would have a material adverse effect on the business,
properties or condition (financial or otherwise) of Borrower (without in any way
limiting the foregoing, claims, proceedings or disputes involving monetary
amounts in excess of Five Hundred Thousand Dollars ($500,000) not fully covered
by insurance shall be deemed to be material), or any material labor controversy
resulting in or threatening to result in a strike against Borrower, or any
proposal by any public authority to acquire any of the material assets or
business of Borrower;
(i) promptly after receipt thereof a copy of any notice Borrower
receives from the Pension Benefit Guaranty Corporation or the Internal Revenue
Service with respect to any Plan; provided, however, that this Section 7.3(i)
shall not apply to notices of general application promulgated by the Department
of Labor, and prompt written notice if Borrower adopts or becomes liable to
contribute to any Plan;
(j) at least fifteen (15) days prior to incurring any Real Property
Debt, a statement by Borrower to Agent, in form and substance satisfactory to
Agent, which (i) verifies that Borrower is in compliance with Section 8.4 of
this Agreement; (ii) details Borrower's calculation of such compliance; and
(iii) includes, without limitation, attachments detailing the appraisal of
Borrower's property which is the subject of such Real Property Debt;
(k) promptly upon a Subsidiary becoming an Active Subsidiary, or upon
the formation or acquisition by Borrower of an Active Subsidiary, written notice
of such occurrence and cause such Active Subsidiary to execute and deliver to
Agent a Continuing Guaranty in the form attached hereto as Exhibit "E", together
with an opinion of legal counsel to such Subsidiary as to its legal existence,
and the due authorization, execution, delivery and enforceability of such
Guaranty;
(l) promptly upon the request of Agent from time to time, a pro forma
budget or projections for Borrower's consolidated operations for the remainder
of the fiscal year in which such request is made and the ensuing full fiscal
year; and
(m) such other financial or other information as Agent may from time
to time reasonably request.
7.4. Corporate Existence. Borrower shall preserve and maintain its
corporate existence and all of its rights, privileges, and franchises necessary
or desirable in the normal course of its business, and shall cause each Active
Subsidiary to maintain its corporate existence and all of its rights,
privileges, and franchises necessary or desirable in the normal course of its
business.
7.5. Compliance with Law. Borrower shall comply, and cause each Active
Subsidiary to comply, with the requirements of all applicable Laws (including
without limitation, ERISA with respect to each of Borrower's Plans) and all
material agreements to which it is a party, other than such requirements or
agreements with respect to which the non-compliance of Borrower or such Active
Subsidiary will not materially and adversely effect the business, operations or
conditions, financial or otherwise, of Borrower.
7.6. Insurance. Borrower shall maintain and keep in force, and cause each
Active Subsidiary to maintain and keep in force, insurance of the types and in
amounts customarily carried in its lines of business, including but not limited
to fire, public liability, property damage, workmen's compensation insurance
carried by companies and in amounts satisfactory to Banks, and deliver to Banks
from time to time, as Banks may request, schedules setting forth all insurance
then in effect. Borrower shall maintain and keep in full force and effect
property damage insurance covering Eligible Equipment, or shall require lessees
of such Eligible Equipment to do so provided that Borrower maintains secondary
insurance on such Eligible Equipment in amounts customarily carried on such
Eligible Equipment.
7.7. Facilities. Borrower shall keep those properties useful or necessary
to its business in good repair and condition, and from time to time make
necessary repairs, renewals, and replacements thereto so that its property shall
be fully and efficiently preserved and maintained.
7.8. Taxes and Other Liabilities. Borrower shall pay and discharge when
due any and all indebtedness, obligations, assessments, taxes real and personal,
including federal and state income taxes, except such as it may in good faith
contest or as to which a bona fide dispute may arise; provided provision is made
to the satisfaction of the Required Banks for prompt payment thereof in the
event that it is found that the same is its obligation.
7.9. Litigation. Borrower shall give immediate notice to Banks of: (a) any
litigation or proceeding in which it is a party if any adverse decision therein
would require Borrower to pay more than Five Hundred Thousand Dollars ($500,000)
or require Borrower to
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deliver assets the value of which exceeds such sum (whether or not the claim is
considered to be covered by insurance); and (b) the institution of any other
suit or proceeding involving Borrower and/or any Active Subsidiary that might
materially and adversely affect Borrower's operations, financial condition,
property or business.
7.10. Change of Location. Borrower shall notify Banks (30) thirty days in
advance of any change in the location of any of its places of business or of the
establishment of any new, or the discontinuance of any existing, place of
business of Borrower or of any Active Subsidiary.
7.11. Financial Tests. Borrower will maintain, measured quarterly on a
consolidated basis as of the last day of each fiscal quarter in accordance with
GAAP:
(a) Tangible Net Worth at all times of at least the sum of (i) One
Hundred Million Dollars ($100,000,000), plus (ii) fifty percent (50%) of
Borrower's Net Income (without reduction for any Net Loss) generated after June
30, 2001, plus (iii) ninety percent (90%) of the cash proceeds from the issuance
of Borrower's capital stock after June 30, 2001, excluding the first Two Million
Dollars ($2,000,000) of such proceeds from the exercise of stock options after
June 30, 2001.
(b) a ratio of Liabilities to Tangible Net Worth at all times of not
more than 3.00 to 1.00;
(c) a ratio of EBIT to interest expense for the period of four (4)
consecutive fiscal quarters determined as of the last day of such period of at
least 2.00 to 1.00; and
(d) a ratio of Adjusted Net Income to Debt Service of at least 1.15
to 1.00.
ARTICLE 8
NEGATIVE COVENANTS
So long as any Obligations remain unpaid or not fully performed or
any Commitment remains unused in whole or in part, unless the Required Banks
shall otherwise consent to in writing, Borrower agrees that:
8.1. Mergers/Changes. Borrower shall not change its name, change the
nature of its business, sell (whether in any one transaction or a series of
transactions) all or substantially all of its assets, enter into any merger,
consolidation, reorganization or recapitalization, reclassify its capital stock,
cease to be a publicly held company, or become a subsidiary of any other
company; provided, however, that Borrower may acquire the assets or stock of
another entity in a consensual, negotiated transaction with such other entity,
provided that Borrower has furnished to Agent a written statement demonstrating,
in reasonable detail, that after giving effect to such transaction Borrower will
remain in compliance with each of the financial tests set forth in Section 7.11
and no other Event of Default will result therefrom.
8.2. Sale of Assets. Borrower shall not sell, transfer, lease or otherwise
dispose of (a "Transfer") any of its assets outside the ordinary course of its
business except for (i) Transfers of assets for fair consideration in cash or a
cash equivalent so long as all net proceeds of such Transfer are immediately
applied to repayment of outstanding Loans, and (ii) Transfers of worn-out,
obsolete or surplus property (each as determined by Borrower in its reasonable
judgment).
8.3. Liens. Borrower shall not mortgage, pledge, grant or permit to exist
a Lien upon any of its assets of any kind, now owned or hereafter acquired,
except for (collectively the "Permitted Liens"):
(a) existing Liens reflected on the audited consolidated financial
statement of Borrower dated December 31, 2000 furnished to Banks pursuant to
Section 6.8 hereof, or any Lien which replaces an existing Lien, provided the
principal amount of the debt secured by the replacing Lien does not exceed the
principal amount at the time of replacement of the existing Lien, or cover
property other than the property covered by the existing Lien;
(b) Liens of carriers, warehousemen, mechanics, landlords,
materialmen, suppliers, tax, assessments, other governmental charges and other
like Liens arising in the ordinary course of business securing obligations that
are not incurred in connection with the obtaining of any advance or credit and
which are not overdue or are being contested in good faith by appropriate
proceedings, provided provision is made to the satisfaction of Agent for the
eventual payment thereof in the event it is found that such obligation is
payable by Borrower;
(c) Liens arising in connection with workmen's compensation,
unemployment insurance, appeal and release bonds and progress payments under
government contracts;
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(d) the giving, simultaneously with or within ninety (90) days after
the acquisition or construction of real property or tangible personal property,
of any purchase money Lien (including vendor's rights under purchase contracts
under an agreement whereby title is retained for the purpose of securing the
purchase price thereof) on real property or tangible personal property hereafter
acquired or constructed and not heretofore owned by Borrower, or the acquiring
hereafter of real property or personal tangible property not heretofore owned by
Borrower subject to any then existing Lien (whether or not assumed); provided,
however, that in each such case such Lien is limited to such acquired or
constructed real or tangible personal property;
(e) judgment Liens in existence less than thirty (30) days after the
entry thereof or with respect to which execution has been stayed or the payment
of which is covered in full by insurance; and
(f) Liens arising from the Real Property Debt, provided, however,
that Borrower is and remains in compliance with Sections 7.3(j) and 8.4 of this
Agreement.
8.4. Indebtedness. Borrower shall not incur, create, assume, or permit to
exist Debt (other than the Loans) which in the aggregate exceeds One Hundred
Million Dollars ($100,000,000).
8.5. Prepayment. Borrower shall not prepay any Debt (other than Loans), or
enter into or modify any agreement as a result of which the terms of payment of
the Debt are waived or modified unless such prepayment or modification will have
no material adverse affect on the condition (financial or otherwise) or
operations of Borrower.
8.6 Transaction with Affiliates. Borrower shall not, directly or
indirectly, enter into any transaction with or for the benefit of an Affiliate
on terms more favorable to the Affiliate than would have been obtainable in
arms' length dealings.
8.7. Misrepresentations. Borrower shall not furnish Agent or any Bank any
certificate or other document that will contain any untrue statement of material
fact or that will omit to state a material fact necessary to make it not
misleading in light of the circumstances under which it was furnished.
8.8. Regulations. Borrower shall not directly or indirectly apply any part
of the proceeds of the Loans to the purchasing or carrying of any "margin stock"
within the meaning of Regulation U of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder.
8.9. Partnerships. Borrower shall not be, or permit or cause any Active
Subsidiary to be, a general or limited partner in any partnership or a joint
venturer in any joint venture without the written consent of the Required Banks.
ARTICLE 9
EVENTS OF DEFAULT
9.1. Events of Default. The occurrence of any of the following events
shall constitute an Event of Default:
(a) Borrower fails to pay any installment of principal (including
without limitation any mandatory prepayment pursuant to Section 3.4) when due,
or any installment of interest or a Commitment Fee within five (5) calendar days
after the date payable hereunder;
(b) Borrower fails to observe or perform any material, term,
covenant, obligation or agreement to be observed or performed by it under this
Agreement or any Loan Documents when required to be observed or performed and
(i) such failure shall continue for ten (10) calendar days after notice to
Borrower from Agent of such failure or (ii) such failure shall continue for
fifteen (15) calendar days after Agent is notified of such failure by Borrower;
or any Active Subsidiary revokes or terminates its Continuing Guaranty.
(c) a default shall occur as defined in any evidence of Debt by
Borrower or any Active Subsidiary or under any indenture, agreement or other
instrument under which the same may be issued, or any event upon any occurrence
of which any holder or holders of the Debt outstanding thereunder may declare
the same due and payable before its stated maturity, and which default (i) shall
continue for a period of ten (10) calendar days after notice thereof and (ii) in
the reasonable opinion of the Required Banks, has resulted or may result in a
material adverse change in Borrower's condition (financial or otherwise) or
operations, provided, however, that such default shall not be considered an
Event of Default hereunder when the amount thereof is being contested in good
faith by appropriate proceedings with adequate reserves therefor being set aside
by Borrower;
(d) any certified or audited financial statement, representation,
warranty or certificate made or furnished by Borrower to Agent or any Bank in
connection with this Agreement, or as inducement to Banks to enter into this
Agreement, or in any separate statement or document to be delivered hereunder to
Banks, shall be materially false, incorrect, or incomplete when made;
19
(e) Borrower shall suffer one or more final judgments for payment of
money aggregating in excess of Five Hundred Thousand Dollars ($500,000) in any
one (1) year period and shall not discharge the same within a period of thirty
(30) days unless, pending further proceedings, execution has not been commenced
or, if commenced, has been effectively stayed;
(f) Borrower or any Active Subsidiary shall: (i) have an order for
relief entered with respect to it under the Federal Bankruptcy Code; (ii) not
pay, or admit in writing its inability to pay, its debts generally as they
become due; (iii) make an assignment for the benefit of creditors; (iv) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its property; (v) institute any proceeding seeking an order
for relief under the Federal Bankruptcy Code or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it; (vi) take any corporate
action to authorize or affect any of the foregoing actions set forth in this
Section 9.1(f); or (vii) fail to contest in good faith any appointment or
proceeding described in Section 9.1(g);
(g) without the application, approval or consent of Borrower or any
Active Subsidiary, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Borrower or any Active Subsidiary, or any substantial
part of its respective property, or a proceeding described in Section 9.1(f)
shall be instituted against Borrower or any Active Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of thirty (30) consecutive days;
(h) at any time Borrower or any Active Subsidiary has a Plan and any
Reportable Event occurs, as defined in ERISA, which creates or results in a
liability in excess of Five Hundred Thousand Dollars ($500,000) for which
Borrower or any Active Subsidiary is or may become obligated to pay, and such
liability continues to exist for thirty (30) consecutive days;
(i) the Required Banks shall have reasonably determined in good faith
(which determination, if made reasonably and in good faith, shall be final and
conclusive and shall be binding upon the parties to this Agreement) that one or
more conditions exist or events have occurred which might indicate, or result
in, a material adverse change in the operations, business, property or assets or
in the condition (financial or otherwise) of Borrower, or in the ability of
Borrower or any Active Subsidiary to meet in the normal course of business its
obligations under this Agreement, the Notes or, in the case of an Active
Subsidiary, its Guaranty, and such conditions or events continue for a period of
ten (10) calendar days following notice.
9.2. Acceleration. If any Event of Default described in Section 9.1(f) or
9.1(g) shall occur and be continuing, the obligations of Banks to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of Agent or
any Bank. If any other Event of Default shall occur and be continuing, the
Required Banks may (and at the direction of the Required Banks, Agent shall)
terminate or suspend the obligations of Banks to make Loans hereunder, or
declare the obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of dishonor of any kind, as such terms are defined in
Division 3 of the California Commercial Code, all of which Borrower hereby
expressly waives. Agent shall give Borrower prompt notice of any termination or
suspension of its obligations or acceleration of Borrower's Obligations
hereunder. After any acceleration, Banks shall have, in addition to the rights
and remedies given to them by this Agreement and the Notes, all those allowed by
all Applicable Laws.
ARTICLE 10
AGENT
10.1. Appointment; Powers. Each Bank hereby irrevocably appoints and
authorizes Agent to act as its agent under the Loan Documents and authorizes
Agent to take such actions on Bank's behalf and to exercise such powers under
the Loan Documents as are specifically delegated to Agent by the terms thereof,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such upon the express conditions contained in this Article 10. Agent
shall have no duties or responsibilities except those expressly set forth in the
Loan Documents, may perform such duties by or through its agent or employees and
shall not by reason of the Loan Documents have a fiduciary relationship with any
Bank. The provisions of this Article 10 are solely for the benefit of Agent and
Banks; and Borrower shall not have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement, Agent shall act solely as agent of Banks, and does not assume and
shall not be deemed to have assumed any obligations towards or relationship of
agency or trust with or for Borrower.
10.2. Agent as Bank. The agency hereby created shall in no way impair or
affect any of the rights and powers of, or impose any duties or obligations upon
Agent in its individual capacity. With respect to its Commitments and the Loans
made by it, Agent shall have the same rights and powers under the Loan Documents
as any Bank and may exercise the same as though it were not Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include Agent
in its capacity as a Bank hereunder. Agent and any Bank and their respective
Affiliates may accept deposits from, lend money to (including loans which may be
repaid by Loans
20
under this Agreement), and generally engage in any kind of business with
Borrower or any of its Affiliates as if it were not Agent or a Bank and without
any duty to account therefor to the other parties to this Agreement.
10.3. Independent Credit Analysis. Each Bank represents and warrants that
(a) it has, independently and without reliance upon Agent, any other Bank, or
the directors, officers, agents, or employees of Agent or of any other Bank, and
instead in reliance upon information supplied to it by or on behalf of Borrower,
and upon such other information as it has deemed appropriate, made its own
independent investigation of the financial condition and affairs of Borrower and
its own independent credit analysis and decision to enter into this Agreement,
and (b) it shall independently and without reliance upon Agent, any other Bank,
or the directors, officers, agents or employees of Agent, or of any other Bank,
continue to make its own independent credit analyses and decisions in acting or
not acting under the Loan Documents. Agent shall not have any duty or
responsibility to make any such investigation or appraisal on behalf of Banks or
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of Borrower which may at any time come into the
possession of Agent or any of its Affiliates, unless such information shall have
been delivered to Agent in writing (i) with directions to deliver the same to
Banks or (ii) in satisfaction of a specific requirement of this Agreement.
10.4. General Immunity. Neither Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under any of the Loan Documents or in connection therewith, unless
caused by its or their gross negligence or willful misconduct. Without limiting
the generality of the foregoing, Agent:
(a) shall not be responsible to any Bank for any recitals,
statements, warranties or representations in the Loan Documents or in any
written or oral statement or in any financial or other statements, agreements,
instruments, reports, certificates or other documents relative thereto or for
the financial condition of Borrower;
(b) shall not be responsible for the authenticity, accuracy,
completeness, value, validity, effectiveness, due execution, legality,
genuineness, enforceability or sufficiency of the Loan Documents or any other
agreements or any assignments, certificates, requests, financial statements,
notice schedules or any opinions of counsel executed and delivered pursuant
thereto;
(c) shall not be bound to ascertain or inquire as to the performance
or observance of any of the terms, provisions, agreements, covenants or
conditions contained in the Loan Documents on the part of Borrower, or any of
the terms of any such agreement by any party thereto or as to the use of the
proceeds of the Loans and shall have no duty to inspect the property (including
the books and records) of Borrower;
(d) shall incur no liability under or in respect of the Loan
Documents or any other document by acting upon any notice, consent, certificate
or other instrument or writing believed by Agent in good faith to be genuine and
signed or sent by the proper party;
(e) may consult with legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by Agent and shall not
be liable for any action taken or omitted to be taken in good faith in
accordance with the advice of such counsel, accountants or experts; and
(f) subject to the provisions of Section 10.6(c), (i) Agent may act
or refrain from acting under the Loan Documents in accordance with the
instructions of the Required Banks or Banks, where appropriate in accordance
with the terms of the Loan Documents, (ii) Agent shall be entitled to refrain
from exercising any power, discretion or authority vested in it under any Loan
Document unless and until it has obtained the instructions of Required Banks,
where appropriate in accordance with the terms of the Loan Documents, or Banks,
and (iii) no Bank shall have any right of action against Agent for acting or
refraining from acting in accordance with this Section 10.4(f).
10.5. Right to Indemnity. Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first be
indemnified (upon requesting such indemnification) to its satisfaction by Banks
(in accordance with each Bank's Pro Rata Share, determined in each case as of
the date on which the event giving rise to the claim for indemnification arose)
against any and all liability and expense which it may incur by reason of taking
or continuing to take any such action. Each Bank severally agrees to indemnify
Agent (to the extent not reimbursed under Section 11.5), in the amount of its
Pro Rata Share (determined as aforesaid) for any and all liabilities,
obligations, losses, damages, penalties, actions judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against Agent in any way relating to or arising out
of the Loan Documents or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any other documents, provided no
such liability, obligation, loss, damage, penalty, action, judgment, suit,
claim, cost, expense or disbursement results from Agent's gross negligence or
willful misconduct. Each Bank agrees to reimburse Agent in the amount of its Pro
Rata Share of any out-of-pocket expenses and costs, including, without
limitation, attorneys' fees, incurred for the benefit of Banks and not
reimbursed by Borrower pursuant to Section 11.5 of this Agreement. Nothing
contained herein shall release Borrower from any obligations to make payments to
Agent pursuant to Section 3.8.
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10.6. Action by Agent
(a) Actual Knowledge. Agent may assume that no Default or Event of
Default has occurred and is continuing, unless Agent has actual knowledge of the
Default or Event of Default, has received notice from Borrower, its counsel or
its independent certified public accountants stating the nature of the Default
or Event of Default, or has received notice from a Bank stating the nature of
the Default or Event of Default and that Bank considers the Default or Event of
Default to have occurred and be continuing.
(b) Agent; Obligations. Agent has only those obligations under the
Loan Documents that are expressly set forth therein. Without limitation on the
foregoing, Agent shall have no duty to inspect any property of Borrower,
although Agent may in its discretion periodically inspect the property from time
to time.
(c) Discretion to Act. Except for any obligation expressly set forth
in the Loan Documents and as long as Agent may assume that Default or Event of
Default has occurred and is continuing, Agent may, but shall not be required to,
exercise its discretion to act or not act, except that Agent shall be required
to act or not act upon the instructions of the Required Banks (or of all Banks
in any circumstances governed by the provisions of Section 11.1 of this
Agreement) and those instructions shall be binding upon Agent, all Banks, and
all holders of the Notes; provided, that Agent shall not be required to act or
not act if to do so would be contrary to any Loan Document or to Applicable Law.
(d) Action Upon Instructions. If Agent has knowledge (as provided in
Section 10.6(a)) that a Default or Event of Default has occurred and is
continuing, Agent shall give notice thereof to Banks and shall act or refrain
from acting upon the instructions of the Required Banks, where appropriate in
accordance with the terms of this Agreement, or Banks; or provided that Agent
shall not be required to act or not act if to do so would be contrary to any
Loan Document or to Applicable Law. If the Required Banks or Banks, as the case
may be, entitled to instruct Agent fail, for fifteen (15) Business Days after
the giving of notice by Agent, to instruct Agent, then Agent in its discretion
may act or not act as it deems advisable for the protection of the interests of
Banks.
10.7. Payee of Note Treated as Owner. Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed with
Agent. Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the payee of any
Note or the holder of any Note (if Agent has received written notice of the
assignment or transfer thereof) shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor.
10.8. Agent's Resignation. Agent may resign at any time by giving at least
ninety (90) days' prior written notice of its intention to do so to each Bank
and to Borrower. Such resignation shall become effective upon the appointment by
Borrower, with the consent of the Required Banks, which consent shall not be
unreasonably withheld, of a successor Agent which is a Bank; provided that upon
the occurrence and continuance of an Event of Default, the Required Banks shall
appoint such successor without the consent of Borrower. Upon the acceptance of
any appointment as an Agent hereunder by a successor Agent, that successor Agent
shall thereupon 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 Agreement. After any
resigning Agent's resignation hereunder as Agent, the provisions of this Article
10 shall continue to inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent hereunder. Upon such appointment, the term
"Agent" shall for all purposes of this Agreement thereafter mean such successor.
10.9 IRS Withholding Representation. Each Bank represents and warrants
that it is entitled to receive any payments hereunder without the withholding of
any tax and will furnish to Agent such forms, certifications, statements and
other documents as Agent may request from time to time to evidence such Bank's
exemption from the withholding of any tax imposed by any jurisdiction or to
enable Agent to comply with any applicable laws or regulations relating thereto.
Without limiting the effect of the foregoing, if any Bank is not
created or organized under the laws of the United States or any state thereof,
such Bank further represents and warrants that it is engaged in the conduct of a
business within the United States and that the payments made hereunder are or
are reasonably expected to be effectively connected with the conduct of that
trade or business and are or will be includible in its gross income or, if Bank
is not engaged in a U.S. trade or business with which such payments are
effectively connected, that such Bank is entitled to the benefits of a tax
convention which exempts the income from U.S. withholding tax and that it has
satisfied all requirements to qualify for the exemption from tax.
Each Bank agrees that it will, immediately upon the request of Agent,
furnish to Agent Form 4224 or Form 1001 of the Internal Revenue Service, or such
other forms, certifications, statements or documents, duly executed and
completed by such Bank as evidence of its exemption from the withholding of U.S.
tax with respect thereto. If any Bank determines that, as a result of any change
in applicable law, regulation, or treaty or in any official application or
interpretation thereof, it ceases to qualify for exemption from any tax imposed
by any jurisdiction with respect to payments made hereunder, such Bank shall
promptly notify Agent of such fact and Agent may, but shall not be required to
withhold the amount of any such applicable tax from amounts paid to such Bank
hereunder. Agent shall not be obligated to make any payments hereunder to such
Bank in respect of its Loans until such Bank shall have furnished
22
to Agent the requested form, certification, statement or document and may
withhold the amount of such applicable tax from amounts paid to Bank hereunder.
Each Bank shall reimburse, indemnify and hold Agent harmless for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed upon, incurred by or asserted against Agent due
to its reliance upon the representation hereby made that such Bank is exempt
from withholding of tax. Unless Agent receives written notice to the contrary,
each Bank shall be deemed to have made the representations contained in this
Section and in each subsequent tax year of such Bank.
ARTICLE 11
MISCELLANEOUS
11.1. Amendments. Subject to the provisions of this Article 11 and except
as otherwise provided in any Loan Document, the Required Banks (or the Agent
with the consent in writing of the Required Banks) and the Borrower, may enter
into agreements supplemental hereto or thereto for the purpose of adding to or
modifying any provisions of the Loan Documents or changing in any manner the
rights of the Banks or of the Borrower, as the case may be, hereunder or
thereunder or waiving any Default or Event of Default hereunder or thereunder;
provided, however, that no such supplemental agreement shall, without the
written consent of all the Banks:
(a) Extend the maturity of any Loan or Note, reduce the principal
amount thereof, reduce the rate, or extend the time of payment of interest or
fees thereon.
(b) Change the percentage specified in the definition of Required
Banks.
(c) Extend the Termination Date, or reduce the amount or extend the
payment date for, the mandatory payments, or increase the Pro Rata Share of any
Bank or amount of the Commitment of any Bank hereunder, or permit the Borrower
to assign its rights under this Agreement.
(d) Amend this Section 11.1.
(e) Modify the definition of either Borrowing Base or Adjusted
Borrowing Base, or modify or delete the reference to the Adjusted Borrowing Base
in the definition of Commitment.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may amend or waive
payment of the fee required under Section 3.8 without obtaining the consent of
any of the Banks.
11.2. Preservation of Rights. No delay or omission of the Agent or any
Bank to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
a Default or Event of default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Banks required pursuant to Section 11.1, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Banks until the Obligations have been paid in full.
11.3. Setoff. In addition to, and without limitation of, any rights of the
Banks under applicable Law, if the Borrower becomes insolvent, however
evidenced, or any Default or Event of Default occurs, any indebtedness from any
Bank to the Borrower (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due.
11.4. Ratable Payments. If any Bank, whether by setoff or otherwise, has
payment made to it upon its Loans in a greater proportion than that received by
any other Bank, such Bank agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Banks so that after such purchase each Bank will
hold its ratable proportion of Loans.
11.5. Expenses. Whether or not the transactions contemplated hereby shall
be consummated, Borrower agrees to promptly pay (a) all the actual and
reasonable costs and expenses of preparation of this Agreement, the Notes and
the other Loan Documents, and of all the costs of furnishing all opinions by
counsel for Borrower (including without limitation any opinions requested by
Agent as to any legal matters arising hereunder or thereunder), and of
Borrower's performance of and compliance with all agreements and conditions
contained herein on its part to be performed or complied with; (b) the
reasonable fees, expenses and disbursements of Agent (including
23
fees, expenses and disbursements of counsel to Agent) in connection with the
administration of this Agreement, the Notes, the other Loan Documents, and the
Loans hereunder, and any amendments and waivers hereto; and (c) after the
occurrence of an Event of Default, all costs and expenses (including reasonable
attorneys' fees and costs of settlement) incurred by Banks in enforcing any
Obligations of or in collecting any payments due from Borrower hereunder or
under the Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceeding.
11.6. Indemnity. In addition to the payment of expenses pursuant to
Section 11.5, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to indemnify, pay and hold Banks and any holder of
any Note, and the officers, directors, employees and agents of Banks and such
holders (individually called an "Indemnitee" and collectively called the
"Indemnitees") harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto),
which may be imposed on, incurred by, or asserted against such Indemnitee, in
any manner relating to or arising out of the use or intended use of the proceeds
of the Loans hereunder (the "indemnified liabilities"); provided that Borrower
shall have no obligation to an Indemnitee hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of that
Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
11.7. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
11.8. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Bank shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable Law.
11.9. Taxes. Any taxes (excluding income taxes) payable or ruled payable
by Federal or State authority in respect of the Loan Documents shall be paid by
the Borrower, together with interest and penalties, if any.
11.10. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
11.11. Several Obligations. The respective obligations of the Banks
hereunder are several and not joint and no Bank shall be the partner or agent of
any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Bank to perform any of its obligations hereunder shall
not relieve any other Bank from any of its obligations hereunder. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
assigns.
11.12. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Banks.
11.13 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
11.14. Non-Liability of Banks. The relationship between the Borrower and
the Banks and the Agent shall be solely that of borrower and lender. Neither the
Agent nor any Bank shall have any fiduciary responsibilities to the Borrower.
Neither the Agent nor any Bank undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations.
11.15. Choice of Law. The Loan Documents (other than those containing a
contrary express choice of law provisions) shall be construed in accordance with
the internal laws (and not the law of conflicts) of the State of California, but
giving effect to federal laws applicable to national banks.
11.16. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR CALIFORNIA STATE
COURT SITTING IN SAN FRANCISCO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
24
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY BANK TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
11.17. Compliance with Applicable Laws. It is not the intent of the
Borrower, the Agent or the Banks to make an agreement in violation of Applicable
Law. Regardless of any provision contained herein, no Bank shall be entitled to
receive, collect or apply, as interest on the Loans, any amount in excess of the
Maximum Amount. If any Bank ever receives, collects or applies, as interest, any
such excess, such amount which would be excessive interest shall be deemed a
partial repayment of principal and treated hereunder as such; and if principal
is paid in full, any remaining excess shall be paid to the Borrower. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Maximum Amount, the Borrower and each Bank shall, to
the maximum extent permitted under Applicable Law, (a) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effect thereof, and (c) amortize, prorate,
allocate and spread in equal parts, the total amount of interest throughout the
entire contemplated term of the Obligations so that the interest rate is uniform
throughout the entire term of the Obligations; provided, however, that if the
Loans are paid and performed in full prior to the end of the full contemplated
term of the Obligations, and if the interest received for the actual period of
existence thereof exceeds the Maximum Amount, each Bank shall refund to the
Borrower the amount of such excess or credit the amount of such excess against
the total principal amount of the Loans owing, and, in such event, each Bank
shall not be subject to any penalties provided by Applicable Law for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 11.17 shall control every other provision of all agreements pertaining
to the transactions contemplated by or contained in the Transaction Documents.
11.18. Confidentiality. Agent and each Bank agrees to hold any information
which it may receive from Borrower pursuant to this Agreement in confidence, and
further agrees not to disclose any such information to any Person or to use any
such information for any purpose other than in connection with this Agreement.
The restrictions of this Section 11.18 shall not apply to any information which
has been disseminated to the public.
(a) Agent and each Bank agrees that, at any time that it has in its
possession any of Borrower's confidential information and for not less than
seventy-two (72) hours after such information is made available to the public,
it will not buy or sell, or place orders to buy or sell, directly or indirectly,
any securities of Borrower.
(b) Notwithstanding the foregoing, Agent and Banks may disclose such
Borrower's confidential information to other Banks or to other Bank's employees,
attorneys, accountants, or other professional advisors as is necessary for Agent
or such Banks to perform its obligations or protect its interests under this
Agreement. Agent and each Bank shall take such steps to protect Borrower's
confidential information as it does to protect its own confidential information.
(d) Notwithstanding the foregoing, Agent and Banks may disclose such
of Borrower's confidential information as each of them may be required to do so
(i) to regulatory officials, (ii) pursuant to law, regulation or legal process,
or (iii) in connection with any legal proceeding to which Agent or a Bank may be
a party; provided that Agent or such Bank shall have first given Borrower such
written notice of its intention to so disclose Borrower's confidential
information promptly after it receives notice that it is required to disclose
such information.
11.19. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of Agent, Banks and Borrower and their respective
successors and assigns; provided, however, that Borrower may not assign or
transfer its rights or obligations under this Agreement without the prior
written consent of the Banks.
11.20. Assignments; Participations.
(a) Subject to the provisions of subsection 11.20(h), each Bank may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or any
portion of its Pro Rata Share of the Commitments, the Loans owing to it and the
Note held by it); provided, however, that (i) any such assignment (other than
any assignment to an existing Bank) shall be in a minimum aggregate amount of
$5,000,000 (or, if less, the remaining amount of the Commitment being assigned
by such Bank) of the Commitments or an integral multiple of $1,000,000 in excess
thereof, (ii) each such assignment shall be of a uniform, and not a varying,
percentage of all rights and obligations under and in respect of the Revolving
Loan facility, (iii) each such assignment shall be to an Eligible Assignee and
(iv) the parties to each such assignment shall execute and deliver to Agent, for
its acceptance and recording in the Register, an assignment and acceptance in
form customary and reasonably satisfactory to Agent (an "Assignment and
Acceptance"), together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank hereunder and (y) the Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
25
Assignment and Acceptance covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement, such Bank shall cease to be
a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Bank assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of Borrower or any
guarantor or the performance or observance by the Borrower or any guarantor of
any of its obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon Agent, such assigning Bank or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Bank.
(c) Agent shall maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Banks and each Bank's share of the Commitment, and
principal amount of the Loans owing to each such Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Borrower, Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee, together with any Note or Notes subject to such
assignment, Agent shall (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to Borrower. Within five Business Days after its receipt of such notice,
Borrower, at its own expense, shall, on request, execute and deliver to Agent in
exchange for any surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the portion of the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained a portion of the Commitment hereunder, a new Note to the order of the
assigning Bank in an amount equal to the portion of the Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit "D" hereto.
(e) Each Bank may sell participations in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Pro Rata Share of the Commitment, the Loans owing to it
and the Note or Notes, if any, held by it); provided, however, that (i) such
Bank's obligations under this Agreement (including, without limitation, its Pro
Rata Share of the Commitment) shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Bank shall remain the holder of any such Note for
all purposes of this Agreement, (iv) Borrower, Agent and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement and (v) no participant under
any such participation shall have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
party therefrom, except and solely to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Loans or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.20, disclose to the assignee or participant or proposed assignee or
participant any information relating to Borrower furnished to such Bank by or on
behalf of Borrower; provided, that such assignee or participant or proposed
assignee or participant agrees to maintain the confidentiality of any
confidential information delivered pursuant hereto.
(g) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes, if any, held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
26
(h) If any Bank (an "Assigning Bank") desires to make an assignment
under subsection 11.20(a) to proposed Eligible Assignee who is not then an
existing Bank or Affiliate of an existing Bank, the Assigning Bank shall first
give written notice of such intention to Agent and to Borrower, including a
statement of the dollar amount of Commitment proposed to be assigned by such
Assigning Bank and, if known by the Assigning Bank, the name of each Person to
whom the Assigning Bank proposes to make an assignment (an "Assignment Notice").
Within seven (7( Business Days after receipt by Borrower of an Assignment
Notice, Borrower may deliver to the Assigning Bank a written response (a
"Response") indicating (i) Borrower's objection, if any, to any proposed
assignee identified in the Assignment Notice and the basis for such objection,
and (ii) one or more Persons whom Borrower has selected and proposes as an
Eligible Assignee in lieu of the Person(s) identified by the Assigning bank.
Borrower and the Assigning Bank agree to cooperate with each other in
effectuatuing an assignment to the Person(s) selected by Borrower, assuming such
Person otherwise satisfies the provisions of this Section 11.20.
11.21. Notices.
(a) Except as otherwise expressly provided in this Agreement:
(i) All notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document
must be in writing and must be mailed, telecopied, or delivered to the
appropriate party at the address set forth on the signature pages of this
Agreement or, as to any party to any Loan Document, at any other address
as may be designated by it in a written notice sent to all other parties
to such Loan Document in accordance with this Section 11.20; and
(ii) Any notice, request, demand, direction or other communication
given by telecopier must be confirmed within 48 hours by letter mailed or
delivered to the appropriate party at its respective address.
(b) Except as otherwise expressly provided in any Loan Document, if
any notice, request, demand, direction or other communication required or
permitted by any Loan Document is given by mail it will be effective on the
earlier of receipt or the third calendar day after deposit in the United States
mail with first class or airmail postage prepaid; if given by telecopier, when
sent; or if given by personal delivery, when delivered.
11.22. Entire Agreement. The Loan Documents represent the final and entire
agreement between the parties hereto and supersede all prior and contemporaneous
agreements and understandings relating to the subject matter of this Agreement.
11.23. Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY
LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
27
IN WITNESS WHEREOF, Borrower, Agent, and Banks have caused this Agreement
to be duly executed on the day and year first written at the head of this
Agreement.
BORROWER:
XxXXXXX RENTCORP
By:
---------------------------------------------------
Xxxxxx X. Xxxxx
Title: Vice President and Chief Financial Officer
Notice Address:
0000 Xxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxx, Chief Financial Officer
Fax: 000-000-0000
BANKS:
UNION BANK OF CALIFORNIA, N.A.,
individually and as Agent
By:
---------------------------------------------------
Xxxxx Xxxxx
Title: Vice President
Notice Address:
--------------
Pro Rata Share of
East Bay Commercial Banking Group Commitment: $34,000,000
Two Walnut Creek Center Pro Rata Share: 28.333333332%
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000-0000
Attention: Xx. Xxxxx Xxxxx
Fax No.: (000) 000-0000
28
FIRST UNION NATIONAL BANK
By:
------------------------------
Xxxx X. Xxxxx
Title: Vice President
Notice Address:
--------------
Pro Rata Share of
Business and Consumer Services Commitment: $26,000,000
One First Union Center Pro Rata Share: 21.666666667%
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Director, Underwriting
Fax No.: (000) 000-0000
BANK OF AMERICA, N.A.
By:
-----------------------------
Xxxx X. Xxxxxx
Title: Senior Vice President
Notice Address:
--------------
Bay Area Commercial Banking Group Pro Rata Share of
000 Xxxxxxxxxx Xxxxxx, Concourse Level Commitment: $20,000,000
Xxx Xxxxxxxxx, XX 00000 Pro Rata Share: 16.666666667%
Attention: Xxxx X. Xxxxxx, Xx. V.P.
Fax No.: (000) 000-0000
COMERICA BANK - CALIFORNIA.
By: __________________________________
Name: _______________________________
Title: _______________________________
Notice Address:
--------------
Pro Rata Share of
0000 X. Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000 Commitment: $20,000,000
Xxxxxx Xxxxx, XX 00000 Pro Rata Share: 16.666666667%
Attention: R. Xxxxxxx Xxx, V.P.
Fax No.: (000) 000-0000
XXXXX FARGO BANK, N.A.
By: __________________________________
Name: _______________________________
Title: _______________________________
Notice Address:
--------------
Pro Rata Share of
0000 Xxxxxxx Xxxxxx Commitment: $20,000,000
Xxxxxxx, XX 00000 Pro Rata Share: 16.666666667%
Attention: Xxxxxx Xxxxxxxx, V.P.
Fax No.: (000) 000-0000
