CREDIT AGREEMENT
DATED AS OF JANUARY 31, 1996
BETWEEN
TRANS LEASING INTERNATIONAL, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
INDIVIDUALLY AND AS AGENT
CREDIT AGREEMENT
THIS AGREEMENT is entered into as of January 31, 1996,
between TRANS LEASING INTERNATIONAL, INC., a Delaware corporation
(the "Company"), the Banks and The First National Bank of
Chicago), ("Agent"), individually and as Agent.
WHEREAS, the Company, the Banks and the Agent desire to
enter into this Credit Agreement pursuant to which the Banks will
make certain loans to the Company as more fully described herein;
NOW, THEREFORE, in consideration of the foregoing premises
and the agreements hereinafter set forth, and for other good and
valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS, INTERPRETATION OF AGREEMENT AND COMPLIANCE
WITH FINANCIAL RESTRICTIONS.
1.1 Definitions. In addition to the terms defined
elsewhere in this Agreement, the following terms shall have
the meanings indicated for purposes of this Agreement (such
meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Account" has the meaning ascribed to such term in
Section 3.2(c).
"Agent" means The First National Bank of Chicago in its
capacity as Agent for the Banks hereunder pursuant to
Article 13 and not in its individual capacity as a Bank, and
any Person subsequently appointed as the successor Agent
pursuant to Section 13.11.
"Agreement" means this Credit Agreement, as it may be
amended, modified or supplemented from time to time.
"Article" means an article of this Agreement, unless a
different document is specifically referenced.
"Average Original Equipment Cost Per Lease" has the
meaning ascribed to such term in Section 9.24.
"Bank" shall include First Chicago and any Person which
becomes a "Bank" hereunder pursuant to Section 15.3 and
their respective successors and assigns.
"Banking Day" means any day on which banks are open for
business in Chicago, Illinois and, with respect to
Eurodollar Loans, on which dealings in foreign currencies
and exchange may be carried on by the Banks in the interbank
eurodollar market.
"Borrowing" means Loans of the same type and, in the
case of Eurodollar Loans, having the same Interest Period,
and made by all Banks on the same Banking Day and pursuant
to the same request in accordance with Section 3.2 or 3.3.
"Borrowing Base" means the excess of (a) the sum of (i)
85% of the present value of Eligible Lease Receivables
(determined, for each Lease, on the basis of the Receivable
Discount Rate), plus (ii) 85% of the present value of
Eligible Vendor Note Receivables (determined, for each
Vendor Note, on the basis of the Receivable Discount Rate),
plus (iii) 85% of the book value of Eligible Customer Note
Receivables, provided that the portion thereof in excess of
$5,000,000 shall be excluded from the computation of the
Borrowing Base, (iv) 25% of the lesser of (X) 11% of the
aggregate original acquisition cost of the property leased
under Eligible Leases and (Y) the present value (determined
on the basis of the Receivable Discount Rate) of the
aggregate Residuals with respect to Eligible Leases, plus
(v) 100% of Unrestricted Cash of the Company and its
consolidated Subsidiaries over (b) the Consolidated Total
Liabilities other than the outstanding principal balance of
the Loans; provided, that to the extent the aggregate
Eligible Lease Receivables due from any one Person exceeds
$1,000,000, or $3,000,000 in the case of Hanjin Shipping and
all of its subsidiaries, including Korean Airlines, and
$2,200,000 in the case of Aluminio Conesa/Hyundai Precision
America and all of their subsidiaries, as of such time of
determination, the portion thereof in excess of such amount
shall be excluded from the computation of the Borrowing
Base.
"Borrowing Base Certificate" has the meaning ascribed
to such term in Section 9.1(a).
"Capitalized Lease" means any lease which is or should
be capitalized on the balance sheet of the lessee in
accordance with GAAP.
"Code" means the Internal Revenue Code of 1986 and any
successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time
to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Commitment" means, as the context may require, a
Bank's Revolving Loan Commitment or Term Loan Commitment.
"Commitment Amount" means, as the context may require,
the Revolving Loan Commitment Amount or Term Loan Commitment
Amount.
"Company" means Trans Leasing International, Inc., a
Delaware corporation and its successors and assigns.
"Compliance Certificate" has the meaning ascribed to
such term in Section 9.1(d).
"Confirmation" has the meaning ascribed to such term in
Section 3.2(a).
"Consolidated Tangible Net Worth" means, at any time,
the total of (a) shareholders' equity (including capital
stock, additional paid-in capital and retained earnings
after deducting treasury stock) of the Company and its
consolidated Subsidiaries calculated in accordance with
GAAP, plus (b) Subordinated Debt of the Company and its
consolidated Subsidiaries (other than that portion thereof
which is due within twelve (12) months of such time), minus
(c) the sum of (i) the total amount of any intangible assets
of the Company and its consolidated Subsidiaries plus (ii)
Restricted Cash of the Company and its consolidated
Subsidiaries (not including any Restricted Cash of a
Securitization Subsidiary) plus (iii) the Company's
aggregate Net Assets of Securitization Subsidiaries.
Intangible assets shall include, without limitation,
unamortized debt discount and expense, unamortized deferred
charges and goodwill.
"Consolidated Total Liabilities" means, at any date of
determination, the sum of (a) the total liabilities of the
Company and its consolidated Subsidiaries which, in
accordance with GAAP, would be included in determining
liabilities as shown on the liability side of the Company's
consolidated balance sheet, plus (b) the contingent
obligations or liabilities of the Company and its
consolidated Subsidiaries (excluding those as to which a
dollar amount is not ascertainable), minus (c) that portion
of deferred taxes of the Company and its consolidated
Subsidiaries which does not exceed eight percent (8%) of the
consolidated total assets (as determined in accordance with
GAAP) of the Company and its consolidated Subsidiaries, and
minus (d) Subordinated Debt other than that portion thereof
which is due within twelve (12) months of such date of
determination. Notwithstanding the foregoing, a
Securitization Subsidiary shall not be considered a
Subsidiary for purposes of this definition.
"Conversion Date" means January 30, 1997 (or any later
date to which the Conversion Date may be extended pursuant
to Section 6.8), or such earlier date (which shall be a
Banking Day) as may be fixed by the Company on at least five
(5) Banking Days' written or telephonic notice received by
the Agent.
"Credit" means the aggregate Commitments of the Banks
to make Revolving Loans and the Term Loans under the terms
of this Agreement.
"Customer Note" means any promissory note (a) which is
payable to or to the order of the Company and (b) which
evidences a loan made by the Company to the maker of such
note.
"Dollars" and the symbol "$" means lawful money of the
United States of America.
"Eligible Customer Note" means a Customer Note which
satisfies all of the following requirements: (i) it is the
valid and enforceable obligation of the maker thereof; (ii)
it is a negotiable instrument and maker thereof has waived
all defenses as against any assignee of the Company or
subsequent holder thereof; (iii) no payment with respect
thereto is more than 60 days past due and there exists no
other material defaults by the maker thereof of any of its
obligations thereunder or under any assignment, security
agreement or other document executed by the maker thereof in
connection therewith; and (iv) there exists no setoffs,
counterclaims or defenses of or disputes with the maker with
respect thereto. A Customer Note shall be an Eligible
Customer Note only if and so long as it satisfies all of the
above requirements, and if at anytime a Customer Note fails
to satisfy any of the above requirements it shall not, so
long as it fails any of the above requirements, be an
Eligible Customer Note.
"Eligible Customer Note Receivable" with respect to a
Customer Note means, at any date of determination, without
duplication, principal amounts due or to become due to the
Company under such Eligible Customer Note.
"Eligible Lease" means a Lease (i) under which the
Company is the lessor or, by reason of the Company's
purchase thereof, is the successor in interest of the
lessor, (ii) which is either a "sales type lease," a "direct
financing lease" or an "operating lease" (as such terms are
defined in FASB Statement No. 13, as in effect from time to
time), and (iii) which satisfies all of the following
requirements; no payment due from the lessee thereunder is
more than 60 days past due, and there exists no other
material default by the lessee of any of its obligations
thereunder or by any other obligor of its obligations with
respect thereto; it arises from a bona fide lease or sale of
the property covered thereby and is the valid and
enforceable obligation of the lessee thereunder; it provides
that it is noncancellable during its initial term and that
the lessee will pay all amounts due thereunder without
setoff, counterclaim, defense or abatement; there exist no
setoffs, counterclaims or defenses of or disputes with the
lessee with respect thereto; the Lease, the payments due or
to become due thereunder and the property leased thereunder
(unless the Company holds a security interest rather than
title) are not subject to any Lien except Liens permitted
under this Agreement (other than Liens described in Section
9.20(h), which shall not be permitted to apply to an
Eligible Lease) and the interests of the lessee; and the
Company holds title to the Lease and all payments due or to
become due thereunder and holds title to or has a security
interest (which if the original equipment cost is more that
$10,000, is first and perfected) in, all property covered
thereby. A Lease which initially was an Eligible Lease, but
which subsequently fails to satisfy any of the above
requirements, shall cease to be an Eligible Lease.
"Eligible Lease Receivable" means a Lease Receivable
under an Eligible Lease.
"Eligible Receivable" means an Eligible Lease
Receivable, an Eligible Customer Note Receivable or an
Eligible Vendor Note Receivable.
"Eligible Vendor Note" means a Vendor Note which
satisfies all of the following requirements: (i) it is the
valid and enforceable obligation of the maker thereof; (ii)
it is a negotiable instrument and the maker thereof has
waived all defenses as against any assignee of the Company
or subsequent holder thereof; (iii) the collateral security
therefor is subject to a first and prior perfected Lien in
favor of the Company and is not subject to any other Lien;
(iv) each Lease securing payment or performance thereof
meets all of the requirements of an Eligible Lease except
that the maker of the Vendor Note is the lessor under such
Lease and the owner thereof; (v) no payment with respect
thereto is more than 60 days past due, and there exists no
other material default by the maker thereof of any of its
obligations thereunder or under any assignment, security
agreement or other document executed by the maker thereof in
connection therewith; and (vi) there exist no setoffs,
counterclaims or defenses of or disputes with the maker with
respect thereto. A Vendor Note which initially was an
Eligible Vendor Note, but subsequently fails to satisfy any
of the above requirements, shall cease to be an Eligible
Vendor Note.
"Eligible Vendor Note Receivable" means a Vendor Note
Receivable under an Eligible Vendor Note; provided, however,
that the maximum dollar amount of Vendor Note Receivables
which shall be considered as Eligible Vendor Note
Receivables shall be limited to not more than 50% of the
Company's Consolidated Tangible Net Worth in the case of any
one maker of Vendor Notes in each case as set forth in the
most recent Compliance Certificate delivered pursuant to
Section 9.1(d).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of
similar import, together with the regulations thereunder, in
each case as in effect from time to time. References to
sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" means any corporation, partnership,
or other trade or business (whether or not incorporated)
that is, along with the Company, a member of a controlled
group of corporations or a controlled group of trades or
businesses, as described in Sections 414(b) and 414(c),
respectively, of the Code or Section 4001 of ERISA, or a
member of the same affiliated service group within the
meaning of Section 414(m) of the Code.
"Eurocurrency Reserve Requirement" means, with respect
to any Eurodollar Loan for any Interest Period, the maximum
aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed
under Regulation D on Eurocurrency liabilities. For
purposes of this Agreement, any Eurodollar Loans hereunder
shall be deemed to be "Eurocurrency liabilities," as defined
in Regulation D, and, as such, shall be deemed to be subject
to such reserve requirements without the benefit of, or
credit for, proration, exceptions or offsets which may be
available to the Bank from time to time under Regulation D.
"Eurodollar Loan" means any Loan which bears interest
at a rate determined with reference to the Interbank Rate
(Reserve Adjusted).
"Eurodollar Revolving Loan" means any Revolving Loan
which bears interest at a rate determined with reference to
the Interbank Rate (Reserve Adjusted).
"Eurodollar Term Loans" means the Term Loans which at
any time bear interest at a rate determined with reference
to the Interbank Rate (Reserve Adjusted).
"Event of Default" means any of the events described in
Section 12.1.
"Federal Funds Funding Rate" means, with respect to any
Loan bearing interest at the Floating Rate for any day, the
rate per annum (rounded upward to the next highest 1/8 of 1%
if not already an integral multiple of 1/8 of 1%) equal to
the consensus (or if no consensus exists, the arithmetic
average) of the rates at which reserves are offered by
first-class banks to other first-class banks at
approximately 10:00 a.m. (Chicago time) on such day (or if
such day is not a Business Day, on the immediately preceding
Business Day) on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal
funds brokers, received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent
in its sole discretion.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System or any successor thereto.
"First Chicago" means The First National Bank of
Chicago in its individual capacity and its successors.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of 12 consecutive
calendar months ending on the 30th day of June. References
to a Fiscal Year with a number corresponding to any calendar
year (e.g. "Fiscal Year 1995") refer to the Fiscal Year
ending on the 30th day of June occurring during such
calendar year.
"Floating Rate" means, for any day, a fluctuating
rate per annum equal to the lesser of (i) the Reference Rate
in effect on such day or (ii) a rate per annum equal to the
Federal Funds Funding Rate in effect on such day plus .70%
per annum. If for any reason the Agent shall have
determined (which determination shall be conclusive in the
absence of manifest error) that it is unable (after
reasonable effort) to ascertain the Federal Funds Funding
Rate for any reason (including, without limitation, the
inability of the Agent to obtain sufficient bids or
publications in accordance with the terms hereof), the
Floating Rate shall be a fluctuating rate per annum equal to
the Reference Rate in effect from time to time until the
circumstances giving rise to such inability no longer exist.
"Floating Rate Loan" means any Loan which bears
interest at a rate determined with reference to the Floating
Rate.
"Floating Rate Revolving Loan" means any Revolving Loan
which bears interest at a rate determined with reference to
the Floating Rate.
"Floating Rate Term Loan" means the Term Loans when
they bear interest at a rate determined with reference to
the Floating Rate.
"GAAP" means United States generally accepted
accounting principles.
"Indebtedness" of any Person means, without
duplication, (i) any obligation of such Person for borrowed
money, including, without limitation, (a) any obligation of
such Person evidenced by bonds, debentures, notes or other
similar debt instruments, and (b) any obligation for
borrowed money which is non-recourse to the credit of such
Person but which is secured by a lien on any asset of such
Person, (ii) any obligation of such Person on account of
deposits or advances, (iii) any obligation of such Person
for the deferred purchase price of any property or services,
except Trade Accounts Payable, (iv) any obligation of such
Person as lessee under a Capitalized Lease, (v) any
Indebtedness of another Person secured by a Lien on any
asset of such first Person, whether or not such Indebtedness
is assumed by such first Person, and (vi) net liabilities
under interest rate swap, exchange or cap agreements which
are not associated with specific debt instruments. For all
purposes of this Agreement, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint
venturer.
"Interbank Rate (Reserve Adjusted)" means, for any
Interest Period, the rate per annum for deposits in U.S.
Dollars for the number of days comprising such Interest
Period, adjusted for reserves, which appears on the Dow
Xxxxx Telerate Service Page 3750 as of 11:00 a.m., London
time, two Banking Days prior to the first day of such
Interest Period (or such day two Banking Days before the day
a Revolving Loan is made). If such rate does not appear on
such page (or such other page as may replace that page on
that service, or if such service is no longer offered, such
other service for displaying LIBOR or comparable rates as
may be selected by Agent after consultation with the
Company), the rate shall be the Reference Bank Rate. The
"Reference Bank Rate" shall be determined on the basis of
the rates at which deposits in U.S. Dollars are offered by
First Chicago as of 11:00 a.m., London time, two Banking
Days prior to the first day of such interest period (or two
Banking Days before the day a Revolving Loan is made),
adjusted for reserves, in the approximate amount of First
Chicago's Eurodollar Loan and having a maturity
approximately equal to such Interest Period.
"Interest Period" means, with respect to any Eurodollar
Loan, the period commencing on the borrowing date of such
Eurodollar Loan, or the date a Floating Rate Loan is
converted into such Eurodollar Loan, or the last day of the
prior Interest Period for such Eurodollar Loan, as the case
may be, and ending on the numerically corresponding day one,
two, three or six months thereafter, as selected by the
Company pursuant to Section 3.2 or Section 3.3; provided
that:
(a) any Interest Period which would otherwise end on a
day which is not a Banking Day shall end on the next
succeeding Banking Day unless such next succeeding Banking
Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Banking Day;
(b) any Interest Period which begins on the last
Banking Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Banking Day of the calendar month at the end of such
Interest Period;
(c) no Interest Period for a Eurodollar Revolving Loan
shall extend beyond the Conversion Date; and
(d) if any Interest Period includes a date on which a
principal repayment is to be made on the Term Loans, (x) the
principal amount of the Term Loans to be repaid on such date
shall have an Interest Period ending on such date, and (y)
the remainder of the Term Loans, if any, shall have an
Interest Period as set forth above.
"Investment" means any investment, made in cash or by
delivery of any kind of property or asset, in any Person,
whether by acquisition of shares of stock or similar
interest, Indebtedness or other obligation or security, or
by loan, advance or capital contribution, or otherwise, but
shall not include the purchase by the Company of property
for lease or sale in the ordinary course of its business.
"Lease" means any contract or agreement for the leasing
of personal property.
"Lease Receivable" with respect to a Lease means, at
any time of determination, without duplication, amounts due
or to become due to the Company under such Lease.
"Lending Installation" means, with respect to a Bank,
any office, branch, subsidiary or affiliate of such Bank.
"Liabilities" means all of the liabilities, obligations
and indebtedness of the Company to the Agent or any Bank of
any kind or nature under or in connection with this
Agreement and the other Loan Documents, however created,
arising or evidenced, whether direct or indirect, absolute
or contingent, now or hereafter existing or due or to become
due.
"Lien" means any mortgage, pledge, hypothecation,
judgment lien or similar legal process, title retention
lien, or other lien or security interest, including, without
limitation, the interest of a vendor under any conditional
sale or other title retention agreement and the interest of
a lessor under any Capitalized Lease.
"Loan Document" means this Agreement, the Notes and
each other document, instrument or agreement executed and/or
delivered pursuant hereto or in connection herewith, as any
thereof may be amended, modified, restated or replaced from
time to time.
"Loans" means the Revolving Loans made pursuant to
Section 2.1, and the Term Loans made pursuant to Section
2.2. Each Loan shall be a Floating Rate Loan or a Eurodollar
Loan (each of which shall be a "type" of Loan).
"Majority Banks" means those Banks whose share in the
aggregate Loans outstanding constitutes (or, if no Loans are
outstanding, those whose aggregate Percentages constitutes)
at least sixty-six and two-thirds percent (66 2/3%).
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a) (3) of ERISA which is maintained
for employees of the Company or any ERISA Affiliate.
"Net Assets of Securitization Subsidiaries" means, as
of any date of determination, the difference (but not below
zero) between (i) the total cash and net Lease Receivables
of all Securitization Subsidiaries determined in accordance
with GAAP as shown on the consolidated balance sheet of the
Company (after eliminating intercompany items) at such date
of determination, minus (ii) the total lease-backed
obligations and liquidity or similar loan obligations of all
Securitization Subsidiaries determined in accordance with
GAAP as shown on the consolidated balance sheet of the
Company (after eliminating intercompany items) at such date
of determination.
"Non-Recourse Debt" means Indebtedness of the Company
or any Securitization Subsidiary for which the Company or
such Securitization Subsidiary is not personally liable and
which is incurred for the express purpose of purchasing or
financing one or more leases or items of property, wherein
repayment of such Indebtedness may be satisfied only out of
the value of said lease or property (including residuals)
and the income and proceeds thereof or there from, and not
against the Company or such Securitization Subsidiary
personally or any of its other property or assets (other
than Restricted Cash).
"Notes" mean the Revolving Notes referred to in Section
4.1, and the Term Notes referred to in Section 4.2.
"Notice of Assignment" has the meaning assigned to such
term in Section 15.3.
"OEC Inflation Index" shall have the meaning ascribed
to such term in Section 9.24.
"Original Equipment Cost" shall have the meaning
ascribed to such term in Section 9.24.
"Participant" has the meaning ascribed to such term in
Section 15.2.
"Payment Date" means (a) as to any Eurodollar Loan, the
last day of each Interest Period with respect thereto and,
if such Interest Period is in excess of three months, the
day three months after the commencement of such Interest
Period, (b) as to any Floating Rate Loan, the last day of
each March, June, September and December, commencing on the
first of such days to occur after such Floating Rate Loan is
made or a Eurodollar Loan is converted to a Floating Rate
Loan, and (c) as to any fees, the last day of each March,
June, September and December, commencing on the first such
date to occur after the date hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions
under ERISA.
"Pension Plan" means a "pension plan", as such term is
defined in section 3(2) of ERISA, which is subject to Title
IV of ERISA (other than a Multiemployer Plan), and to which
the Company or any ERISA Affiliate, may have liability,
including any liability by reason of having been a
substantial employer within the meaning of section 4063 of
ERISA at any time during the preceding five years, or by
reason of being deemed to be a contributing sponsor under
section 4069 of ERISA.
"Percentage" means as to any Bank, the percentage of
such Bank of the Credit, as set forth opposite such Bank's
signature hereto or in an Assignment and Acceptance
Agreement executed by such Bank, as adjusted from time to
time pursuant to Section 15.3.
"Permitted Investment" means any of the following
maintained by the Company or any Subsidiary, or any Bank on
behalf of the Company or any Subsidiary, with such Bank:
(a) any evidence of indebtedness issued or guaranteed
by the government of the United States of America,
maturing not more than one year from the date of
measurement;
(b) commercial paper, maturing not more than one year
after date of issue and rated P-1 or P-2 by Xxxxx'x
Investors Service, Inc. or A-I or A-2 by Standard &
Poor's Corporation, issued by a corporation organized
under the laws of any State of the United States of
America;
(c) any certificate of deposit or acceptance, maturing
not more than one year from the date of measurement,
issued by any Bank or a commercial banking institution
which is a member of the Federal Reserve System and
which has a combined capital and surplus and undivided
profits of not less than $100,000,000; and
(d) money market funds sponsored by insurance
companies, investment banking firms or commercial
banking institutions which are members of the Federal
Reserve System, provided such fund has assets of not
less than $100,000,000.
"Person" means an individual, partnership, corporation,
trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or
political subdivision thereof, or other entity.
"Plan" means any Pension Plan or Welfare Plan.
"Prior Credit Agreement" means that certain Amended and
Restated Credit Agreement, dated as of December 9, 1994, as
amended, among the Company, First Union National Bank of
North Carolina and the other Banks (as defined therein).
"Purchaser" has the meaning ascribed to such term in
Section 15.3.
"Receivable Discount Rate" for any Lease or Vendor Note
at any date of determination means the greater of (a) the
sum of (i) the rate per annum at which Dollar deposits in
immediately available funds are offered to First Chicago in
the interbank eurodollar market at or about 11:00 a.m.,
Chicago time on such date of determination, for delivery on
such date, for a period of twenty-four (24) months and in an
amount of $1,000,000, plus (ii) one and one-half percentage
points (1.5%) and (b) the Floating Rate.
"Reference Rate" means, at any time, the rate of
interest then most recently announced by First Chicago at
Chicago, Illinois as its corporate base rate, which may not
necessarily be its lowest lending rate. For purposes of
this Agreement and the Notes, each change in the Floating
Rate due to a change in the Reference Rate shall take effect
on the effective date of the change in the Reference Rate.
"Related Party" means, for purposes of Section 9.28
only, any Person (other than the Company or a Subsidiary)
(i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under
common control with, the Company, (ii) which beneficially
owns or holds 5% or more of the equity interest of the
Company, or (iii) 5% or more of the equity interest of
which-is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person,
whether through the ownership of voting securities, by
contract or otherwise.
"Reportable Event" has the meaning given to such term
in ERISA.
"Residual" means, with respect to a Lease, the amount
determined by the Company at the commencement of the Lease
term (as thereafter reduced or increased, as appropriate, as
the result of appropriate changes in circumstances) as the
estimated amount to be realized by the Company with respect
to the sale or other disposition of the property subject to
the Lease as of the expiration of the primary Lease term.
Any determination by the Company to increase the amount of
Residual with respect to a Lease in a material amount after
the initial determination thereof shall be supported by such
evidence as shall be reasonably acceptable to the Agent and
the Majority Banks.
"Restricted Cash" means, with respect to the Company or
any Subsidiary (including a Securitization Subsidiary), the
aggregate amount required to be maintained by the Company or
such Subsidiary in reserve, spread or cash collateral
accounts established and maintained pursuant to agreements
entered into by the Company or such Subsidiary for the
borrowing of money or the financing of Leases or other
chattel paper.
"Revolving Loan Commitment" means, relative to any
Bank, such Bank's obligation to make Revolving Loans
pursuant to Section 2.1 in an amount equal to its Percentage
of each Borrowing of Revolving Loans, up to a maximum of its
Percentage of the Revolving Loan Commitment Amount.
"Revolving Loan Commitment Amount" means, on any date
of determination, the lesser of (a) the Borrowing Base and
(b) $30,000,000 (as such amount may be reduced from time to
time pursuant to Section 6.5).
"Revolving Loans" means the Loans described in Section
2.1 and shall be Floating Rate Revolving Loans or Eurodollar
Revolving Loans.
"Revolving Note" means a promissory note of the
Company, in the form set forth as Exhibit A, with
appropriate insertions, as such promissory note may be
amended, modified or supplemented from time to time, and the
term "Revolving Note" shall include any substitutions for,
or renewals of, such promissory note.
"Securitization Subsidiary" means any wholly-owned
Subsidiary exclusively engaged in financing, and activities
related to financing, leases or installment purchase
contracts (and the rights thereunder) entered into or owned
by the Company or a wholly-owned Subsidiary, as the case may
be, the Company's or a wholly-owned Subsidiaries interest in
any equipment or other assets which are the subject of any
such lease or contract, all monies due or to become due with
respect to any of the foregoing, all rights and interests in
insurance policies with respect to any of the foregoing and
cash in an amount up to the aggregate reserve or credit
enhancement requirements, if any, which the Company or such
Subsidiary, as the case may be, is obligated to fund under
the documents governing the securitization of such assets by
such Subsidiary.
"Subordinated Debt" means Indebtedness of the Company
or any Subsidiary which is subordinated to payment of the
Notes; provided, however, Non-Recourse Debt shall not be
considered Subordinated Debt.
"Subsidiary" means any Person of which or in which the
Company and its other Subsidiaries own directly or
indirectly 50% or more of (i) the combined voting power of
all classes of stock having general voting power under
ordinary circumstances to elect a majority of the board of
directors of such Person, if it is a corporation, (ii) the
capital interest, profits interest or membership interest of
such Person, if it is a partnership, limited liability
company, joint venture or similar entity, or (iii) the
beneficial interest of such Person, if it is a trust,
association or other unincorporated organization.
"Taxes" with respect to any Person means taxes,
assessments or other governmental charges or levies imposed
upon such Person, its income or any of its properties,
franchises or assets.
"Term Loan Commitment" means, relative to any Bank,
such Bank's obligation to make a Term Loan pursuant to
Section 2.2.
"Term Loan Commitment Amount" means the outstanding
principal balance of the Revolving Loans on the Conversion
Date, but in any event not more than the Revolving Loan
Commitment Amount.
"Term Loans" means the Loans described in Section 2.2
and shall be Floating Rate Term Loans or Eurodollar Term
Loans.
"Term Note" means a promissory note of the Company, in
the form set forth as Exhibit B, with appropriate
insertions, as such promissory note may be amended, modified
or supplemented from time to time, and the term "Term Note"
shall include any substitutions for, or renewals of, such
promissory note.
"Trade Accounts Payable" of any Person means trade
accounts payable of such Person incurred in the ordinary
course of such Person's business.
"Transferee" has the meaning ascribed to such term in
Section 15.4.
"Unmatured Event of Default" means an event or
condition which with the lapse of time or giving of notice
to the Company, or both, would constitute an Event of
Default.
"Unrestricted Cash" means cash other than Restricted
Cash.
"Vendor Note" means
(a) any promissory note (i) which is made payable
to the order of the Company by a lessor or seller of
personal property, (ii) which evidences a loan made by
the Company to, or was purchased by the Company from,
such lessor or seller, and (iii) the payment of which
is secured, pursuant to the terms thereof or of one or
more separate assignments or security agreements
executed by the maker of such promissory note, by one
or more Leases, purchase money notes, installment sale
contracts or other chattel paper owned by such lessor
or seller, and by the property which is the subject of
such Lease(s), purchase money notes, installment sale
contract(s) or other chattel paper;
(b) any promissory note (i) which is made payable
to a seller of personal property (which may be the
Company), (ii) which, if it is made payable to a seller
of personal property other than the Company, was
purchased by the Company from such seller or its
assignee, and (iii) the payment of which is secured
pursuant to the terms thereof or of one or more
separate assignments or security agreements executed by
the maker of such promissory note, by the property
which is sold (in whole or in part) in consideration
for such promissory note; and
(c) any installment sale contract or other chattel
paper (i) pursuant to which any payment is to be made
to a seller of personal property (which may be the
Company), (ii) as to which the right to the payments to
such seller, if it is not the Company, was purchased by
the Company from such seller or its assignee, and (iii)
payments under which are secured pursuant to the terms
thereof or of one or more separate assignments or
security agreements executed by the obligor under such
installment sale contract or other chattel paper, by
the property which is sold (in whole or in part)
pursuant to such installment sale contract or other
chattel paper.
"Vendor Note Receivable" with respect to a Vendor Note
means, at any time of determination, without duplication,
amounts due or to become due to the Company under such
Vendor Note.
"Welfare Plan" means a "welfare plan", as such term is
defined in section 3(1) of ERISA.
1.2 Other Definitional Provisions. Unless otherwise
defined or the context otherwise requires, all financial and
accounting terms used herein or in any certificate or other
document made or delivered pursuant hereto shall be defined in
accordance with GAAP. Unless otherwise defined therein, all
terms defined in this Agreement shall have the defined meanings
when used in any Note or in any certificate or other document
made or delivered pursuant hereto.
1.3 Interpretation of Agreement. A Section or an
Exhibit or a Schedule is, unless otherwise stated, a reference to
a section hereof or an exhibit or schedule hereto, as the case
may be. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this
Agreement. The words "hereof," "herein," "hereto" and
"hereunder" and words of similar purport when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
1.4 Compliance with Financial Restrictions. Where the
character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or
other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles
are inconsistent with the specific provisions of this Agreement.
For purposes of this Agreement, GAAP shall be determined on the
basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited
financial statements referred to in Section 8.6. In the event
that any Accounting Changes (as defined below) shall occur and
such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then
the Company and the Banks agree to enter into negotiations in
order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating the financial condition of the
Company and its consolidated Subsidiaries shall be the same after
such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been
executed and delivered by the parties thereto, all financial
covenants, standards and terms in this Agreement shall continue
to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" means: changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants
or, if applicable, the Securities and Exchange Commission (or
successors thereto or agencies with similar functions).
2. COMMITMENT OF THE BANKS
Subject to the terms and conditions of this Agreement
and in reliance upon the warranties of the Company herein set
forth, each Bank, severally for itself alone, and not jointly,
agrees:
2.1 Revolving Loans. To make loans (collectively
called the "Revolving Loans" and individually called a "Revolving
Loan") to the Company, which Revolving Loans the Company may
repay and reborrow during the period from the date hereof to, but
not including, the Conversion Date, in an amount equal to its
Percentage of each Borrowing of Revolving Loans as the Company
may from time to time request, but not exceeding in the aggregate
at any one time outstanding, such Bank's Revolving Loan
Commitment.
2.2 Term Loan. To make a loan (the "Term Loan") on
the Conversion Date in an amount equal to its Percentage of the
Borrowing of Term Loans as the Company may request, but not
exceeding such Bank's Term Loan Commitment; provided, however,
that the proceeds of each Bank's Term Loan shall be applied to
the extent necessary to the concurrent payment in full of the
aggregate principal amount of the Revolving Loans from such Bank
outstanding on the Conversion Date plus accrued interest thereon.
3. LOAN OPTIONS; BORROWING PROCEDURES;
CONTINUATION/CONVERSION OF LOANS; CERTAIN LOAN TERMS
3.1 Loan Options. Each Loan shall be a Floating Rate
Loan or a Eurodollar Loan, as shall be selected by the Company,
except as otherwise provided herein. If the Company fails to
make any such selection, such Loan shall be a Floating Rate Loan.
Before the Conversion Date, any combination of types of Revolving
Loans may be outstanding at the same time. After the Conversion
Date, the Term Loan shall be denominated as either a Floating
Rate Term Loan or a Eurodollar Term Loan, except as otherwise
provided herein.
3.2 Borrowing Procedures.
(a) The Company shall give the Agent prior written or
telephonic notice of each requested Borrowing, which shall
be of the same type of Loan. Each such notice shall be
irrevocable and, in addition to the information required
pursuant to Section 3.2(b), shall specify (i) the borrowing
date (which shall be a Banking Day), (ii) the amount and
type of Loan, and (iii) if the Borrowing is to be of
Eurodollar Loans, the initial Interest Period for such
Loans. Each notice of a Borrowing of Floating Rate Loans
shall be received by the Agent not later than 11:00 a.m.,
Chicago time on the borrowing date with respect to such
requested Borrowing and each notice of Borrowing of
Eurodollar Loans shall be received by the Agent not later
than 11:30 a.m., Chicago time at least three Banking Days
prior to the borrowing date with respect to such requested
Borrowing. Each Borrowing of Floating Rate Revolving Loans
and of Eurodollar Revolving Loans shall be in a minimum
aggregate amount of $100,000 or an integral multiple of
$50,000 in excess thereof. The Company shall promptly
confirm any telephonic notice of a request for a Borrowing
of Revolving Loans or Term Loans in writing not later than
the next following Banking Day by delivering to the Agent a
confirmation (the "Confirmation") in the form of Exhibit C
hereto, it being understood, however, that the Company's
failure to confirm any telephonic notice or otherwise comply
with the provisions of this Section 3.2 shall not affect the
obligation of the Company to repay each Loan in accordance
with the terms of this Agreement and the applicable Note.
(b) On or before 2:00 p.m. Chicago time on the Banking
Day of a requested Borrowing, each Bank shall deposit with
the Agent same day funds in an amount equal to such Bank's
Percentage of the requested Borrowing. Such deposit will be
made to an account which the Agent shall specify from time
to time by notice to the Banks. To the extent funds are
received from the Banks, and provided all the conditions
precedent to the making of the requested Loans have been
satisfied (unless waived in accordance with the provisions
of this Agreement), subject to the terms of Section 2.2 the
Agent shall make a wire transfer to account number 0000000
maintained by the Company with Bank of America (#071-000039)
or otherwise at the Company's direction. No Bank's
obligation to make any Loan shall be affected by any other
Bank's failure to make any Loan.
3.3 Continuation and/or Conversion of Loans. The
Company may irrevocably elect to (i) continue any outstanding
Eurodollar Loan from the current Interest Period for such Loan
into a subsequent Interest Period to begin on the last day of
such current Interest Period, or (ii) convert any outstanding
Floating Rate Loan into a Eurodollar Loan, or (iii) convert any
outstanding Eurodollar Loan into a Floating Rate Loan on the last
day of the current Interest Period for such Eurodollar Loan, by
giving the Agent prior written or telephonic notice of such
continuation or conversion; provided, however, that each such
conversion or continuation shall be prorated among the applicable
outstanding Loans of all Banks. Each notice of a conversion into
a Floating Rate Loan shall be received by the Agent not later
than 11:00 a.m. (Chicago time) on the effective date of such
conversion and each notice of a conversion into, or continuation
of, a Eurodollar Loan shall be received by the Agent not later
than 11:30 a.m. (Chicago time) at least three Banking Days prior
to the effective date of such continuation or conversion. Each
such notice shall specify (a) the effective date of continuation
or conversion (which shall be a Banking Day), (b) the type of
Loan the Loan is to be continued as or converted into and the
amount of such Loan, and (c) the Interest Period for such Loan,
if applicable. The Company shall promptly confirm each such
telephonic notice in writing. Absent timely notice of
continuation or conversion, each Eurodollar Loan shall, on the
last day of the current Interest Period for such Loan unless paid
in full on such last day, convert into a Floating Rate Loan. No
Loan shall be converted into a Eurodollar Loan and no Eurodollar
Loan shall be continued at any time that an Event of Default or
an Unmatured Event of Default shall exist.
3.4 Funding Losses. The Company will indemnify each
Bank upon demand against any loss or expense which such Bank may
sustain or incur (including, without limitation, any loss or
expense sustained or incurred in obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or
maintain any Loan) as a consequence of (i) any failure of the
Company to make any payment when due (including after giving
notice of prepayment) of any amount due hereunder or under any
Note, (ii) any failure of the Company to borrow, continue or
convert a Loan on a date specified therefor or in a notice
thereof, or (iii) any payment (including, without limitation, any
payment pursuant to Section 7.3 or Section 12.2), prepayment or
conversion of any Eurodollar Loan on a date other than the last
day of the Interest Period for such Loan. A certificate of such
Bank setting forth the calculations and the amount or amounts as
shall be necessary to indemnify such Bank as specified in this
Section 3.4 shall be delivered to the Company and shall be
conclusive in the absence of manifest error.
3.5 Capital Adequacy. If any Bank shall reasonably
determine that the application or adoption of any law, rule,
regulation, directive, interpretation, treaty or guideline
regarding capital adequacy, or any change therein or in the
interpretation or administration thereof, whether or not having
the force of law (including, without limitation, application of
changes to Regulation H and Regulation Y of the Federal Reserve
Board issued by the Federal Reserve Board on January 19, 1989 and
regulations of the Comptroller of the Currency, Department of the
Treasury, 12 CFR Part 3, Appendix A, issued by the Comptroller of
the Currency on January 27, 1989 and any corresponding capital
regulations promulgated by regulatory authorities outside the
United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices
Entitled "International Convergence of Capital Measurements and
Capital Standards") increases the amount of capital required or
expected to be maintained by such Bank or any Person controlling
such Bank, and such increase is based upon the existence of such
Bank's obligations hereunder and other commitments of this type,
then from time to time, within 10 days after demand from such
Bank, the Company shall pay to such Bank such amount or amounts
as will compensate such Bank or such controlling Person, as the
case may be, for such increased capital requirement. The
determination of any amount to be paid by the Company under this
Section 3.5 shall take into consideration the policies of such
Bank or any Person controlling such Bank with respect to capital
adequacy and shall be based upon any reasonable averaging,
attribution and allocation methods. A certificate of such Bank
setting forth the calculations and amount or amounts as shall be
necessary to compensate such Bank as specified in this Section
3.5 shall be delivered to the Company and shall be conclusive in
the absence of manifest error.
4. NOTES EVIDENCING BORROWINGS.
4.1 Notes Evidencing Revolving Loans. Each
Bank's Revolving Loans shall be evidenced by a Revolving Note,
which shall be made payable to the order of such Bank, dated the
date of this Agreement, and shall mature on the Conversion Date.
All Revolving Loans made by each Bank to the Company pursuant to
this Agreement and all payments of principal shall be evidenced
by such Bank in its records or, at its option, on the schedule
(or any continuation thereof) attached to its respective
Revolving Note, which records or schedule shall be rebuttable
presumptive evidence of the subject matter thereof.
4.2 Notes Evidencing Term Loans. Each Bank's
Term Loan shall be evidenced by a separate Term Note, which shall
be made payable to the order of such Bank, dated the Conversion
Date, and shall be payable in eight (8) consecutive, equal
quarterly installments payable on the last day of each March,
June, September and December, commencing with the first of such
dates to occur after the date of such Bank's Term Loan.
5. INTEREST AND FEES.
5.1 Interest - Revolving Loans. The unpaid
principal amount of the Floating Rate Revolving Loans shall bear
interest to maturity at a rate per annum equal to the Floating
Rate in effect from time to time and shall be payable on each
Payment Date and at maturity. The unpaid principal amount of the
Eurodollar Revolving Loans shall bear interest to maturity at a
rate per annum equal to the Interbank Rate (Reserve Adjusted) in
effect for each Interest Period with respect to such Eurodollar
Revolving Loan plus .75%. Accrued interest on Eurodollar
Revolving Loans shall be payable on the last day of its
applicable Interest Period, on any date when such Loan is paid
(by acceleration or otherwise) and at maturity.
5.2 Interest - Term Loans.
(a) Floating Rate Term Loans. The unpaid
principal of the Floating Rate Term Loans shall bear
interest to maturity at a rate per annum equal to the
Floating Rate in effect from time to time plus one-quarter
of one percentage point (1/4%). Accrued interest on the
Floating Rate Term Loans shall be payable on each Payment
Date and at maturity.
(b) Eurodollar Term Loans. The unpaid principal
of the Eurodollar Term Loans shall bear interest to maturity
at a rate per annum equal to the Interbank Rate (Reserve
Adjusted) in effect for each Interest Period with respect to
such Eurodollar Term Loan plus one percentage point (1%).
Accrued interest on Eurodollar Term Loans shall be payable
on the last day of its applicable Interest Period, on any
date when such Loan is paid, (whether by acceleration or
otherwise) and at maturity.
5.3 Interest after Maturity. The Company shall
pay to the Banks interest on any amount of principal of any Loan
which is not paid when due, whether at stated maturity, by
acceleration or otherwise, accruing from and including the date
such amount shall have become due to (but not including) the date
of payment thereof in full at the rate per annum which is equal
to the greater of (i) two percentage points (2%) in excess of the
rate applicable to the unpaid amount immediately before it became
due, or (ii) two and one-half percentage points (2 1/2%) in
excess of the Floating Rate from time to time in effect.
Interest after maturity shall be payable on demand.
5.4 Commitment Fee. The Company agrees to pay to
the Banks, ratably in accordance with their respective
Percentages, a commitment fee of one-quarter of one percentage
point (1/4%) per annum on the daily average of the excess of (a)
the Revolving Loan Commitment Amount over (b) the aggregate
outstanding Loans, during the period commencing on the date of
this Agreement and ending on the Conversion Date, or, if earlier,
the termination of the Credit. Such commitment fee shall be
payable on each Payment Date and on the Conversion Date or the
date the Credit and the Commitments terminate for any period then
ending for which such commitment fee shall not have been
theretofore paid.
5.5 Method of Calculating Interest and Fees.
Interest and any fees shall be computed on the basis of a year
consisting of 360 days and paid for actual days elapsed. For
each Eurodollar Loan interest shall accrue during each Interest
Period from and including the first day thereof to but excluding
the last day thereof.
6. PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION OF THE
CREDIT, EXTENSION OF REVOLVING LOAN COMMITMENTS,
SETOFF.
6.1 Place of Payment. All payments hereunder
(including payments with respect to the Notes) shall be made
without setoff or counterclaim and shall be made to the Agent for
the account of the Banks, ratably in accordance with their
Percentages, in immediately available funds prior to 12:00 noon
(local time), on the date due at the Agent's office at Xxx Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 or at such other place or
for such other account as may be designated by the Agent to the
Company in writing. The Agent shall promptly remit in
immediately available funds to each Bank its share of all such
payments received by the Agent for the account of such Bank. Any
payments received after such time shall be deemed received on the
next Banking Day. Subject to the definition of the term
"Interest Period," whenever any payment to be made hereunder or
under any Note shall be stated to be due on a date other than a
Banking Day, such payment may be made on the next succeeding
Banking Day, and such extension of time shall be included in the
calculation of interest or any fees.
6.2 Mandatory Prepayments. If at any time the
outstanding principal amount of the Loans exceeds the Borrowing
Base, the Company shall immediately make a prepayment to the
Agent, for the account of the Banks, of the principal amount of
the Loans in the amount necessary to eliminate such excess. If a
prepayment is required prior to the Conversion Date pursuant to
this Section 6.2, the prepayment shall be applied first to
reduction of the Floating Rate Revolving Loans and then to the
Eurodollar Revolving Loans, until the Revolving Loans are repaid
in full. If a payment is required under this Section 6.2 after
the Conversion Date, the prepayment shall be applied to the
unpaid installments of the Term Note in the inverse order of
their maturities. Any repayment of principal of any Note
pursuant to this Section 6.2 shall include accrued interest to
the date of payment on the principal amount being prepaid. Any
repayment of Loans shall be made pro rata among Loans of the same
type and, if applicable, the same Interest Period or maturity
date, of all of the Banks.
6.3 Optional Prepayments - Revolving Loans.
(a) The Company may from time to time, upon prior
written or telephonic notice received by the Agent (which shall
promptly advise each Bank thereof) no later than 11:00 a.m.
Chicago Time on a Banking Day, prepay the principal of the
Floating Rate Revolving Loans in whole or in part, as
contemplated by Section 2.1; provided, however, that (a) any
partial prepayment of principal shall be in a minimum amount of
$100,000 and in an integral multiple of $50,000 and (b) any such
prepayment shall be made pro rata among Loans of the same type.
(b) The Company may from time to time, upon at
least one Banking Day's prior written or telephonic notice
received by the Agent (which shall promptly advise each Bank
thereof) not later than 11:00 a.m. Chicago time, prepay the
principal of the Eurodollar Revolving Loans in whole or in part,
as contemplated by Section 2.1; provided, however, that (a) any
partial prepayment of principal shall be in a minimum amount of
$100,000 and in an integral multiple of $50,000 and (b) any such
prepayment shall be made pro rata among Loans of the same type
and, if applicable, having the same Interest Period of all Banks;
and provided, further, that prepayment of principal of a
Eurodollar Revolving Loan on a day other than the last day of the
Interest Period with respect thereto shall be subject to the
indemnification provisions of Section 3.4, but shall otherwise be
without any premium or penalty. The Company shall promptly
confirm any telephonic notice of prepayment in writing.
6.4 Optional Prepayments - Term Loan. The
Company may from time to time, upon at least one Banking Days'
prior written or telephonic notice received by the Agent (which
shall promptly advise each Bank thereof), prepay the principal of
the Term Loans in whole or in part; provided, however, that (a)
any partial prepayment of principal shall be in a minimum amount
of $100,000 and in an integral multiple of $50,000 and shall be
applied to the unpaid installments of the Term Loans in the
inverse order of their maturities and (b) any such prepayment
shall be made pro rata among Loans of the same type and, if
applicable, having the same Interest Period, of all Banks; and
provided, further, that prepayment of principal of a Eurodollar
Term Loan on a day other than the last day of the Interest Period
with respect thereto shall be subject to the indemnification
provisions of Section 3.4, but shall otherwise be without any
premium or penalty. The Company shall promptly confirm any
telephonic notice of prepayment in writing. Any prepayment of
the principal of the Term Loans shall include accrued interest to
the date of prepayment on the principal amount being prepaid.
6.5 Reduction or Termination of the Credit. The
Company may from time to time, upon at least five (5) Banking
Days' prior written or telephonic notice received by the Agent
(which shall promptly advise the Banks), irrevocably elect to
permanently reduce the amount of the Credit and the Commitment
Amounts (such reduction to be made among the Banks according to
their respective Percentages), but only upon payment to the
Agent, for the account of the Banks, of the unpaid principal
amount of the Revolving Loans, if any, in excess of the then
reduced amount of the Revolving Credit Commitment Amount, plus
(i) accrued interest to the date of such payment on the principal
amount being repaid and (ii) any amount required to indemnify
each of the Banks pursuant to Section 3.4 in respect of such
payment. Any such reduction shall be in a minimum amount of
$1,000,000 and in an integral multiple of $500,000. The Company
may at any time on like notice irrevocably elect to terminate the
Credit and the Commitments upon payment in full of (a) the
Revolving Loans (or the Term Loans, if applicable), (b) unpaid
accrued interest on Loans to the date of such payment, (c) any
amount required to indemnify any Bank pursuant to Section 3.4 in
respect of such payment, and (d) any other Liabilities of the
Company. The Company shall promptly confirm any telephonic
notice of reduction or termination of the Credit in writing.
6.6 Setoff. In addition to and not in limitation
of all other rights and remedies (including other rights of
setoff) that any Bank or other holder of any Note may have, any
Bank or such other holder shall, upon the occurrence of any Event
of Default described in Section 12.1 or any Unmatured Event of
Default described in Section 12.1(e), have the right to
appropriate and apply to the payment of any and all Loans and
other liabilities of the Company hereunder (whether or not then
due), in such order of application as such Bank or such other
holder may elect, any and all balances, credits, deposits
(general or special, time or demand, provisional or final),
accounts or moneys of the Company then or thereafter with such
Bank or such other holder other than any lock box account and any
other operating account. Any Bank shall promptly advise the
Agent and the Company of any such setoff and application but
failure to do so shall not affect the validity of such setoff and
application. To secure the payment of such Loans and other
liabilities, the Company hereby grants the Agent, for the benefit
of the Banks, the Agent and each such other holder a continuing
security interest in such balances, credits, deposits, accounts
or moneys, and each Bank is hereby appointed and accepts
appointment as the agent of the Agent for purposes of maintaining
and retaining possession of such property. Notwithstanding the
foregoing, each Bank hereby agrees that, if a Person other than
the Company establishes to the reasonable satisfaction of such
Bank and the Agent that any balances, credits or deposits
appropriated and applied by such Bank are properly traceable
proceeds of property owned by such other Person and not by the
Company, and such other Person has a legally enforceable prior
claim to such proceeds under applicable law, such Bank shall,
upon receipt of evidence reasonably satisfactory to such Bank and
the Agent establishing such legally enforceable prior claim of
such other Person, turn over such amounts to the Company or as
otherwise instructed by such other Person.
6.7 Proration of Payments. If any Bank or other
holder of a Note shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Note in
excess of its pro rata share of payments and other recoveries
obtained by all Banks or other holders on account of principal of
and interest on Notes then held by them, such Bank or other
holder shall purchase from the other Banks or holders such
participation in the Notes held by them as shall be necessary to
cause such purchasing Bank or other holder to share the excess
payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing
holder, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
The Company agrees that the Bank so purchasing a participation
from the other Banks under this Section 6.7 may exercise all its
rights of payment, including the right of set-off, with respect
to such participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
6.8 Extension of Conversion Date. Upon the
Company's request and subject to the terms set forth herein, the
Conversion Date may be extended for successive periods of time so
long as each such extension does not extend the Conversion Date
to a date that is more than one year from the first date on which
the Agent has received notices from all of the Banks that each
such Bank has agreed to so extend the Conversion Date. The
Company shall promptly confirm any telephonic notice in writing.
If the Company desires to extend a scheduled Conversion Date, the
Company shall so notify the Agent (which shall promptly notify
each of the Banks) in writing at least ninety (90) days prior to
such scheduled Conversion Date. Each Bank will, at least sixty
(60) days prior to the then scheduled Conversion Date, notify the
Agent (which shall promptly notify the Company) in writing of
such Bank's decision; provided, however, that failure of a Bank
to so notify the Agent shall not constitute such Bank's agreement
to extend the Conversion Date or otherwise obligate such Bank to
do so. Once the Agent receives notices from all of the Banks that
they have agreed to extend the Conversion Date, the Conversion
Date shall be extended to the earlier of (i) the date requested
by the Company and (ii) the date one year from the date on which
the Agent receives notices from all the Banks of their respective
agreements to the extension.
7. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR
LOANS.
7.1 Increased Cost. If, as a result of any law,
rule, regulation, treaty or directive, or any change therein or
in the interpretation or administration thereof, or compliance by
any Bank with any request or directive (whether or not having the
force of law) from any court, central bank, governmental
authority, agency or instrumentality, or comparable agency:
(a) any tax, duty or other charge with respect to
any Eurodollar Loan, any Note or such Bank's obligation to
make Eurodollar Loans is imposed, modified or deemed
applicable, or the basis of taxation of payments to such
Bank of the principal of, or interest on, any Eurodollar
Loan (other than taxes imposed on the overall net income of
such Bank by the jurisdiction in which such Bank has its
principal office) is changed;
(b) any reserve, special deposit, special
assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
such Bank is imposed, modified or deemed applicable; or
(c) any other condition affecting this Agreement
or any Eurodollar Loan is imposed on such Bank or the
relevant market;
and such 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 or under any Note in respect of any of the Eurodollar
Loans is reduced;
then, (i) the Company shall pay to any such affected Bank upon
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 the Company) 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
Requirement), and (ii) provided the Agent has not yet determined
the Interbank Rate (Reserve Adjusted) with respect to new
Eurodollar Loans requested by the Company but not yet borrowed,
at the Company's option by notice to the Agent such request shall
be deemed a request to make Floating Rate Loans. Determinations
by such Bank for purposes of this section of the additional
amounts required to compensate such Bank in respect of the
foregoing shall be conclusive, absent manifest error. In
determining such amounts, such Bank may use any reasonable
averaging, attribution and allocation methods.
7.2 Eurodollar Deposits Unavailable or Interest
Rate Unascertainable. If the Company has any Eurodollar Loan
outstanding, or has notified the Agent of its intention to borrow
a Eurodollar Loan as provided herein, then in the event that
prior to any Interest Period any Bank shall have determined
(which determination shall be conclusive and binding on the
parties hereto) that:
(a) deposits of the necessary amount for the
relevant Interest 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
(Reserve Adjusted) applicable to such Interest Period; or
(b) the making or funding of Eurodollar Loans has
become impracticable as a result of any event occurring
after the date of this Agreement which, in the opinion of
such Bank, materially and adversely affects such Eurodollar
Loans or the Bank's obligation to make such Eurodollar
Loans, or the relevant market;
the affected Bank shall promptly give notice of such
determination to the Company, the Agent and the other Banks, and
(i) any notice of new Eurodollar Loans previously given by the
Company and not yet borrowed or converted shall be deemed a
notice to make an Floating Rate Loan to the extent of the
affected Bank's ratable share of the proposed Borrowing of
Eurodollar Loans, and (ii) the Company shall, at its option, be
obligated either to convert any such Loans to Floating Rate Loans
or prepay in full without premium or penalty, but subject to the
indemnification provisions of Section 3.4, all Borrowings related
to such Loans, on the last day of the then current Interest
Period with respect to such Loans.
7.3 Changes in Law Rendering Eurodollar Loans
Unlawful. If at any time due to the adoption of any law, rule,
regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof by any court, central
bank, governmental authority, agency or instrumentality, or
comparable agency charged with the interpretation or
administration thereof, or for any other reason arising
subsequent to the date hereof, it shall become unlawful or
impossible for any Bank to make or fund any Eurodollar Loan which
it is committed to make hereunder, the obligation of such Bank to
provide such Eurodollar Loans shall, upon the happening of such
event, forthwith be suspended for the duration of such illegality
or impossibility. If any such event shall make it unlawful or
impossible for any Bank to continue any Eurodollar Loans
previously made by it hereunder, such Bank shall, upon the
happening of such event, notify the Company, the Agent and the
other Banks thereof in writing, and the Company shall, on the
earlier of (i) the last day of the then current Interest Period
with respect thereto or (ii) if required by such law, rule,
regulation, treaty, directive or interpretation, on such date as
shall be specified in such notice, either convert each such
unlawful Loan to a Floating Rate Loan or prepay in full the
Borrowing with respect to the unlawful Loan without premium or
penalty, but subject to the indemnification provisions of Section 3.4.
7.4 Funding.
(a) Discretion of each Bank 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 Loans in any
manner it sees fit; it being understood, however, that for
purposes of this Agreement, all determinations hereunder
shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan during the Interest Period
for such Loan through the purchase of deposits having a term
corresponding to such Interest Period and bearing an
interest rate equal, in the case of a Eurodollar Loan, to
the Interbank Rate (Reserve Adjusted) for such Interest
Period (whether or not such Bank shall have granted any
participations in such Loan).
(b) Funding Through the Sale of Participations.
Notwithstanding any provision of this Agreement to the
contrary, the Company acknowledges that any Bank may fund
all or any part of the Loans by it hereunder by sales of
participations to various participants, and agrees that such
Bank may, in invoking its rights under this Section 7 or
under Section 3.4, demand and receive payment for costs and
other amounts incurred by, or allocable to, any such
participant, or take other action arising from circumstances
applicable to any such participant, to the same extent that
such participant could demand and receive payments, or take
other action, under this Section 7 or under Section 3.4 if
such participant were a Bank under this Agreement.
(c) Lending Installations. Each Bank may book its
Loans at any Lending Installation selected by such Bank and
may change its Lending Installation from time to time, so
long as such change does not increase the cost of such Loans
to the Company. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed
held by each Bank for the benefit of such Lending
Installation. Each Bank may, by written or telex notice to
the Agent and the Company, designate a Lending Installation
through which Loans will be made by it and for whose account
Loan payments are to be made.
(d) Non-Receipt of Funds by the Agent. Unless the
Company or a Bank, as the case may be, notifies the Agent
prior to the date on which it is scheduled to make payment
to the Agent of (i) in the case of a Bank, the proceeds of a
Loan or (ii) in the case of the Company, a payment of
principal, interest or fees to the Agent for the account of
the Bank, that it does not intend to make such payment, the
Agent may assume that such payment has been made. The 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 Company, as the case
may be, has not in fact made such payment to the Agent, the
recipient of such payment shall, on demand by the Agent if
the recipient is a Bank and five days after demand if the
recipient is the Company, repay to the 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 the Agent until the date the
Agent recovers such amount at a rate per annum equal to (i)
in the case of payment by a Bank, the Federal Funds Funding
Rate for such day or (ii) in the case of payment by the
Company, the interest rate applicable to the relevant Loan.
7.5 Mitigation. With respect to any obligation
of the Company to make any payment to any Bank pursuant to
Section 7.1 or Section 7.4, the suspension of such Bank's
obligation to provide Eurodollar Loans pursuant to Section 7.3,
or the Company's obligation to convert or prepay Eurodollar Loans
pursuant to Section 7.3, upon the occurrence of any event giving
rise to any such obligation or suspension, such affected Bank
will (a) use its best efforts to change its lending office for
Eurodollar Loans if such change will avoid the need for, or
reduce the amount of, any such payment or prepayment obligation,
or will avoid the need for any such suspension, and if such
change will not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank, and (b) use all
reasonable efforts to minimize any such payment obligation of the
Company.
(a) Withholding Tax Exemption. Prior to becoming
a Bank party to this Agreement, including pursuant to an
assignment pursuant to Section 15.3, each Bank that is not
incorporated under the laws of the United States of America,
or a state thereof, agrees that it will deliver to each of
the Company and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to
receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224
further undertakes to deliver to each of the Company and the
Agent two additional copies of such form (or a successor
form) on or before the date that such form expires
(currently, three successive calendar years for Form 1001
and one calendar year for Form 4224) or becomes obsolete or
after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be
reasonably requested by the Company or the Agent, in each
case certifying that such Lender is entitled to receive
payments under this Agreement and the Notes without
deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender
advises the Company and the Agent that it is not capable of
receiving payments without any deduction or withholding of
United States federal income tax.
8. WARRANTIES. To induce the Banks to grant the
Credit and to make the Loans, the Company warrants that:
8.1 Existence. The Company and all of its
corporate Subsidiaries are corporations duly organized, validly
existing and in good standing under the laws of the states of
their respective incorporation. All of the Company's other
Subsidiaries, if any are entities duly organized, validly
existing and in good standing under the laws of the jurisdictions
of their respective organization. The Company and all of its
Subsidiaries are in good standing and are duly qualified to do
business in each state where, because of the nature of their
respective activities or properties, such qualification is
required.
8.2 Authorization. The Company is duly
authorized to execute and deliver this Agreement and the Notes
and is and will continue to be duly authorized to borrow monies
hereunder and to perform its obligations under this Agreement and
the Notes. The execution, delivery and performance by the
Company of this Agreement and the Notes and the borrowings
hereunder do not and will not require any consent or approval of
any governmental agency or authority.
8.3 No Conflicts. The execution, delivery and
performance by the Company of this Agreement and the Notes do not
and will not conflict with (i) any provision of law, (ii) the
charter or by-laws of the Company, (iii) any agreement binding
upon the Company, or (iv) any court or administrative order or
decree applicable to the Company, and do not and will not
require, or result in, the creation or imposition of any Lien on
any asset of the Company or any of its Subsidiaries.
8.4 Validity and Binding Effect. This Agreement
is, and the Notes when duly executed and delivered will be,
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency
or other similar laws of general application affecting the
enforcement of creditors' rights or by general principles of
equity limiting the availability of equitable remedies.
8.5 No Default. Neither the Company nor any of
its Subsidiaries is in default under any agreement or instrument
to which the Company or any Subsidiary is a party or by which any
of their respective properties or assets is bound or affected,
which default might materially and adversely affect the financial
condition or operations of the Company and its Subsidiaries taken
as a whole. No Event of Default or Unmatured Event of Default
has occurred and is continuing.
8.6 Financial Statements. The Company's audited
consolidated and consolidating financial statement as of June 30,
1995 and the Company's unaudited consolidated and consolidating
financial statement as of September 30, 1995, copies of which
have been furnished to the Agent and the Banks, have been
prepared in conformity with generally accepted accounting
principles applied on a basis consistent with that of the
preceding Fiscal Year and period and present fairly the financial
condition of the Company and its Subsidiaries as of such dates
and the results of their operations for the periods then ended,
subject (in the case of the interim financial statement) to year-end audit
adjustments. Since such dates, there has been no
material adverse change in the financial condition of the Company
and its Subsidiaries taken as a whole.
8.7 Insurance. The certificate signed by the
chief financial officer of the Company that attests to the
property and casualty insurance program carried by the Company
and its Subsidiaries (Schedule 8.7 attached hereto) is complete
and accurate as of the date of this Agreement.
8.8 Litigation. No claims, litigation,
arbitration proceedings or governmental proceedings are pending
or threatened against or are affecting the Company or any of its
Subsidiaries, the results of which might materially and adversely
affect the financial condition or operations of the Company and
its Subsidiaries taken as a whole, except those referred to in a
schedule furnished to the Bank contemporaneously herewith and
attached hereto as Schedule 8.8. Other than any liability
incident to such claims litigation or proceedings or provided for
or disclosed in the financial statements referred to in Section
8.6 or listed on Schedule 8.14, neither the Company nor any of
its Subsidiaries has any contingent liabilities which are
material to the Company and its Subsidiaries taken as a whole.
8.9 Liens. None of the property, revenues or
assets of the Company or any of its Subsidiaries is subject to
any Lien, except:
(a) Liens for current Taxes not delinquent or Taxes
being contested in good faith and by appropriate proceedings
and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained;
(b) carriers', warehousemen's, mechanics',
materialmen's and other like statutory Liens arising in the
ordinary course of business securing obligations which are
not overdue for a period of more than 30 days or which are
being contested in good faith and by appropriate proceedings
and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, and other
obligations of a like nature incurred in the ordinary course
of business;
(e) Liens disclosed in the financial statements
referred to in Section 8.6; and
(f) Liens listed on Schedule 8.9.
8.10 Subsidiaries. The Company has no
Subsidiaries except as listed on Schedule 8.10. The Company and
its Subsidiaries own the percentage of its Subsidiaries as set
forth on Schedule 8.10.
8.11 Partnerships. Neither the Company nor any of
its Subsidiaries is a partner or joint venturer in any
partnership or joint venture other than the partnerships and
joint ventures listed on Schedule 8.11.
8.12 Regulation U. The Company is not engaged in
the business of purchasing or selling "margin stock," as such
term is defined in Regulation U of the Federal Reserve Board, or
extending credit to others for the purpose of purchasing or
carrying margin stock, and no part of the proceeds of any Loan
will be used to purchase or carry any margin stock or for any
other purpose which would violate any of the margin regulations
of the Federal Reserve Board.
8.13 Compliance. Neither the Company nor any of
its Subsidiaries has failed to comply with any statute or
governmental rule or regulation applicable to it where the effect
of such failure would materially and adversely affect the
Company's or any Subsidiary's financial condition or operations.
8.14 Pension and Welfare Plans. Each Plan
complies in all material respects with all applicable statutes
and governmental rules and regulations; no Reportable Event has
occurred and is continuing with respect to any Pension Plan;
neither the Company nor any ERISA Affiliate has withdrawn from
any Multiemployer Plan in a "complete withdrawal" or a "partial
withdrawal" as defined in Section 4203 or 4205 of ERISA,
respectively, or instituted steps to do so; no steps have been
instituted to terminate any Pension Plan; no contribution failure
has occurred with respect to any Pension Plan sufficient to give
rise to a Lien under Section 302(f) of ERISA; no condition exists
or event or transaction has occurred in connection with any
Pension Plan or Multiemployer Plan which could result in the
incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty; and neither the Company nor any ERISA
Affiliate is a "contributing sponsor" as defined in Section
4001(a) (13) of ERISA of a "single-employer" plan as defined in
Section 4001(a) (15) of ERISA which has two or more contributing
sponsors at least two of which are not under common control.
Neither the Company nor any ERISA Affiliate is a member of, or
contributes to, any multiple employer Plan as described in
section 4064 of ERISA. Neither the Company nor any of its
Subsidiaries has any contingent liability with respect to any
post-retirement "welfare benefit plans," as such term is defined
in ERISA, except as listed on Schedule 8.14, other than liability
for continuation coverage described in Part 6 of Title I of
ERISA.
8.15 Taxes. Each of the Company and its
Subsidiaries has filed all tax returns which are required to have
been filed and has paid, or made adequate provisions for the
payment of, all of its Taxes which are due and payable, except
such Taxes, if any, as are being contested in good faith and by
appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by GAAP have been
maintained. The federal income tax liability of the Company and
its Subsidiaries has been audited by the Internal Revenue Service
and has been finally determined and satisfied (or the time for
audit has expired) for all tax years up to and including the tax
year ended June 30, 1990. The Company is not aware of any
proposed assessment against the Company or any of its
Subsidiaries for additional Taxes (or any basis for any such
assessment) which might be material to the Company and its
Subsidiaries taken as a whole, other than any such assessments
being contested in good faith and by appropriate proceedings and
as to which such reserves or other appropriate provisions as may
be required by GAAP are being maintained.
8.16 Investment Company Act Representation. The
Company is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
8.17 Public Utility Holding Company Act
Representation. The Company is not a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of
a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
9. COMPANY'S COVENANTS. From the date of this Agreement
and thereafter until the expiration or termination of the Credit
and until the Notes and other liabilities of the Company
hereunder are paid in full, the Company agrees that, unless
otherwise consented to by the Majority Banks (or the Agent acting
at the direction of the Majority Banks), it will:
9.1 Financial Statements and Other Reports. Furnish
to the Agent in sufficient number of original copies to provide
one to each Bank:
(a) Borrowing Base Certificate. Within 30 days after
the end of each month: (i) a certificate substantially in
the form of Exhibit E ("Borrowing Base Certificate") signed
by the president or chief financial officer of the Company
containing a computation of the Borrowing Base, and showing
compliance with the requirements of Section 6.2 or the
amount of any prepayment required thereunder, and (ii) an
aging of the Company's accounts receivable in form and
content satisfactory to the Agent and the Majority Banks.
(b) Annual Audit Report. Within ninety (90) days
after each Fiscal Year of the Company, a copy of the annual
audit report of the Company and its Subsidiaries prepared on
a consolidated basis and in conformity with GAAP and
certified by an independent certified public accountant who
shall be reasonably satisfactory to the Agent and the
Majority Banks, together with a certificate from such
accountant to the effect that, in making the examination
necessary for the signing of such annual audit report, such
accountant has not become aware of any Event of Default or
Unmatured Event of Default that has occurred and is
continuing, or, if such accountant has become aware of any
such event, describing it;
(c) Quarterly Financial Statement. Within forty-five
(45) days after each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year of the Company, a copy of the
unaudited financial statement of the Company and its
Subsidiaries prepared in the same manner as the audit report
referred to in preceding clause (b), signed by the Company's
chief financial officer and consisting of at least a balance
sheet as of the close of such Fiscal Quarter and statements
of earnings for such Fiscal Quarter and statements of
earnings and cash flows for the period from the beginning of
such Fiscal Year to the close of such Fiscal Quarter;
(d) Officer's Certificate. Together with the
financial statements burnished by the Company under
preceding clauses (b) and (c), a certificate of the
Company's president or chief financial officer in the form
of Exhibit D (a "Compliance Certificate"), dated the date of
such annual audit report or such quarterly financial
statement as the case may be, to the effect that no Event of
Default or Unmatured Event of Default has occurred and is
continuing, or, if there is any such event, describing it
and the steps, if any, being taken to cure it, and
containing a computation of, and showing compliance with,
each of the financial ratios and restrictions contained in
this section 9;
(e) SEC and Other Reports. Copies of each filing and
report made by the Company or any Subsidiary with or to any
securities exchange or the Securities and Exchange
Commission and of each communication from the Company or any
Subsidiary to shareholders generally, promptly upon the
filing or making thereof;
(f) Report of Change in Subsidiaries or Partnerships.
Promptly from time to time, a written report of any change
in the list of the Company' s subsidiaries set forth on
Schedule 8.10 or in the list of partnerships and joint
ventures set forth on Schedule 8.11; and
(g) Requested Information. Promptly from time to
time, such other reports or information as the Agent or any
Bank (any such request of a Bank to be made through the
Agent) may reasonably request.
9.2 Notices. Notify the Agent and each Bank in
writing of any of the following immediately upon learning of the
occurrence thereof, describing the same and, if applicable the
steps being taken by the Person(s) affected with respect thereto:
(a) Default. The occurrence of an Event of Default or
an Unmatured Event of Default;
(b) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding which is
material to the Company and its Subsidiaries taken as a
whole;
(c) Judgment. The entry of any judgment or decree
against the Company or any Subsidiary if the aggregate
amount of all judgments and decrees then outstanding against
the Company and all Subsidiaries exceeds $100,000 after
deducting (i) the amount with respect to which the Company
or any Subsidiary is insured and with respect to which the
insurer has assumed responsibility in writing, and (ii) the
amount for which the Company or any Subsidiary is otherwise
indemnified if the terms of such indemnification and the
Person providing such indemnification are satisfactory to
the Agent;
(d) Pension and Welfare Plans. The occurrence of a
Reportable Event with respect to any Plan; the institution
of any steps by the Company, any ERISA Affiliate, the PBGC
or any other Person to terminate any Plan; the institution
of any steps by the Company or any ERISA Affiliate to
withdraw from any Plan with respect to which it is a
substantial employer within the meaning of Section 4063 of
ERISA; or the incurrence of any material increase in the
contingent liability of the Company or any Subsidiary with
respect to any post-retirement welfare benefits;
(e) Material Adverse Change. The occurrence of a
material adverse change in the business, operations or
financial condition of the Company and its Subsidiaries
taken as a whole; or
(f) Other Events. The occurrence of such other events
as the Agent or any Bank may from time to time reasonably
specify (any such specification by a Bank to be made through
the Agent).
9.3 Existence. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, its respective existence as
a corporation or other form of business organization, as the case
may be, and all rights, privileges, licenses, patents, patent
rights, copyrights, trademarks, trade names, franchises and other
authority to the extent material and necessary for the conduct of
its respective business in the ordinary course as conducted from
time to time.
9.4 Nature of Business. Engage, and cause each
Subsidiary to engage, in the leasing of property under "sales
type," "direct financing" or "operating" leases, the sale of
property on conditional sales contracts, the financing of lease
receivables, installment sale contract receivables and revolving
credit receivables, or in other activities reasonably related to
such leasing, sales or financing activity.
9.5 Books, Records and Access. Maintain, and cause
each Subsidiary to maintain, complete and accurate books and
records in which full and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its
respective business and activities; permit, and cause each
Subsidiary to permit, upon reasonable notice access by the Agent
and the Banks to the books and records of the Company and such
Subsidiary during normal business hours at such time and place as
the Company shall reasonably direct; and permit, and cause each
Subsidiary to permit, the Agent or any Bank to make copies of
such books and records.
9.6 Insurance. Maintain, and cause each Subsidiary to
maintain, insurance to such extent and against such hazards and
liabilities as is commonly maintained by companies similarly
situated or as the Agent or the Majority Banks may reasonably
request (any such request of the Majority Banks to be made
through the Agent) from time to time.
9.7 Insurance Reports. Provide to the Agent at least
annually within 90 days of the end of the Company's Fiscal Year,
and in a sufficient number of copies to provide one to each Bank,
a certificate signed by its chief financial officer that attests
to the property and casualty insurance program carried by the
Company and its Subsidiaries. The Company shall also notify the
Agent and each Bank in writing at least twenty (20) days prior to
any cancellation of, or material change in, any such insurance by
the Company or any Subsidiary or within five (5) business days
after receipt of any notice (whether formal or informal) of
cancellation or change by any of its insurers. Annually the
Agent or any Bank shall have the right to request the Company to
have a risk management survey completed by a recognized
independent risk management consultant acceptable to the Company
and the Agent and the Majority Banks which will identify,
quantify and assess any catastrophic uninsured, underinsured or
self-insured exposures faced by the Company and all Subsidiaries.
The cost of such survey shall be borne solely by the Banks. A
sufficient number of copies of the results of each such survey to
provide one to each Bank shall be promptly delivered by the
Company to the Agent.
9.8 Repair. Maintain, preserve and keep, and cause
each Subsidiary to maintain, preserve and keep, its properties in
good repair, working order and condition; and from time to time
make, and cause each Subsidiary to make, all necessary and proper
repairs, renewals, replacements, additions, betterments and
improvements thereto so that at all times the efficiency thereof
shall be fully preserved and maintained.
9.9 Taxes. Pay, and cause each Subsidiary to pay,
when due, all of its Taxes, unless and only to the extent that
the Company or such Subsidiary, as the case may be, is contesting
such Taxes in good faith and by appropriate proceedings and the
Company or such Subsidiary has set aside on its books such
reserves or other appropriate provisions therefor as may be
required by GAAP.
9.10 Compliance. Comply, and cause each Subsidiary to
comply, with all statutes and governmental rules and regulations
applicable to it.
9.11 Pension Plans. Not permit, and not permit any
Subsidiary to permit, any condition to exist in connection with
any Plan (other than a Multi-employer Plan) which might
constitute grounds for the PBGC to institute proceedings to have
such Plan terminated or a trustee appointed to administer such
Plan; not fail, and not permit any Subsidiary to fail, to make a
required contribution to any Pension Plan if such failure is
sufficient to give rise to a Lien under Section 302(f) of ERISA;
and not engage in, or permit to exist or occur, or permit any of
its Subsidiaries to engage in, or permit to exist or occur, any
other condition, event or transaction with respect to any Plan
which could result in the incurrence by the Company or any of its
Subsidiaries of any material liability, fine or penalty.
9.12 Merger, Purchase and Sale. Not, and not permit
any Subsidiary to:
(a) be a party to any merger or consolidation;
(b) except in the normal course of its business,
sell, transfer, convey, lease or otherwise dispose of all or
any substantial part of the assets of the Company and its
Subsidiaries taken as a whole, or sell or assign, with or
without recourse, any accounts receivable or chattel paper;
or
(c) purchase or otherwise acquire all or
substantially all the assets of any Person.
Notwithstanding the foregoing
(x) any wholly-owned Subsidiary may merge into
the Company or into or with any other wholly-owned
Subsidiary;
(y) any wholly-owned Subsidiary may consolidate
with any other wholly-owned Subsidiary so long as
immediately thereafter 100% of the voting stock or other
ownership interest of the resulting Person is owned by the
Company or another wholly-owned Subsidiary; and
(z) the Company or any wholly-owned Subsidiary
may sell, transfer, convey, lease or assign all or a
substantial part of its assets to the Company or a wholly-owned
Subsidiary;
provided in each of the cases described in preceding clauses
(x), (y) and (z), that immediately thereafter and after giving
effect thereto, no Event of Default or Unmatured of Default shall
have occurred and be continued.
For purposes of this Section 9.12 only, a sale,
transfer, conveyance, lease or other disposition of assets shall
be deemed to be a "substantial part" of the assets of the Company
and its Subsidiaries only if the value of such assets, when added
to the value of all other assets sold, transferred, conveyed,
leased or otherwise disposed of by the Company and its
Subsidiaries (other than in the normal course of business) during
the same Fiscal Year, exceeds 10% of the Company's consolidated
total assets determined as of the end of the immediately
preceding Fiscal Year. As used in the preceding sentence, the
term "value" shall mean, with respect to any asset disposed of,
the greater of such asset's book or fair market value as of the
date of disposition, with "book value" being the value of such
asset as would appear immediately prior to such disposition on a
balance sheet of the owner of such asset prepared in accordance
with GAAP.
9.13 Liabilities to Net Worth Ratio. Not permit
the ratio of the Company's Consolidated Total Liabilities to the
Company's Consolidated Tangible Net Worth to exceed 4.00 to 1.00.
9.14 Tangible Net Worth. Not at any time permit
the sum of (a) the Company's Consolidated Tangible Net Worth at
such time, plus (b) the Company's aggregate Net Assets of
Securitization Subsidiaries at such time, minus (c) the amount of
any Subordinated Debt included in the computation of the
Company's Consolidated Tangible Net Worth at such time; plus (d)
the aggregate amount paid by the Company to redeem its stock
during the period commencing on December 31, 1992 to and
including such time, to be less than the sum of (x) $17,000,000
plus (y) 50% of the Company's consolidated cumulative net income
for the period commencing January 1, 1993 to and including such
time (but not less than zero); provided, however, that, for
purposes of determining compliance with this Section 9.14, (i)
the amount included in clause (d) hereof shall not exceed
$5,000,000 and (ii) amounts paid by the Company to redeem its
stock shall only be included in clause (d) hereof to the extent
such stock is retained by the Company as treasury stock.
9.15 Capital Expenditures. Not, and not permit
any Subsidiary to, purchase or otherwise acquire (including,
without limitation, acquisition by way of Capitalized Lease), or
commit to purchase or otherwise acquire, any fixed asset (which
shall not include any property leased by the Company or any
Subsidiary as lessor under a Lease) if, after giving effect to
such purchase or other acquisition, the aggregate cost of all
fixed assets purchased or otherwise acquired by the Company and
its Subsidiaries on a consolidated basis in any one Fiscal Year
would exceed $800,000.
9.16 Interest Coverage. Not permit the ratio of
(a) the Company's consolidated net earnings before interest
expense and provision for Taxes for any period of four
consecutive Fiscal Quarters ending on the last day of any Fiscal
Quarter of the Company to (b) the Company's consolidated interest
expense for such period to be less than 1.15 to 1.00.
For purposes of this Section 9.16, (i) net earnings shall
not include any material gains on the sale or other disposition
of Investments or fixed assets or any material extraordinary or
nonrecurring items of income to the extent that the aggregate of
all such gains and extraordinary or nonrecurring items of income
exceeds the aggregate of losses on such sale or other disposition
and extraordinary or nonrecurring charges, and (ii) interest
expense shall include, without limitation, implicit interest
expense on Capitalized Leases. As used in this paragraph, a gain
on the sale or disposition of Investments or fixed assets, or an
extraordinary or nonrecurring item of income, shall be "material"
if such gain or item of income, when aggregated with all other
such gains or items of income, exceeds $50,000 in the aggregate
in any Fiscal Year.
9.17 Restricted Payments. Not purchase or redeem
any shares of its stock, declare or pay any dividend thereon
(other than stock dividends), make any distribution to
stockholders or set aside any funds for any such purchase, and
not prepay, purchase or redeem, and not permit any Subsidiary to
purchase, any subordinated indebtedness of the Company or any
Subsidiary (other than to the extent of the net proceeds to the
Company or any Subsidiary from the issue after December 31, 1992
of other subordinated debt) (collectively, "Restricted
Payments"), if after giving effect thereto the aggregate amount
of Restricted Payments made during the period from and after
December 31, 1992 to and including the date of the making of the
Restricted Payment in question, would exceed the sum of (a)
$2,000,000, (b) 50% of the Company's consolidated net income for
such period (or if net income is a deficit figure, then minus
100% of such deficit) and (c) the net proceeds to the Company
from the issue or sale after December 31, 1992 of shares of
capital stock of the Company or warrants, rights or options to
purchase or acquire any shares of the capital stock of the
Company.
9.18 Company and Subsidiaries' Stock. Not permit
any Subsidiary to purchase or otherwise acquire any shares of the
stock of the Company; and not take any action, or permit any
Subsidiary to take any action, which will result in a decrease in
the Company's or any Subsidiary's ownership interest in any
Subsidiary.
9.19 Indebtedness. Not, and not permit any
Subsidiary to, incur or permit to exist any Indebtedness, except:
(a) Indebtedness under the terms of this
Agreement;
(b) other Indebtedness approved in writing by the
Majority Banks (or the Agent acting on the direction of the
Majority Banks);
(c) Indebtedness hereafter incurred in connection
with the Liens permitted by Section 9.20(a);
(d) Non-Recourse Debt; and
(e) other Indebtedness outstanding on the date
hereof and listed on Schedule 9.19.
9.20 Liens. Not, and not permit any Subsidiary
to, create or permit to exist any Lien with respect to any
property, revenues or assets now owned or hereafter acquired,
except:
(a) Liens in connection with the acquisition of
property after the date hereof by way of purchase money
mortgage, conditional sale or other title retention
agreement, Capitalized Lease or other deferred payment
contract, and attaching only to the property being acquired,
if the Indebtedness secured thereby does not exceed 80%
(100% in the case of a Capitalized Lease) of the fair market
value of such property at the time of acquisition thereof
nor $500,000 in the aggregate for the Company and all
Subsidiaries at any one time outstanding.
(b) Liens for current Taxes not delinquent or
Taxes being contested in good faith and by appropriate
proceedings and as to which such reserves or other
appropriate provisions as may be required by GAAP are being
maintained;
(c) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, and other like statutory Liens
arising in the ordinary course of business securing obligations
which are not overdue for a period of more than 30 days or which
are being contested in good faith and by appropriate proceedings
and as to which such reserves or other appropriate provisions as
may be required by GAAP are being maintained;
(d) pledges or deposits in connection with
workers' compensation, unemployment insurance and other
social security legislation;
(e) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations and other
obligations of a like nature incurred in the ordinary course
of business;
(f) the Lien provided for in Section 6.6 and
other Liens in favor of the Agent for the benefit of the
Banks;
(g) Liens referred to in Section 8.9;
(h) Liens on Leases and related personal property
covered by thereby securing Non-Recourse Debt, if such
Indebtedness does not exceed, for the Leases securing such
Indebtedness, 100% of the present value (using the interest
rate applicable to such Indebtedness) of the Lease
Receivables with respect to such Leases; and
(i) Restricted Cash, provided, however, that the
Company shall satisfy all Restricted Cash requirements from
the proceeds of the funds borrowed or otherwise received
from the financing of Leases and other chattel paper.
9.21 Guaranties. Not, and not permit any
Subsidiary to, become or be a guarantor or surety of, or
otherwise become or be responsible in any manner (whether by
agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or
services, or otherwise) with respect to, any undertaking of any
other Person, except for: (a) the endorsement, in the ordinary
course of collection, of instruments payable to it or its order,
(b) with the prior written approval of the Majority Banks,
guaranties by the Company or a Subsidiary of obligations of the
Company or another Subsidiary, and (c) guaranties, limited
recourse agreements or similar obligations of the Company or a
Subsidiary, in connection with any Non-Recourse Debt, provided
the aggregate amount of such obligation does not exceed 10% of
the amount of the Non-Recourse Debt.
9.22 Investments. Not, and not permit any
Subsidiary to, make or permit to exist any Investment in any
Person, except for:
(a) advances not to exceed, in the aggregate for
the Company and all Subsidiaries, $25,000 at any one time
outstanding to officers and employees;
(b) Permitted Investments;
(c) Investments evidenced by Vendor Notes;
(d) Investments in wholly-owned Subsidiaries;
(e) Investments (other than Investments in the
nature of loans or advances) outstanding on the date hereof
in Subsidiaries by the Company and other Subsidiaries; and
(f) other Investments outstanding on the date
hereof and listed on Schedule 9.22.
9.23 Leases. Not enter into or permit to exist,
or permit any of its Subsidiaries to enter into or permit to
exist, any arrangements for the leasing by the Company or any of
its Subsidiaries, as lessee, of any real or personal property (or
any interest therein) under leases (other than Capitalized
Leases) which require the payment by the Company and its
Subsidiaries on a consolidated basis of rental amounts in the
aggregate in excess of (i)$500,000 in any one Fiscal Year or (ii)
$2,000,000 during the full remaining terms of such leases.
9.24 Lease Portfolio. Not permit the Average
Original Equipment Cost Per Lease to exceed $25,000 multiplied by
the OEC Inflation Index.
"Average Original Equipment Cost Per Lease" shall mean, as
of any date of determination, the aggregate Original Equipment
Cost of all items of property owned by the Company or a
Subsidiary and leased to other Persons under Leases, divided by
the total number of "sales type," "direct financing" or
"operating" leases by the Company to other Persons reflected on
the Company's books and records.
"Original Equipment Cost" shall mean, with respect to an
item of personal property owned by the Company or a Subsidiary
for lease to another Person, the acquisition cost thereof
capitalizable in accordance with GAAP and used to determine the
amount recorded on the Company's balance sheet with respect
thereto.
"OEC Inflation Index" shall mean, as of the date of any
determination thereof, a fraction, the numerator of which is the
monthly Consumer Price Index for All Urban Consumers, All Items,
U.S. City Average (1982-84 = 100) (unadjusted) published by the
U.S. Bureau of Labor Statistics (the "CPI-U"), for the most
recent month for which the CPI-U shall have been published, and
the denominator of which is 135 (being the CPI-U for March,
1991); provided, that if the CPI-U is no longer published, there
shall be substituted in both the numerator and the denominator
the most nearly comparable index published by Federal authorities
that reflects inflationary or deflationary changes, which
substituted index shall be determined by the Agent by notice to
the Company and be conclusive in the absence of bad faith or
manifest error. In the event that the Company determines that
the OEC Inflation Index does not accurately reflect the changes
to the cost of items of equipment to be adjusted by such OEC
Inflation Index, then another index which in the judgment of the
Company more accurately reflects such changes, and which is
acceptable to the Majority Banks, shall be substituted for the
OEC Inflation Index.
9.25 Unconditional Purchase Obligation. Not, and
not permit any Subsidiary to, enter into or be a party to any
contract for the purchase or lease of materials, supplies or
other property or services if such contract requires that payment
be made by it regardless of whether or not delivery is ever made
of such materials, supplies or other property or services.
9.26 Other Agreements. Not, and not permit any
Subsidiary to, enter into any agreement containing any provision
which would be violated or breached by the Company's performance
of its obligations hereunder or under any instrument or document
delivered or to be delivered by the Company hereunder or in
connection herewith.
9.27 Use of Proceeds. Not permit any proceeds of
the Loans to be used for any purpose other than to repay all
amounts owing under the Prior Credit Agreement and to finance
Leases, Vendor Notes, Customer Notes and working capital and not
permit any proceeds of the Loans to be used either directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying any margin stock" within the
meaning of Regulation U of the Federal Reserve Board, as amended
from time to time; and furnish to the Agent, upon its request, a
statement in conformity with the requirements of Federal Reserve
Form U-l referred to in Regulation U.
9.28 Transactions with Related Parties. Not, and
not permit any Subsidiary to, enter into or be a party to any
transaction or arrangement, including, without limitation, the
purchase, sale, lease or exchange of property or the rendering of
any service, with any Related Party, except in the ordinary
course of and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not a Related Party.
9.29 Subsidiaries: Partnerships. Not create or
permit to exist, or become a partner or joint venturer in, and
not permit any Subsidiary to create or permit to exist or become
a partner or joint venturer in, any Subsidiary, partnership or
joint venture, as applicable, other than Securitization
Subsidiaries, Subsidiaries used in the business of providing
revolving credit and any set forth on Schedule 8.10 or Schedule
8.11, as applicable.
10. CONDITIONS PRECEDENT TO ALL REVOLVING LOANS AND THE
TERM LOANS. The obligation of any Bank to make any Revolving
Loan or to make its Term Loan, is subject to the satisfaction of
each of the following conditions precedent:
10.1 Notice. In the case of a Revolving Loan, the
Agent and such Bank shall have received timely notice of such
Revolving Loan in accordance with Section 3.2.
10.2 Default. Before and after giving effect to
such Loan, no Event of Default or Unmatured Event of Default
shall have occurred and be continuing.
10.3 Insurance. There shall have been no material
change, or notice of prospective material change (whether such
notice is formal or informal):
(a) in the nature, extent, scope or cost of the
insurance policies of the Company or any Subsidiary listed
on Schedule 8.7; or
(b) to the Company's knowledge, which reduces the
policyholder's or financial size ratings of the Company's or
any Subsidiary's insurance carriers as established by Best's
Insurance Reports,
which change would have a material adverse effect on the
financial condition of the Company and its Subsidiaries taken as
a whole or would significantly adversely affect the Company's
ability to perform its obligations under this Agreement or any
Note.
10.4 Warranties. Before and after giving effect
to such Loan, the warranties in Section 8 shall be true and
correct as though made on the date of such Loan, except for such
changes as are specifically permitted hereunder.
10.5 Certification. Each request for a Borrowing
of Revolving Loans and the request for the Borrowing of the Term
Loans shall be deemed to be a certification to the Agent and each
Bank that the conditions precedent set out in Sections 10.2, 10.3
and 10.4 have been satisfied.
10.6 Term Notes. In the case of the Term Loans,
the Company shall have delivered to the Agent, for the account of
the Banks, a duly executed Term Note, payable to the order of
each Bank in the amount of its respective Term Loan.
11. CONDITION PRECEDENT TO INITIAL REVOLVING LOANS.
The obligation of each Bank to make its initial Revolving Loan
hereunder is subject to the satisfaction of the condition
precedent, in addition to the applicable conditions precedent set
forth in Section 10 above, that the Company shall have delivered
to the Agent all of the following, each duly executed and dated
the date of the initial Revolving Loan (or such other date as is
satisfactory to the Agent and all of the Banks), in form and
substance satisfactory to the Agent and all of the Banks, and in
sufficient number of counterpart originals to provide one to each
Bank:
11.1 Revolving Note. Its Revolving Note.
11.2 Resolutions. A copy, duly certified by the
secretary or an assistant secretary of the Company, of (i) the
resolutions of the Company's Board of Directors authorizing or
ratifying the execution and delivery of this Agreement and the
Notes and authorizing the borrowings hereunder, (ii) all
documents evidencing other necessary corporate action, and (iii)
all approvals or consents, if any, with respect to this Agreement
and the Notes.
11.3 Incumbency Certificate. A certificate of the
secretary or an assistant secretary of the Company certifying the
names of the Company's officers authorized to sign this
Agreement, the Notes and all other documents or certificates to
be delivered hereunder, together with the true signatures of such
officers.
11.4 By-Laws. A copy, certified as true and correct by
the secretary or an assistant secretary of the Company, of the
Company's By-Laws.
11.5 Certificate of Incorporation. A copy, certified
by the Secretary of State of Delaware, of the Company's
Certificate of Incorporation, together with all amendments
thereto.
11.6 Good Standing. A current Good Standing
Certificate issued by the Secretary of State (or similar officer)
of Delaware, Illinois, Florida, and California.
11.7 Opinion. An opinion of Xxxxxxxx & Xxxxx, counsel
to the Company, addressed to the Agent and the Banks in
substantially the form of Exhibit F.
11.8 Exhibits; Schedules. Completed Exhibits and
Schedules, and the information disclosed therein shall be
acceptable to all of the Banks.
11.9 Borrowing Base Certificate. A duly executed
Borrowing Base Certificate.
11.10 Evidence satisfactory to the Agent that the
Prior Credit Agreement has been terminated and all amounts owing
thereunder have been paid in full.
12. EVENTS OF DEFAULT AND REMEDIES.
12.1 Events of Default. Each of the following shall
constitute an Event of Default under this Agreement:
(a) Non-Payment. Default, and the continuance thereof
for five (5) days, in the payment, when due, of any
principal of, or interest on, any Loan or any fee hereunder.
(b) Non-Payment of Other Indebtedness. Default in the
payment when due, whether by acceleration or otherwise
(subject to any applicable grace period), of any
Indebtedness in an aggregate principal amount of $100,000 or
more of, or guaranteed by, the Company or any Subsidiary
(other than (i) any Indebtedness of any Subsidiary to the
Company or to any other Subsidiary, (ii) Non-Recourse Debt
and (iii) the Indebtedness evidenced by the Notes).
(c) Acceleration of Other Indebtedness. Any event or
condition shall occur which results in the acceleration of
the maturity of any Indebtedness in an aggregate principal
amount of $100,000 or more of, or guaranteed by, the Company
or any Subsidiary (other than (i) any Indebtedness of any
Subsidiary to the Company or to any other Subsidiary, (ii)
Non-Recourse Debt and (iii) the Indebtedness evidenced by
the Notes) or enables the holder or holders of such other
Indebtedness or any trustee or agent for such holders (any
required notice of default having been given and any
applicable grace period having expired) to accelerate the
maturity of such other Indebtedness.
(d) Other Material Obligations. Default in the
payment when due, whether by acceleration or otherwise, or
in the performance or observance (subject to any applicable
grace period) of: (i) any obligation or agreement of the
Company or any Subsidiary to or with the Agent or any Bank
(other than any obligation or agreement of the Company
hereunder or under any Note), or (ii) any material
obligation or agreement of the Company or any Subsidiary
other than a Securitization Subsidiary to or with any other
Person with respect to any material purchase or lease of
goods or services (other than (x) any such material
obligation or agreement constituting or related to
Indebtedness, (y) Trade Accounts Payable, and (z) any
material obligation or agreement of any Subsidiary to the
Company or to any other Subsidiary), except only to the
extent that the existence of any such default is being
contested by the Company or such Subsidiary, as the case may
be, in good faith and by appropriate proceedings and the
Company or such Subsidiary shall have set aside on its books
such reserves or other appropriate provisions therefor as
may be required by GAAP.
(e) Insolvency. The Company or any of its
Subsidiaries other than a Securitization Subsidiary becomes
insolvent, or generally fails to pay, or admits in writing
its inability to pay, its debts as they mature, or applies
for, consents to, or acquiesces in, the appointment of a
trustee, receiver or other custodian for the Company or such
Subsidiary or for a substantial part of the property of the
Company or such Subsidiary, or makes a general assignment
for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any of its
Subsidiaries other than a Securitization Subsidiary or for a
substantial part of the property of the Company or any of
its Subsidiaries other than a Securitization Subsidiary and
is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement or other proceeding under
any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding, is instituted by or against the
Company or any of its Subsidiaries other than a
Securitization Subsidiary and, if instituted against the
Company or any of its Subsidiaries other than a
Securitization Subsidiary, is consented to or acquiesced in
by the Company or such Subsidiary or remains for 60 days
undismissed; or any warrant of attachment or similar legal
process is issued against any substantial part of the
property of the Company or any of its Subsidiaries other
than a Securitization Subsidiary which is not released
within 60 days of service.
(f) Pension Plans. The institution by the Company or
any ERISA Affiliate of steps to terminate any Plan if, in
order to effectuate such termination, (i) the Company or any
ERISA Affiliate would be required to make a contribution to
such Plan or would incur a liability or obligation to such
Plan and (ii) immediately after giving effect to the payment
or satisfaction of such contribution, liability or
obligation (if made or undertaken by the Company or any
Subsidiary) an Event of Default or Unmatured Event of
Default would exist and be continuing; or the institution by
the PBGC of steps to terminate any Plan.
(g) Agreements. Default in the performance of any of
the Company's agreements herein set forth (and not
constituting an Event of Default under any of the other
subsections of this Section 12.1) and continuance of such
default for 30 days after notice thereof to the Company from
the Agent.
(h) Warranty. Any warranty made by the Company herein
is untrue or misleading in any material respect when made or
deemed made; or any schedule, statement, report, notice,
certificate or other writing furnished by the Company to the
Agent or any Bank is untrue or misleading in any material
respect on the date as of which the facts set forth therein
are stated or certified; or any certification made or deemed
made by the Company to the Agent or any Bank is untrue or
misleading in any material respect on or as of the date made
or deemed made.
(i) Litigation. There shall be entered against the
Company or any Subsidiary other than a Securitization
Subsidiary one or more judgments or decrees in excess of
$100,000 in the aggregate at any one time outstanding for
the Company and all Subsidiaries other than a Securitization
Subsidiary, excluding those judgments or decrees (i) that
shall have been outstanding less than 60 calendar days from
the entry thereof or (ii) for and to the extent which the
Company or any Subsidiary is fully insured (other than a
deductible portion not to exceed $100,000) and with respect
to which the insurer has assumed responsibility in writing
or for and to the extent which the Company or any Subsidiary
is otherwise indemnified if the terms of such
indemnification and the Person providing such
indemnification are satisfactory to the Agent and the
Majority Banks.
(j) Change of Ownership. Xxxxxxx Xxxxxxxx shall cease
to own at least 35% of the issued and outstanding stock of
the Company which, under ordinary circumstances, has the
power to elect a majority of the Company's Board of
Directors.
12.2 Remedies. If any Event of Default described in
Section 12.1 shall have occurred and be continuing, the Agent,
upon the request of the Majority Banks, may declare the
Commitments and the Credit to be terminated and all or a portion
of the Loans to be due and payable, whereupon the Commitments and
Credit shall immediately terminate and the outstanding Loans
shall become immediately due and payable to the extent so
declared, all without notice of any kind (except that if an event
described in Section 12.1(e) occurs, the Commitments and the
Credit shall immediately terminate and all outstanding Loans
shall become immediately due and payable without declaration or
notice of any kind). The Agent shall promptly advise the Company
of any such declaration, but failure to do so shall not impair
the effect of such declaration.
13. THE AGENT.
13.1. Appointment. The First National Bank of
Chicago is hereby appointed Agent hereunder and under each other
Loan Document, and each of the Banks irrevocably authorizes the
Agent to act as the agent of such Bank. The Agent agrees to act
as such upon the express conditions contained in this Section 13.
The Agent shall not have a fiduciary relationship in respect of
the Company or any Bank by reason of this Agreement.
13.2. Powers. The Agent shall have and may
exercise such powers under the Loan Documents as are specifically
delegated to the Agent by the terms of each thereof, together
with such powers as are reasonably incidental thereto. The Agent
shall have no implied duties to the Banks, or any obligation to
the Banks to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the
Agent.
13.3. General Immunity. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable
to the Company, the Banks or any Bank for any action taken or
omitted to be taken by it or them, as Agent, hereunder or under
any other Loan Document or in connection herewith or therewith
except for its or their own gross negligence or willful
misconduct.
13.4. No Responsibility for Loans, Recitals, etc.
Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any
borrowing hereunder; (ii) the performance or observance of any of
the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an
obligor to furnish information directly to each Bank; (iii) the
satisfaction of any condition specified in Section 10, except
receipt of items required to be delivered to the Agent; (iv) the
validity, effectiveness or genuineness of any Loan Document or
any other instrument or writing furnished in connection
therewith; or (v) the value, sufficiency, creation, perfection or
priority of any interest in any collateral security. The Agent
shall have no duty to disclose to the Banks information that is
not required to be furnished by the Company to the Agent at such
time, but is voluntarily furnished by the Company to the Agent
(either in its capacity as Agent or in its individual capacity).
13.5. Action on Instructions of Banks. The Agent
shall in all cases be fully protected in acting, or in refraining
from acting, hereunder and under any other Loan Document in
accordance with written instructions signed by the Majority
Banks, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Banks and on
all holders of Notes. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its
satisfaction by the Banks pro rata against any and all liability,
cost and expense that it may incur by reason of taking or
continuing to take any such action.
13.6. Employment of Agents and Counsel. The Agent
may execute any of its duties as Agent hereunder and under any
other Loan Document by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Banks,
except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent
shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder
and under any other Loan Document.
13.7. Reliance on Documents; Counsel. The Agent
shall be entitled to rely upon any Note, notice, consent,
certificate, affidavit, letter, telegram, statement, paper or
document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by
the Agent, which counsel may be employees of the Agent.
13.8. Agent's Reimbursement and Indemnification.
The Banks agree to reimburse and indemnify the Agent ratably in
proportion to their respective Commitments (i) for any amounts
not reimbursed by the Company for which the Agent is entitled to
reimbursement by the Company under the Loan Documents, (ii) for
any other expenses incurred by the Agent on behalf of the Banks,
in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and (iii)
for any 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 the Agent in any way relating to or
arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby,
or the enforcement of any of the terms thereof or of any such
other documents, provided that no Bank shall be liable for any of
the foregoing to the extent they arise from the gross negligence
or willful misconduct of the Agent. The obligations of the Banks
under this Section 13.8 shall survive payment of the Liabilities
and termination of this Agreement.
13.9. Rights as a Bank. In the event the Agent is
a Bank, the Agent shall have the same rights and powers hereunder
and under any other Loan Document as any Bank and may exercise
the same as though it were not the Agent, and the term "Bank" or
"Banks" shall, at any time when the Agent is a Bank, unless the
context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Company or any of its
Subsidiaries in which the Company or such Subsidiary is not
restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a
Bank.
13.10. Bank Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank and based on the financial statements prepared by
the Company and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to
enter into this Agreement and the other Loan Documents. Each
Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Loan Documents.
13.11. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and the
Company, such resignation to be effective upon the appointment of
a successor Agent or, if no successor Agent has been appointed,
forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with
or without cause by written notice received by the Agent from the
Required Banks, such removal to be effective on the date
specified by the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint, with
the consent of the Company (not to be unreasonably withheld), on
behalf of the Company and the Banks, a successor Agent. If no
successor Agent shall have been so appointed by the Required
Banks within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may
appoint, with the consent of the Company (which will not be
unreasonably withheld), on behalf of the Company and the Banks, a
successor Agent. If the Agent has resigned or been removed and
no successor Agent has been appointed, the Banks may perform all
the duties of the Agent hereunder and the Company shall make all
payments in respect of the Liabilities to the applicable Bank and
for all other purposes shall deal directly with the Banks. No
successor Agent shall be deemed to be appointed hereunder until
such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and
retained earnings of at least $100,000,000. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigning or
removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be
discharged from its duties and obligations hereunder and under
the Loan Documents. After the effectiveness of the resignation
or removal of an Agent, the provisions of this Section 13 shall
continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was
acting as the Agent hereunder and under the other Loan Documents.
13.12. Agent's Fee. The Company agrees to pay to
the Agent, for its own account, the fees agreed to by the Company
and the Agent pursuant to that certain letter agreement dated
January 31, 1996, or as otherwise agreed from time to time.
14. GENERAL.
14.1 No Waiver by the Agent or Banks. No failure or
delay on the part of the Agent or any Bank in the exercise of any
power or right, and no course of dealing between the Company and
the Agent or any Bank, shall operate as a waiver of such power or
right, nor shall any single or partial exercise of any power or
right preclude other or further exercise thereof or the exercise
of any other power or right. The remedies provided for in this
Agreement and the other Loan Documents are cumulative and not
exclusive of any remedies which may be available to the Agent or
any Bank at law or in equity. No notice to or demand on the
Company not required hereunder shall in any event entitle the
Company to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the right of the
Agent or any Bank to any other or further action in any
circumstances without notice or demand.
14.2 Amendments. No amendment, modification or waiver
of, or consent with respect to, any provision of this Agreement
shall in any event be effective unless the same shall be in
writing and signed and delivered by the Borrower, the Agent and
Banks having an aggregate Percentage of not less than the
aggregate Percentage expressly designated herein with respect
thereto or, in the absence of such designation, by the Majority
Banks, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given. No amendment,
modification, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the following: (i) waive any
of the conditions specified in Section 10 or Section 11, (ii)
increase the amount or extend the term of the Commitment of any
Bank or subject the Banks to any additional obligations, (iii)
reduce the principal of, or interest on any of the Loans under or
evidenced by this Agreement or any Note, or reduce or waive the
amount of any fee payable to or for the account of the Banks
under this Agreement, (iv) postpone or extend any date fixed for
any payment of principal of, or interest on, any of the Loans
under or evidenced by this Agreement or any Note, or any
reimbursement obligation, (v) change the definition of Majority
Banks or otherwise reduce the aggregate Percentage required to
effect an amendment, modification, waiver or consent, (vi) change
the definition of Borrowing Base, or change the definition of any
of the defined terms referred to in the definition of Borrowing
Base or (vii) change any provision of this Section 14.2.
Further, no amendment, modification, waiver or consent shall
extend the maturity or reduce the principal amount of, or rate of
interest on, any Loan without the consent of the holder of such
Loan. No provision of Section 13 shall be amended, modified or
waived, nor shall the amount of the Agent's fee referred to in
Section 13.12 be amended, without the consent of the Agent.
14.3 Notices. Except as otherwise expressly provided
herein, any notice hereunder to the Company, the Agent or any
Bank shall be in writing (including telegraphic, telex, or
facsimile communication) and shall be given to the Company, the
Agent or such Bank at its address, telex number or facsimile
number set forth on the signature pages hereof or at such other
address, telex number or facsimile number as such party may, by
written notice, designate as its address, telex number or
facsimile number for purposes of notices hereunder. All such
notices shall be deemed to be given when transmitted by telex and
the appropriate answerback is received, transmitted by facsimile,
delivered to the telegraph office, delivered by courier,
personally delivered or, in the case of notice by mail, three (3)
Banking Days following deposit in the United States mail,
properly addressed as herein provided, with proper postage
prepaid; provided, however, that notices to the Agent with
respect to the Conversion Date, or under Sections 3.2, 3.3, 6.2,
6.3, 6.4,, or 6.5 shall not be effective until actually received
by the Agent.
14.4 Expenses; Attorney's Fees. The Company agrees,
whether or not any Loan is made hereunder, to pay upon demand all
reasonable out-of-pocket expenses (including the reasonable fees,
disbursements and other charges of attorneys) incurred by the
Agent or any Bank, and the reasonable charges for and expenses of
attorneys who may be employees of the Agent or a Bank, in
connection with (a) in the case of the Agent, (i) the
preparation, negotiation and execution of this Agreement and any
other Loan Documents, (ii) the preparation of any and all
amendments to this Agreement or any other Loan Document, and
(iii) the performance of periodic collateral field examinations
and/or audits; and (b) in the case of the Agent and each Bank,
(i) the collection or enforcement of the Company's obligations
hereunder or under any other Loan Document and (ii) the
collection or enforcement of any rights of the Agent or any Bank
in or to any property at any time securing payment or performance
of the Company's Liabilities. The Company also agrees (x) to
indemnify and hold the Agent and each Bank harmless from any loss
or expense which may arise or be created by the Agent's
acceptance of telephonic or other instructions for making Loans
and (y) to pay, and save the Agent and each Bank harmless from
all liability for, any stamp or other taxes which may be payable
with respect to the execution or delivery of this Agreement, any
Note or any other Loan Document, or the issuance of any Note or
of any other Loan Documents. The Company further agrees to
indemnify the Agent and each Bank, its directors, officers and
employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor
whether or not the Agent or any Bank is a party thereto) which
any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder
(except to the extent that they have resulted from the gross
negligence or wilful misconduct of, or breach of this Agreement
by, the party seeking indemnification.) The Company's foregoing
obligations shall survive any termination of this Agreement
14.5 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
14.6 Successors. This Agreement shall be binding upon
the Company, the Agent and the Banks and their respective
successors and permitted assigns, and shall inure to the benefit
of the Company, the Agent and the Banks and the successors and
permitted assigns of the Agent and the Banks. The Company shall
not assign its rights or duties hereunder without the consent of
the Agent and all the Banks.
14.7 Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties on
separate counterparts, and each such counterpart shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same Agreement. When counterparts
executed by all of the parties shall have been lodged with the
Agent (or, in the case of any Bank as to which an executed
counterpart shall not have been so lodged, the Agent shall have
received telegraphic, telex or other written confirmation from
such Bank of the execution of a counterpart hereof by such
Lender), this Agreement shall become effective as of the date
hereof, and at such time the Agent shall notify the Company and
each Bank.
14.8 Governing Law. This Agreement, the Notes and the
other Loan Documents shall be contracts made under and governed
by the internal laws of the State of Illinois.
14.9 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE
AGENT AND EACH BANK WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (ii) ARISING FROM
ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
14.10 Each Bank agrees and shall cause each Person
to whom it discloses any confidential information to agree to
hold any confidential information which it may receive in
confidence from the Company pursuant to this Agreement, except
for disclosure (i) to its affiliates and the other Banks and
their respective affiliates, (ii) to legal counsel, accountants,
and other professional advisors to that Bank, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as
required by law, regulation, or legal process, and (v) permitted
by Section 15.4.
15. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
15.1. Successors and Assigns. The terms and
provisions of the Loan Documents shall be binding upon and inure
to the benefit of the Company and the Banks and their respective
successors and assigns, except that (i) the Company shall not
have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Bank must be made in
compliance with Section 15.3. Notwithstanding clause (ii) of
this Section, any Bank may at anytime, without the consent of the
Company or the Agent, assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank;
provided, however, that no such assignment shall release the
transferor Bank from its obligations hereunder. The Agent may
treat the payee of any Note as the owner thereof for all purposes
hereof unless and until such payee complies with Section 15.3 in
the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the
Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who
at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and
binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
15.2. Participations.
15.2(a) Permitted Participants; Effect. Any Bank may,
in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks
or other entities ("Participants") participating interests
in any Loan owing to such Bank, any Note held by such Bank,
any Commitment of such Bank or any other interest of such
Bank under the Loan Documents. In the event of any such
sale by a Bank of participating interests to a Participant,
such Bank's obligations under the Loan Documents shall
remain unchanged, such Bank shall remain solely responsible
to the other parties hereto for the performance of such
obligations, such Bank shall remain the holder of any such
Note for all purposes under the Loan Documents, all amounts
payable by the Company under this Agreement shall be
determined as if such Bank had not sold such participating
interests, and the Company and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under the Loan Documents.
15.2(b) Voting Rights. Each Bank shall retain the
sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which
forgives principal, interest or fees or reduces the interest
rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or
fees on, any such Loan or Commitment, releases any guarantor
of any such Loan or releases any substantial portion of
collateral, if any, securing any such Loan.
15.3. Assignments.
15.3(a) Permitted Assignments. Any Bank may, in the
ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or
other entities ("Purchasers") all or any part of its rights
and obligations under the Loan Documents. Such assignment
shall be substantially in the form of Exhibit "G" hereto or
in such other form as may be agreed to by the parties
thereto. The consent of the Company and the Agent shall be
required prior to an assignment becoming effective with
respect to a Purchaser which is not a Bank or an affiliate
thereof; provided, however, that if a Default has occurred
and is continuing and the Commitments have been terminated,
the consent of the Company shall not be required. Such
consent shall not be unreasonably withheld or delayed. Each
such assignment shall be in an amount not less than the
lesser of (i) $7,500,000 or (ii) the remaining amount of the
assigning Bank's Commitment (calculated as at the date of
such assignment). In addition, First Chicago shall at all
times maintain for its own account a Commitment at least
equal to the lesser of (i) $10,000,000 or (ii) the remaining
amount of its Commitment.
15.3(b) Effect; Effective Date. Upon (i) delivery to
the Agent of a notice of assignment, substantially in the
form attached as Exhibit "I" to Exhibit "G" hereto (a
"Notice of Assignment"), together with any consents required
by Section 15.3.1, and (ii) payment of a $3,000 fee to the
Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such
Notice of Assignment. The Notice of Assignment shall
contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the
Commitment and Loans under the applicable assignment
agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the
Loan Documents will not be "plan assets" under ERISA. On
and after the effective date of such assignment, such
Purchaser shall for all purposes be a Bank party to this
Agreement and any other Loan Document executed by the Banks
and shall have all the rights and obligations of a Bank
under the Loan Documents, to the same extent as if it were
an original party hereto, and no further consent or action
by the Company, the Banks or the Agent shall be required to
release the transferor Bank with respect to the percentage
of the Aggregate Commitment and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 15.3.2, the transferor
Bank, the Agent and the Company shall make appropriate
arrangements so that replacement Notes are issued to such
transferor Bank and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each
case in principal amounts reflecting their Commitment, as
adjusted pursuant to such assignment.
15.4. Dissemination of Information. The Company
authorizes each Bank to disclose to any Participant or Purchaser
or any other Person acquiring an interest in the Loan Documents
by operation of law (each a "Transferee") and any prospective
Transferee any and all information in such Bank's possession
concerning the creditworthiness of the Company and its
Subsidiaries; provided that each Transferee and prospective
Transferee agrees to be bound by Section 14.10 of this Agreement.
15.5. Tax Treatment. If any interest in any Loan
Document is transferred to any Transferee which is organized
under the laws of any jurisdiction other than the United States
or any State thereof, the transferor Bank shall cause such
Transferee, concurrently with the effectiveness of such transfer,
to comply with the provisions of Section 7.6.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized as of the date first written above.
TRANS LEASING INTERNATIONAL, INC.
By:
Title:
Address: 0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Facsimile number:708/291-7318
Amount
of
Commitment
$15,000,000 THE FIRST NATIONAL BANK OF CHICAGO
individually and as Agent
By:
Title:
Address: Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxx
Telex number:
(Answerback: )
Facsimile number: (000) 000-0000
Amount
of
Commitment
$7,500,000 CORESTATES BANK N.A.
By:
Title:
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxx
Telex number:
(Answerback: )
Facsimile number: (000) 000-0000
Amount
of
Commitment
$7,500,000 THE BANK OF CALIFORNIA, N.A.
By:
Title:
Address: 000 Xxxxxxxxxx Xxxxxx,
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telex number:
(Answerback: )
Facsimile number: (000) 000-0000
EXHIBIT A
REVOLVING NOTE
$_____________ Northbrook, Illinois: _________, 1996
Due: On the Conversion Date
ON OR BEFORE the Conversion Date (as defined in the Credit
Agreement hereinafter referred to), the undersigned, TRANS
LEASING INTERNATIONAL, INC. (the "Company") for value received,
hereby promises to pay to the order of
___________________________________ (the "Bank"), the principal
sum of ________________________________ DOLLARS ($_____________)
or, if less, the aggregate unpaid principal amount of all
Floating Rate Revolving Loans and Eurodollar Revolving Loans (as
such terms are defined in the Credit Agreement hereinafter
referred to), as may be borrowed by the Company under the Credit
Agreement. Capitalized terms used but not otherwise defined
herein are as defined in the Credit Agreement.
The Company further promises to pay interest on the unpaid
principal amount of the Revolving Loans from time to time
outstanding from the date hereof until payment in full at the
rates per annum which shall be determined in accordance with the
provisions of the Credit Agreement hereinafter referred to. Said
interest shall be payable on each date provided for in the Credit
Agreement; provided, however, that interest on any principal
portion which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time
representing Floating Rate Revolving Loans or Eurodollar
Revolving Loans, and payments of principal or interest thereof,
shall be recorded by the holder in its records or, at its option,
shall be noted on the grid schedule attached hereto.
All payments of principal and interest under this Note shall
be made in immediately available funds at the office of the Agent
at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such
other place as the Agent shall notify the Company in writing.
This Note is one of the Notes referred to in, evidences
indebtedness incurred under, and is subject to the terms and
provisions of that certain Credit Agreement (the "Credit
Agreement") dated as of _________, 1996 (and, if amended, all
amendments thereto) between the Company and The First National
Bank of Chicago ("First Chicago"), individually and as Agent, to
which Credit Agreement reference is hereby made for a statement
of said terms and provisions, including those under which this
Note may be paid prior to its due date or its due date
accelerated.
In addition to and not in limitation of the foregoing and
the provisions of the Credit Agreement, the Company further
agrees, subject only to any limitation imposed by applicable law,
to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder of this Note in
endeavoring to collect any amounts payable hereunder which are
not paid when due, whether by acceleration or otherwise.
This Note is made under and governed by the internal laws of
the State of Illinois.
TRANS LEASING INTERNATIONAL, INC.
By______________________________
Title___________________________
Address:
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Schedule attached to Note dated __________, 19__ of TRANS LEASING
INTERNATIONAL INC., payable to the order of ____________________.
LOANS AND PAYMENTS OF PRINCIPAL
-------------------------------
Amount of Princi- Unpaid Princi-
Amount of Loan pal Paid/Prepaid pal Balance
---------------- ---------------- --------------
Float- Euro- Float- Euro- Float- Euro- Notation
Date ing Rate dollar ing Rate dollar ing Rate dollar Total Made By
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
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---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
---- -------- ------ -------- ------ -------- ------ ----- --------
The aggregate unpaid principal amount shown on this schedule
shall be rebuttable presumptive evidence of the principal amount
owing and unpaid on this Note. The failure to record the date
and amount of any loan on this schedule shall not, however, limit
or otherwise affect the Company's obligations under the Credit
Agreement or under this Note to repay the principal amount of the
loans together with all interest accruing thereon.
EXHIBIT B
TERM NOTE
$___________________ Due:___________19,__
Northbrook, Illinois, __________, 19__
The undersigned, TRANS LEASING INTERNATIONAL, INC. (the
"Company") for value received, promises to pay to the order of
______________________ (the "Bank"), the principal sum of
__________________________ DOLLARS in eight (8) consecutive equal
installments payable on the last day of each March, June,
September and December, commencing with the first such date to
occur after the date of this Note. Capitalized terms not defined
in this Note shall have the meanings provided in the Credit
Agreement hereinafter referred to.
The Company promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof
until payment in full at the rates per annum which shall be
determined in accordance with the provisions of the Credit
Agreement hereinafter referred to. Said interest shall be payable
on each date provided for in the Credit Agreement; provided,
however, that interest on any principal portion which is not paid
when due shall be payable on demand.
The portions of the principal sum hereof from time to time
denominated as Floating Rate Loans or Eurodollar Loans, and
payments of principal or interest thereof, shall be noted by the
holder of this Note in its records, or at its option, on the grid
schedule attached hereto.
All payments of principal and interest under this Note shall
be made in immediately available funds at the office of the Agent
at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such
other address as the Agent shall notify the Company in writing.
This Note is one of the Notes referred to in, evidences
indebtedness incurred under, and is subject to the terms and
provisions of that certain Credit Agreement (the "Credit
Agreement"), dated as of _________, 1996 (and, if amended, all
amendments thereto) between the Company and The First National
Bank of Chicago ("First Chicago"), individually and as Agent, to
which Credit Agreement reference is hereby made for a statement
of said terms and provisions, including those under which this
Note may be paid prior to its due date or its due date
accelerated.
In addition to and not in limitation of the foregoing and
the provisions of the Credit Agreement, the Company further
agrees, subject only to any limitation imposed by applicable law,
to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder of this Note in
endeavoring to collect any amounts payable hereunder which are
not paid when due, whether by acceleration or otherwise.
This Note is made under and governed by the internal laws of
the State of Illinois.
TRANS LEASING INTERNATIONAL, INC.
By______________________________
ADDRESS: Title:__________________________
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Schedule attached to Note dated ____________________, 19__ of
TRANS LEASING INTERNATIONAL, INC., payable to the order of
_______________________________.
LOANS
-----
Amount of Loan
----------------------------
Notation
Date Floating Rate Eurodollar Total Made By
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
---- -------------- ----------- ------- ----------
EXHIBIT C
[Company's Letterhead]
_______________, 19__
The First National Bank
of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: _____________
Ladies/Gentlemen:
Reference is made to the Credit Agreement dated as of
____________,
1996 (as the same may be amended, supplemented or otherwise modified, the
"Agreement") between us and The First National Bank of Chicago ("First
Chicago"), individually and as Agent. All terms used herein which are
defined in the Agreement shall have the same meaning herein as therein.
Pursuant to the terms of the Agreement, we hereby confirm the
following:
1. A Borrowing of [Floating Rate Revolving] [Eurodollar
Revolving][Floating Rate Term] [Eurodollar Term] Loans in the aggregate
amount of $_____________ was requested on __________, 19__.
2. a prepayment of principal of the [Revolving] [Term] Loans in
the aggregate amount of $____________ was requested on __________, 19__.
[Complete number 1 or 2 above, whichever is applicable.]
3. As of the date hereof, the aggregate unpaid principal
balance of the [Revolving] [Term] Loans (after giving effect to the above
borrowing or prepayment) is $__________.
Very truly yours,
TRANS LEASING INTERNATIONAL,INC.
By:_____________________________
Title:__________________________
EXHIBIT D
COMPLIANCE CERTIFICATE
The First National Bank
of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: _____________
Re: Credit Agreement, dated as of ___________, 1996 (herein,
together with any amendments from time to time made thereto,
called the "Credit Agreement"), between Trans Leasing
International, Inc. (the "Company") and The First National
Bank of Chicago ("First Chicago"), individually and as
Agent.
As used herein, the term "Computation Period" shall
mean the immediately preceding fiscal year (or
quarter, if indicated), and the term "Computation
Date" shall mean the last day of such period.
Capitalized terms not otherwise defined herein shall
be as defined in the Credit Agreement.
Ladies/Gentlemen:
ITEM A. Liabilities to Net Worth Ratio. On the Computation
Date, the Consolidated Tangible Net Worth was $___________, and the ratio of its
Consolidated Total Liabilities to Consolidated Tangible Net Worth was
approximately (and in any event not more than) __ to 1.00, in each case as
computed on Attachment 1.
ITEM B. Tangible Net Worth. On the Computation Date, the
Consolidated Tangible Net Worth for purposes of Section 9.14 of the Credit
Agreement was $_____________ as computed on Attachment 2.
ITEM C. Capital Expenditures. During the Computation Period,
the aggregate amount of fixed assets purchased or otherwise acquired by the
Company was approximately (and in any event not greater than)
$________________.
ITEM D. Interest Coverage. The Company's consolidated net
income for the four consecutive Fiscal Quarters ending on the Computation Date
was $______________, the Company's consolidated interest expense for such
period was approximately $_____________, the Company's consolidated tax
expense for such period was $____________ and the ratio of its consolidated
net income before interest expense and tax expense to its consolidated
interest expense for such period was approximately (and in any event not
less than) __ to 1.00.
ITEM E. Restricted Payments. [No Restricted Payments were made
during the Fiscal Quarter ending on the Computation Date.] [As of the
Computation Date, an aggregate of $______ of Restricted Payments have been
made since December 31, 1992, which did not exceed the maximum permitted
Restricted Payments as of such date as computed on Attachment 3.]
ITEM F. Leases. The aggregate rental amounts paid by the
Company as lessee under leases of real or personal property during the period
commencing at the beginning of the fiscal year in which the Computation
Date falls and ending on the Computation Date was approximately (and in any
event not greater than) $_________. The aggregate rental payments due or to
become due from the Company as lessee under leases of real or personal
property during the full remaining terms thereof is approximately (and in
any event not greater than) $_______________.
ITEM G. Lease Portfolio. On the Computation Date, the
Company's Average Original Equipment Cost of Assets for purposes of Section
9.24 of the Credit Agreement was ____________.
ITEM H. Certification. The Company hereby certifies that:
l. all of the information set forth in this Certificate (and
in the Attachments hereto) is true and correct in all material
respects; and
2. except as stated on Attachment 4 hereto, no Default had
occurred and was continuing at the Computation Date.
* * * * *
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its President or Authorized Officer this
_______________ day of ____________________, 19__.
TRANS LEASING INTERNATIONAL, INC.
By______________________________
[President/Vice President, Finance and Chief
Financial Officer]
ATTACHMENT 1
(to / / Compliance
Certificate)
CONSOLIDATED TOTAL LIABILITIES TO TANGIBLE
NET WORTH RATIO ON _________________, 19__
COMPUTATION DATE
1 Shareholder's equity (including capital
stock, additional paid-in capital and
retained earnings after deducting
treasury stock) of the Company and its
consolidated Subsidiaries. . . . . . . . . . . . . . . . . $
2 Subordinated Debt of the Company and its
consolidated Subsidiaries (other than
that portion thereof which is due within
twelve (12) months). . . . . . . . . . . . . . . . . . . . $
3 Aggregate amount of intangible assets of
the Company and its consolidated
Subsidiaries (goodwill, unamortized debt
discount and expense, unamortized
deferred charges). . . . . . . . . . . . . . . . . . . . . $
4 Aggregate amount of Restricted Cash of
the Company and the consolidated
Subsidiaries (other than Securitization
Subsidiaries). . . . . . . . . . . . . . . . . . . . . . . $
5 Net Assets of Securitization
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . $
6 Consolidated Tangible Net Worth (Sum of
Item 1 and Item 2 minus sum of Item 3,
Item 4 and Item 5) . . . . . . . . . . . . . . . . . . . . $
7 Total liabilities of the Company and its
consolidated Subsidiaries. . . . . . . . . . . . . . . . . $
8 Contingent obligations or liabilities of
the Company and its consolidated
Subsidiaries (excluding those as to
which a dollar amount is not
ascertainable) . . . . . . . . . . . . . . . . . . . . . . $
9 Deferred taxes of the Company and its
consolidated Subsidiaries. . . . . . . . . . . . . . . . . $
10 Company's and its consolidated
Subsidiaries' consolidated total assets. . . . . . . . . . $
11 8% of Item 10. . . . . . . . . . . . . . . . . . . . . . . $
12 Lesser of Item 9 and Item 11 . . . . . . . . . . . . . . . $
13 Company's Consolidated Total Liabilities
(Sum of Item 7 and Item 8 minus sum of
Item 2 and Item 12 . . . . . . . . . . . . . . . . . . . . $
14 Company's Consolidated Total Liabilities
to Consolidated Tangible Net Worth
(Ratio of Item 13 to Item 6) . . . . . . . . . . . . . . . ____ to ____
[Items 7-13 exclude Securitization Subsidiaries]
ATTACHMENT 2
(to / / Compliance
Certificate)
TANGIBLE NET WORTH
ON _________________, 19__
COMPUTATION DATE
1. Consolidated Tangible Net Worth. . . . . . . . . . $
2. Net Assets of Securitization
Subsidiaries . . . . . . . . . . . . . . . . . . . $
3. Amounts paid since December 31, 1992 to
redeem stock currently retained as
treasury stock . . . . . . . . . . . . . . . . . . $
4. Lesser of Item 3 and $5,000,000. . . . . . . . . . $
5. Subordinated Debt included in Item 1 . . . . . . . $
6. Consolidated cumulative net income since
January 1, 1993. . . . . . . . . . . . . . . . . . $
7. 50% of Item 6 (not less than zero) . . . . . . . . $
8. Required Minimum Tangible Net Worth (Sum
of $17,000,000 plus Item 7). . . . . . . . . . . . $
9. Tangible Net Worth
(Sum of Item 1, Item 2 and Item 4 minus
Item 5). . . . . . . . . . . . . . . . . . . . . . S
ATTACHMENT 3
(To / / Compliance Certificate)
Restricted Payments on ___________, 199___
Computation Date
1. Amounts paid since December 31, 1992 to redeem or purchase stock
$
2. Non-stock dividends paid since December 31, 1992. . . . $
3. Amounts paid since December 31, 1992 to purchase, redeem
or prepay subordinated indebtedness (other than to the
extent of the net proceeds to the Company or any
Subsidiary from the issue after December 31, 1992 of other
subordinated debt). . . . . . . . . . . . . . . . . . . $
4. Consolidated cumulative net income (loss) since January 1, 1993
$
5. 50% of Item 4 (100% if loss). . . . . . . . . . . . . . $
6. Net proceeds from sale or issue of Company's capital stock
or warrants, rights or options to acquire capital stock since
December 31, 1992 . . . . . . . . . . . . . . . . . . . $
7. Maximum Restricted Payments(sum of $2,000,000,Item 5 and Item 6)
$
8. Restricted Payments (sum of Item 1, Item 2 and Item 3). $
ATTACHMENT 4
(To / / Compliance Certificate)
Notice by Company of the occurrence of an Event of Default or Unmatured
Event of Default and steps being taken to cure it.
EXHIBIT E
BORROWING BASE CERTIFICATE
The First National Bank
of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: _____________
Re: Credit Agreement, dated as of ___________, 1996 (herein,
together with any amendments from time to time made thereto,
called the "Credit Agreement"), between Trans Leasing
International, Inc. (the "Company") and The First National
Bank of Chicago ("First Chicago"), individually and as Agent
(in such capacity, the "Agent").
Ladies/Gentlemen:
Terms to which meanings are ascribed in the Credit Agreement are
used in this Borrowing Base Certificate with such meanings.
The Company hereby certifies that the outstanding principal
balance of the Loans on ________________________ did not exceed the Borrowing
Base. The related computations are set forth in Schedule 1 hereto.
IN WITNESS WHEREOF, the Company has caused this Borrowing Base
Certificate to be executed and delivered by the undersigned representative
hereunto duly authorized on the ___ day of __________, 19__.
TRANS LEASING INTERNATIONAL, INC.
By______________________________
Title___________________________
[President/Vice President,
Finance and Chief Financial
Officer]
Schedule 1 to
Borrowing Base Certificate
Dated ________________
1 Eligible Receivables
--------------------
(a) Total Eligible Lease Receivables. . . . . . . . . $__________
(b) Total Eligible Vendor Note Receivables. . . . . . $__________
(c) Total Eligible Customer Note
Receivables (not to exceed $5,900,000). . . . . . $__________
(d) Present Value of Item 1(a) (using
Receivable Discount Rate) . . . . . . . . . . . . $__________
(e) Present Value of Item 1(b) (using
Receivable Discount Rate) . . . . . . . . . . . . $__________
(f) 85% of sum of Item 1(c), 1(d) and 1(e). . . . . . $__________
(g) Total Unrestricted Cash . . . . . . . . . . . . . $__________
(h) Total Residuals under Eligible Leases . . . . . . $__________
(i) Present Value of Item 1(h) (using
Receivable Discount Rate) . . . . . . . . . . . . $__________
(j) Aggregate acquisition cost of property
leased under Eligible Leases. . . . . . . . . . . $__________
(k) 11% of Item 1(j). . . . . . . . . . . . . . . . . $__________
(l) 25% of the LESSER of Item 1(i) and
Item 1(k) . . . . . . . . . . . . . . . . . . . . $__________
(m) Sum of Items 1(f), 1(g) and 1(l). . . . . . . . . $__________
2 Consolidated Total Liabilities
------------------------------
(a) Consolidated total liabilities (other
than Loans under the Agreement) . . . . . . . . . $__________
(b) Contingent obligations or liabilities
of Company and its Subsidiaries on
consolidated basis. . . . . . . . . . . . . . . . $__________
(c) Deferred taxes. . . . . . . . . . . . . . . . . . $__________
(d) Consolidated total assets . . . . . . . . . . . . $__________
(e) 8% of Item 2(d) . . . . . . . . . . . . . . . . . $__________
(f) Lesser of Item 2(c) and Item 2(e) . . . . . . . . $__________
(g) Subordinated Debt (other than due
within 12 months) . . . . . . . . . . . . . . . . $__________
(h) Sum of Items 2(a) and 2(b), minus sum
of Items 2(f) and 2(g) . . . . . . . . . . . . . $__________
3 Borrowing Base(Excess of Item 1(m)over Item 2(h)) $__________
--------------
4 Total Loans Outstanding. . . . . . . . . . . . . .$__________
-----------------------
(a) Revolving Loans $__________
(b) Term Loans $__________
5 Borrowing Availability(Excess of Item 3 over Item 4)
---------------------- $__________
6 Mandatory Prepayment Required (Excess of Item 4 over Item 3)
-----------------------------
$__________
