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EXHIBIT 10(n)
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
between
XXXXX RENTS, INC.
"Company"
and
FIRST UNION NATIONAL BANK
"Bank"
Dated as of October 1, 2000
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LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of October 1, 2000 between
XXXXX RENTS, INC., a Georgia corporation ("Company"), and FIRST UNION NATIONAL
BANK, a national banking association ("Bank");
WITNESSETH:
In consideration of the premises and of the mutual covenants herein
contained and to induce Bank to extend credit to Company, the parties agree as
follows:
1. DEFINITIONS.
1.1 Defined Terms. Capitalized terms that are not
otherwise defined herein shall have the meanings set forth below. If not so
defined below or herein, such capitalized terms shall have the meanings
assigned to them in the Indenture.
"Affiliate" of a Person means (a) any Person directly or indirectly
owning 5% or more of the voting stock or rights of such named Person or of
which the named Person owns 5% or more of such voting stock or rights; (b) any
Person controlling, controlled by or under common control with such named
Person; (c) any officer, director or employee of such named Person or any
Affiliate of the named Person; and (d) any family member of the named Person or
any Affiliate of such named Person.
"Arbitration Rules" has the meaning set forth in Section 8.15.
"Authority" shall mean any governmental authority, central bank or
comparable agency charged with the interpretation or administration of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof.
"Bonds" means the $4,200,000 Fort Bend County Industrial Development
Corporation Industrial Development Revenue Bonds (Xxxxx Rents, Inc. Project),
Series 2000.
"Bond Documents" means, collectively, the Indenture, Loan Agreement,
the Bonds, the Remarketing Agreement, the Placement Agreement and the Placement
Memorandum, as the same may be amended, modified or supplemented from time to
time in accordance with their respective terms.
"Business Day" shall mean any day on which the offices of the Bank at
which drawings on the Letter of Credit are made, the Trustee, the Paying Agent,
the Tender Agent, the Bond Registrar and the Remarketing Agent are each open
for business (which is not a Saturday or Sunday) and on which the New York
Stock Exchange is not closed.
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"Change of Law" shall mean the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any Authority.
"Conversion Draft" shall have the meaning ascribed to such term in the
Letter of Credit.
"Credit Agreement" means Second Amended and Restated Revolving Credit
and Term Loan Agreement, dated as of January 6, 1995, between the Company and
Banks named therein (including the Bank), as amended or modified from time to
time.
"Default" or "default" means any of the events specified in Section
7.1, whether or not any requirement in such Section for the giving of notice or
the lapse of time or the happening of any further condition, event or act shall
have been satisfied.
"Default Rate" means the "default rate" of interest per annum equal to
the Prime Rate plus 2% per annum.
"Disputes" has the meaning set forth in Section 8.15.
"Event of Default" means any event specified as such in Section 7.1
hereof ("Events of Default"), provided that there shall have been satisfied any
requirement in connection with such event for the giving of notice or the lapse
of time, or both.
"Indenture" means the Trust Indenture, dated as of October 1, 2000, by
and between the Issuer and First Union National Bank, as trustee, as it may be
modified from time to time.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement designed to protect a
Person against fluctuations in interest rates or to hedge such Person's
interest rate risk exposure.
"Issuer" means Fort Bend County Industrial Development Corporation and
its successors and assigns.
"Loan Agreement" means the Loan Agreement, dated as of October 1,
2000, between the Issuer and the Company, as amended from time to time.
"Loan Documents" means this Agreement, the Pledge Agreement, any
Interest Rate Agreement, and all other documents and instruments now or
hereafter evidencing, describing, guaranteeing or securing the Obligations
contemplated hereby or delivered in connection herewith, as they may be
modified.
"Material Adverse Effect" means any (i) material adverse effect upon
the validity, performance or enforceability of any of the Loan Documents or the
Bond Documents or any of the transactions contemplated hereby or thereby, (ii)
material adverse effect upon the properties, business, prospects or condition
(financial or otherwise) of Company and its Subsidiaries, taken as a whole, any
Subsidiary and/or any other Person obligated under any of the Loan Documents
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or the Bond Documents, or (iii) material adverse effect upon the ability of
Company, any Subsidiary or any other Person to fulfill any obligation under any
of the Loan Documents or the Bond Documents.
"Obligations" means all obligations now or hereafter owed to Bank by
Company, whether related or unrelated to the Letter of Credit and Company's
reimbursement obligations hereunder, including, without limitation, amounts
owed or to be owed under the terms of the Loan Documents and the Bond
Documents, or arising out of the transactions described therein, including,
without limitation, sums advanced to pay overdrafts on any account maintained
by Company with Bank, reimbursement obligations for other outstanding letters
of credit or banker's acceptances issued for the account of Company or its
Subsidiaries, amounts paid by Bank under letters of credit or drafts accepted
by Bank for the account of Company or its Subsidiaries, together with all
interest accruing thereon, all obligations under any swap agreements as defined
in 11 U.S.C. ss.101 between Bank and Company whenever executed, all fees, all
costs of collection, attorneys' fees and expenses of or advances by Bank which
Bank pays or incurs in discharge of obligations of Company, whether such
amounts are now due or hereafter become due, direct or indirect and whether
such amounts due are from time to time reduced or entirely extinguished and
thereafter re-incurred.
"Person" means any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company,
limited or general partnership, limited liability company, any government or
any agency or political subdivision of any government, or any other entity or
organization.
"Placement Agreement" means the Placement Agent Agreement, dated the
date of issuance of the Bonds by and among the Issuer, the Company and First
Union National Bank, as Placement Agent for the Bonds.
"Pledge Agreement" means the Pledge Agreement dated as of October 1,
2000 from the Company to the Bank, as amended, restated or supplemented from
time to time.
"Prime Rate" means that rate announced by Bank from time to time as
its prime rate and is one of several interest rate bases used by Bank. Bank
lends at rates both above and below Bank's Prime Rate, and Company acknowledges
that Bank's Prime Rate is not represented or intended to be the lowest or most
favorable rate of interest offered by Bank. The rate of Bank's Prime Rate as
that rate may change from time to time with changes to occur on the date Bank's
Prime Rate changes.
"Private Placement Memorandum" the Private Placement Memorandum dated
the date of issuance of, and relating to, the Bonds.
"Project" shall have the meaning ascribed to the term in the
Indenture.
"Remarketing Agreement" means the Remarketing Agreement, dated as of
October 1, 2000, by and between the Company and First Union National Bank, as
Remarketing Agent, as supplemented and amended from time to time.
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"Solvent" means, as to any Person, that such Person has capital
sufficient to carry on its business and transactions in which it is currently
engaged and all business and transactions in which it is about to engage, is
able to pay its debts as they mature, and has assets having a fair valuation
greater than its liabilities, at fair valuation.
"Stated Expiration Date" means October 15, 2003, the expiration date
of the Letter of Credit.
"Subsidiary" means any corporation, partnership or other entity in
which Company, directly or indirectly, owns more than fifty percent (50%) of
the stock, capital or income interests, or other beneficial interests, or which
is effectively controlled by such Person.
"Tender Advance" has the meaning assigned to that term in Section 2.3
of this Agreement.
"Tender Draft" has the meaning assigned to that term in the Letter of
Credit.
"Termination Date" means the last day a drawing is available under the
Letter of Credit.
"Trustee" means any Person or group of Persons at the time serving as
trustee under the Indenture.
1.2. Financial Terms. All financial terms used herein
shall have the meanings assigned to them under GAAP unless another meaning
shall be specified.
2. THE LETTER OF CREDIT FACILITY.
2.1. Letter of Credit. The Bank agrees, on the terms and
conditions hereinafter set forth, to issue and deliver the Letter of Credit in
favor of the Trustee in substantially the form of Exhibit A attached hereto
upon fulfillment of the applicable conditions set forth in Article III hereof.
The Bank agrees that any and all payments under the Letter of Credit will be
made with the Bank's own funds.
2.2. Reimbursement and Other Payments. Except as
otherwise provided in Section 3.3 below, the Company shall pay to the Bank:
(a) on or before 3:00 P.M. on the date that any amount
is drawn under the Letter of Credit, a sum (together with interest on
such sum from the date such amount is drawn until the same is paid, at
the rate per annum provided in clause (b) of this Section 2.2) equal
to such amount so drawn under the Letter of Credit;
(b) on demand, interest on any and all amounts remaining
unpaid by the Company when due hereunder from the date such amounts
become due until payment thereof in full, at a fluctuating interest
rate per annum equal at all times to the lesser of
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the Prime Rate plus two percent (2%) or the highest lawful rate
permitted by applicable law, provided, after an Event of Default,
interest shall accrue at the Default Rate;
(c) within 10 days of demand by the Bank, any and all
reasonable expenses actually incurred by the Bank in enforcing any
rights under this Agreement and the other Loan Documents; and
(d) within 10 days of demand by the Bank all charges,
commissions, costs and expenses set forth in Sections 2.4, 2.11 and
8.3 hereof
2.3. Tender Advances.
(a) If the Bank shall make any payment of that portion
of the purchase price corresponding to principal and interest of the
Bonds drawn under the Letter of Credit pursuant to a Tender Draft and
the conditions set forth in Section 3.3 shall have been fulfilled,
such payment shall constitute a tender advance made by the Bank to the
Company on the date and in the amount of such payment (a "Tender
Advance"); provided that if the conditions of said Section 3.3 have
not been fulfilled, the amount so drawn pursuant to the Tender Draft
shall be payable in accordance with the terms of Section 2.2(a) above.
Notwithstanding any other provision hereof, the Company shall repay
the unpaid amount of each Tender Advance, together with all unpaid
interest thereon, on the earlier to occur of: (i) such date as any
Bonds purchased pursuant to a Tender Draft are resold as provided in
paragraph 2.3(d) hereof; (ii) on the date one year and one day
following the date of such Tender Advance; or (iii) the Termination
Date. The Company may prepay the outstanding amount of any Tender
Advance in whole or in part, together with accrued interest to the
date of such prepayment on the amount prepaid.
(b) The Company shall pay interest on the unpaid amount
of each Tender Advance from the date of such Tender Advance until such
amount is paid in full, payable monthly, in arrears, on the first day
of each month during the term of each Tender Advance and on the date
such amount is paid in full, at a fluctuating interest rate per annum
in effect from time to time equal to the Prime Rate, provided that the
unpaid amount of any Tender Advance which is not paid when due shall
bear interest at the Default Rate, payable on demand and on the date
such amount is paid in full.
(c) Pursuant to the Pledge Agreement the Company has
agreed that, in accordance with the terms of the Indenture, Bonds
purchased with proceeds of any Tender Draft or a Conversion Draft
shall be delivered by the Tender Agent to the Bank or its designee to
be held by the Bank or its designee in pledge as collateral securing
the Company's payment obligations to the Bank hereunder. Bonds so
delivered to the Bank or its designee shall be registered in the name
of the Company, as provided for in Section 3 of the Pledge Agreement.
(d) Prior to or simultaneously with the resale of
Pledged Bonds, the Company shall prepay the then outstanding Tender
Advances (in the order in which they were made) by paying to the Bank
an amount equal to the sum of (A) the amounts advanced by the Bank
pursuant to the corresponding Tender Drafts or a Conversion Drafts
relating to such Bonds, plus (B) the aggregate amount of accrued and
unpaid interest on such Tender Advances. Such
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payment shall be applied by the Bank in reimbursement of such drawings
(and as prepayment of Tender Advances resulting from such drawings in
the manner described above), and, upon receipt by the Bank of a
certificate completed and signed by the Trustee in substantially the
form of Annex F to the Letter of Credit, the Company irrevocably
authorizes the Bank to rely on such certificate and to reinstate the
Letter of Credit in accordance therewith. Funds held by the Tender
Agent as a result of sales of the Pledged Bonds by the Remarketing
Agent shall be paid to the Bank by the Tender Agent to be applied to
the amounts owing by Company to the Bank pursuant to this paragraph
(d). Upon payment to the Bank of the amount of such Tender Advance to
be prepaid, together with accrued interest on such Tender Advance to
the date of such prepayment on the amount to be prepaid, the principal
amount outstanding of Tender Advances shall be reduced by the amount
of such prepayment and interest shall cease to accrue on the amount
prepaid.
(e) Nothing herein shall affect any of the Company's
obligations under any Interest Rate Agreement, including Company's
obligation to pay breakage fees, if any, as described therein.
2.4. Letter of Credit Commission and Fees
(a) The Company shall pay to the Bank a fee or
commission at the rate of half of one percent (0.5%) per annum on the
amount available to be drawn under the Letter of Credit (computed on
the date that such commission is payable) from and including the date
of issuance of the Letter of Credit until the Termination Date,
payable annually in advance on the date of issuance and thereafter
payable on anniversary of the date of issuance of each year,
commencing October 26, 2001.
(b) The Company shall pay to the Bank, upon transfer of
the Letter of Credit in accordance with its terms, a transfer fee of
$1,000.
(c) The Company shall pay to the Bank, upon each drawing
under the Letter of Credit in accordance with its terms, a fee of $50
per drawing.
2.5. Overdue Amounts. Any payments not made as and when
due shall bear interest from the date due until paid at the Default Rate, in
Bank's discretion.
2.6. Computation. All payments of interest, commission,
annual letter of credit fees and other charges under this Agreement shall be
computed on the per annum basis of a year of 365 days and calculated for the
actual number of days elapsed.
2.7. Payment Procedure. All payments made by the Company
under this Agreement shall be made to the Bank in lawful currency of the United
States of America and in immediately available funds at the Bank's office in
Atlanta, Georgia before 2:00 p.m. (prevailing Eastern time) on the date when
due, except for payments made pursuant to Section 2.2(a).
2.8. Business Days. If the date for any payment hereunder
falls on a day which is not a Business Day, then for all purposes of this
Agreement and the other Loan
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Documents, the same shall be deemed to have fallen on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payments of interest or commission, as the case may be.
2.9. Extension of Stated Expiration Date. The Bank may,
in its sole and absolute discretion, agree that the Stated Expiration Date may
be extended for successive one-year terms effective each anniversary date of
the issuance of the Letter of Credit.
2.10. Statement of Account. If Bank provides Company with
a statement of account on a periodic basis, such statement will be presumed
complete and accurate and will be definitive and binding on Company, unless
objected to with specificity by Company in writing within forty-five (45) days
after receipt.
2.11. Increased Costs; Reduced Returns.
(a) If after the date hereof, a Change of Law or
compliance by Bank with any request or directive (whether or not
having the force of law) of any Authority either: (i) shall subject
Bank to any tax, duty or other charge with respect to the Letter of
Credit or its obligations hereunder, or shall change the basis of
taxation of payments to Bank of the principal of or interest on Letter
of Credit or its obligations hereunder or any other amounts due under
this Agreement or the other Loan Documents in respect of the Letter of
Credit or its obligations hereunder (except for changes in the rate of
tax on the overall net income of Bank imposed by the jurisdiction in
which Bank's principal executive office is located); or (ii) shall
impose, modify or deem applicable any reserve, special deposit
insurance or similar requirement (including, without limitation, any
such requirements imposed by the Board of Governors of the Federal
Reserve System) against assets of, deposits with or for the account
of, or credit extended by, Bank; or (iii) shall impose on the Bank or
the London Interbank Market any other similar condition affecting the
Letter of Credit or its obligations hereunder; and the result of any
of the foregoing is to increase the cost to Bank of making or
maintaining Letter of Credit or its obligations hereunder, or to
reduce the amount received or receivable by Bank under this Agreement,
under the Letter of Credit or hereunder or under the other Loan
Documents with respect thereto, by an amount deemed by Bank to be
material, then, within fifteen (15) days after demand by Bank, Company
shall pay to Bank such additional amount or amounts as will compensate
Bank for such increased cost or reduction.
(b) If Bank shall have determined that after the date
hereof the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof, or compliance by Bank
with any request or directive regarding capital adequacy (whether or
not having the force of law) of any Authority, has or would have the
direct effect of reducing the rate of return on Bank's capital as a
consequence of its obligations with respect to such adoption, change
or compliance (taking into consideration Bank's policies with respect
to capital adequacy), by an amount deemed by Bank to be material, then
from time to time, within fifteen (15) days after demand by Bank,
Company shall pay to Bank such additional amount or amounts as will
compensate Bank for such reduction.
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(c) Bank will promptly notify Company of any event of
which it has knowledge, occurring after the date hereof, which will
entitle Bank to compensation pursuant to this Section. A certificate
of Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such
amount, Bank may use any reasonable averaging and attribution methods.
2.12. Obligations Absolute. The obligations of the Company
under this Agreement shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement, under
all circumstances whatsoever, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of the Letter
of Credit, the Bonds, any of the other Bond Documents, any of the Loan
Documents or any other agreement or instrument related thereto;
(b) any amendment or waiver of or any consent to
departure from the terms of the Letter of Credit, the Bonds, any of
the other Bond Documents, any of the Loan Documents or any other
agreement or instrument related thereto;
(c) the existence of any claim, setoff, defense or other
right which the Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any Person
for whom the Trustee, any such beneficiary or any such transferee may
be acting), the Bank or any other Person, whether in connection with
this Agreement, the Loan Documents, the Letter of Credit, the Bond
Documents, the Project or any unrelated transaction;
(d) any statement, draft or other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect, or any statement therein being untrue
or inaccurate in any respect whatsoever, provided the Company shall be
under no obligation to make any payment hereunder resulting from the
Bank's gross negligence in accepting any such forged or fraudulent
draft or document; or
(e) the surrender or impairment of any security for the
performance or observance of any of the terms of this Agreement, or
any of the other Loan Documents.
3. CONDITIONS PRECEDENT TO ISSUANCE; CHANGE OF INTEREST RATE
MODES.
3.1. Conditions Precedent to Initial Advance. In addition
to any other requirement set forth in this Agreement, Bank will not issue the
Letter of Credit unless and until the following conditions shall have been
satisfied:
(a) Documents. Company and each other party to any Loan
Document and Bond Documents, as applicable, shall have executed and delivered
this Agreement, the Loan Agreement, and other required Loan Documents, the
Indenture and all of the required Bond Documents, all in form and substance
satisfactory to Bank.
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(b) Supporting Documents. Company shall cause to be
delivered to Bank the following documents:
(i) A copy of the governing instruments of
Company, and a good standing certificate of Company,
certified by the appropriate official of its state of
organization, if different;
(ii) Incumbency certificate of Company and each
other Person executing any Loan Documents, signed by the
Secretary or another authorized officer of Company or such
other Person, authorizing the execution, delivery and
performance of the Loan Documents;
(iii) The legal opinion of Company's legal
counsel addressed to Bank regarding such matters as Bank and
its counsel may request; and
(iv) Satisfactory evidence of payment of all
fees due and reimbursement of all costs incurred by Bank, and
evidence of payment to other parties of all fees or costs
which Company is required under this Agreement to pay by the
date of the initial Advance.
(c) Additional Documents. Company shall have delivered
to Bank all additional opinions, documents, certificates and other assurances
that Bank or its counsel may require.
(d) Payment of Fees. Company shall have paid all fees,
costs and expenses as required by the Loan Documents in connection with the
Closing.
(e) Adverse Events. There shall have been no
introduction of or change in, or in the interpretation of, any law or
regulation that would make it unlawful or unduly burdensome for the Bank to
issue the Letter of Credit, no outbreak or escalation of hostilities or other
calamity or crisis affecting the Bank, no suspension of or material limitation
on trading on the New York Stock Exchange or any other national securities
exchange, no declaration of a general banking moratorium by United States,
North Carolina, Texas or Georgia banking authorities, and no establishment of
any new restrictions on transactions in securities or on banks materially
affecting the free market for securities or the extension of credit by banks.
3.2. Conditions Precedent to Each Tender Advance. Each
payment made by the Bank under the Letter of Credit pursuant to a Tender Draft
shall constitute a Tender Advance hereunder only if on the date of such payment
the following statements shall be true:
(a) No Default. No Default or Event of Default then
exists or would be caused by the making of such Tender Advance.
(b) Correctness of Representations. The representations
and warranties contained in Article 4 of this Agreement, in the Loan Agreement,
and in the Loan Documents are
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correct in all material respects on and as of the date of such Tender Advance
as though made on and as of such date; and.
(c) No Adverse Change. There shall have been no change
which could have a Material Adverse Effect on the condition, financial or
otherwise, of Company from such condition as it existed on the date of the most
recent financial statements of such Person delivered prior to date hereof.
(d) Further Assurances. Company shall have delivered
such further documentation or assurances as Bank may reasonably require. Unless
the Company shall have previously advised the Bank in writing or the Bank has
actual knowledge that one or more of the above statements is no longer true (in
which case Company shall not be entitled to a Tender Advance), the Company
shall be deemed to have represented and warranted, on the date of payment by
the Bank under the Letter of Credit pursuant to a Tender Draft, that on the
date of such payment the above statements are true and correct.
3.3. Changes in Interest Rate Modes. The Company shall
not convert the interest rate mode on the Bonds to a different interest rate
mode without the written consent of the Bank.
4. REPRESENTATIONS AND WARRANTIES. In order to induce Bank to
enter into this Agreement and to issue the Letter of Credit provided for
herein, Company hereby represents and warrants (all of which shall survive the
execution and delivery of the Loan Documents and all of which shall be deemed
made as of the date hereof and as of the date of each Tender Advance), on
behalf of it, that:
4.1. Valid Existence and Power. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and is duly qualified or licensed
to transact business in all places where the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect on it; and it and each
other Person which is a party to any Loan Document or Bond Document (other than
Bank) has the power to make and perform the Loan Documents and Bond Documents
executed by it, and all such instruments will constitute the legal, valid and
binding obligations of such Person, enforceable in accordance with their
respective terms, subject only to bankruptcy and similar laws affecting
creditors' rights generally.
4.2. Authority. The execution, delivery and performance
thereof by it and each other Person (other than Bank) executing any Loan
Document or Bond Document have been duly authorized by all necessary action of
such Person, and do not and will not violate any provision of law or
regulation, or any writ, order or decree of any court or Authority or any
provision of the governing instruments of such Person, and do not and will not,
with the passage of time or the giving of notice, result in a breach of, or
constitute a default or require any consent under, or result in the creation of
any Lien upon any property or assets of such Person pursuant to, any law,
regulation, instrument or agreement to which any such Person is a party or by
which any such Person or its respective properties may be subject, bound or
affected.
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4.3. Financial Condition. Other than as disclosed in
financial statements delivered on or prior to the date hereof to Bank, neither
it nor any Subsidiary has any direct or contingent obligations or liabilities
(including any guarantees or leases) or any unrealized or anticipated losses
from any commitments of such Person which could reasonably be expected to have
a Material Adverse Effect; all such financial statements have been prepared in
accordance with GAAP and fairly present the financial condition of Company or
Subsidiary, as the case may be, as of the date thereof; and it is not aware of
any adverse fact (other than facts which are generally available to the public
and not particular to it, such as general economic or industry trends)
concerning its financial or business condition or future prospects or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect
and which has not been fully disclosed to Bank, including any adverse change in
the operations or financial condition of such Person since the date of the most
recent financial statements delivered to Bank; and it is Solvent, and after
consummation of the transactions set forth in this Agreement and the other Loan
Documents and Bond Documents, it will be Solvent.
4.4. Litigation. There are no suits or proceedings
pending, or to its best knowledge threatened, before any court or by or before
any governmental or regulatory authority, commission, bureau or agency or
public regulatory body against or affecting it, any Subsidiary, or their
assets, which if adversely determined could reasonably be expected to have a
Material Adverse Effect.
4.5. Agreements, Etc. Neither it nor any Subsidiary is a
party to any agreement or instrument or subject to any court order,
governmental decree or any charter, limited partnership or other corporate
restriction, materially adversely affecting its business, assets, operations or
condition (financial or otherwise), nor is any such Person in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party, or any law, regulation, decree, order or the like.
4.6. Authorizations. All authorizations, consents,
approvals and licenses required under applicable law or regulation for the
ownership or operation of the property owned or operated by it or any
Subsidiary or for the conduct of any business in which it is engaged have been
duly issued and are in full force and effect, and it is not in default, nor has
any event occurred which with the passage of time or the giving of notice, or
both, would constitute a default, under any of the terms or provisions of any
part thereof, or under any order, decree, ruling, regulation, closing agreement
or other decision or instrument of any Authority having jurisdiction over such
Person, which default could reasonably be expected to have a Material Adverse
Effect. Except as noted herein, no approval, consent or authorization of, or
filing or registration with, any Authority or agency is required with respect
to the execution, delivery or performance of any Loan Document or Bond
Document.
4.7. Investment Company Act. Neither it nor any
Subsidiary is an "investment company" as defined in the Investment Company Act
of 1940, as amended.
4.8. Insider. It is not, and no Person having "control"
(as that term is defined in 12 X.X.X.xx. 375(b)(5) or in regulations
promulgated pursuant thereto) of it is, an "executive
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officer," "director," or "principal shareholder" (as those terms are defined in
12 X.X.X.xx. 375(b) or in regulations promulgated pursuant thereto) of Bank, of
a bank holding company of which Bank is a subsidiary, or of any subsidiary of a
bank holding company of which Bank is a subsidiary.
4.9. Full Disclosure. There is no material fact which is
known or which should be known by it that it has not disclosed to Bank which
could have a Material Adverse Effect; and no Loan Document, nor any agreement,
document, certificate or statement delivered by it to Bank, contains any untrue
statement of a material fact or omits to state any material fact which is known
or which should be known by it necessary to keep the other statements from
being misleading.
5. AFFIRMATIVE COVENANTS OF COMPANY. Company covenants and
agrees that from the date hereof and until payment in full of the Obligations
and the formal termination of this Agreement, Company and each Subsidiary:
5.1. Incorporation of Affirmative Covenants of Credit
Agreement. Shall comply with the covenants, agreements and obligations of
Article VIII of the Credit Agreement, as if such covenants, agreements or
obligations (as modified from time to time) were specified herein. In the event
that the Credit Agreement shall terminate prior to the termination of this
Agreement, such covenants, agreements or obligations in verbatim under Article
VIII of the Credit Agreement existing at the time of the termination of the
Credit Agreement shall become a part of this Agreement and shall be in effect
hereunder.
5.2. Use of Letter of Credit. Shall use the Letter of
Credit to secure its obligations with respect to the Bonds.
5.3. Maintenance of Business and Properties. Shall at all
times maintain, preserve and protect its material property used or useful in
the conduct of its business, and keep the same in good repair, working order
and condition, except for reasonable wear and tear, and from time to time make,
or cause to be made, all material needful and proper repairs, renewals,
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be conducted properly and in accordance with
standards generally accepted in businesses of a similar type and size at all
times, and maintain and keep in full force and effect all material licenses and
permits necessary to the proper conduct of its business. Shall maintain
insurance as may be required by law or as customary and usual.
5.4. Notice of Default. Shall provide to Bank immediate
notice of (a) the occurrence of a Default or Event of Default and what action
(if any) it is taking to correct the same, (b) any material litigation or any
judgment against it or its assets, (c) any damage or loss to property that
could reasonably be expected to have a Material Adverse Effect, (d) any
Reportable Event, as defined in the Employment Retirement Income Security Act
of 1974, as amended, that could reasonably be expected to have a Material
Adverse Effect, (e) any rejection, return, offset, dispute, loss or other
circumstance that could reasonably be expected to have a Material Adverse
Effect, (f) the cancellation or termination of, or any default under, any
agreement to which it is a party or by which any of its properties are bound,
which cancellation or termination could
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reasonably be expected to have a Material Adverse Effect, or any acceleration
of the maturity of any of its debt; and (g) any loss of licenses or permits,
which loss could reasonably be expected to have a Material Adverse Effect.
6. NEGATIVE COVENANTS OF COMPANY. Company covenants and agrees
that from the date hereof and until payment in full of the Obligations and the
formal termination of this Agreement, to comply with the covenants, agreements
and obligations (as modified from time to time) in Article IX of the Credit
Agreement, as if such covenants, agreements or obligations were specified
herein. In the event that the Credit Agreement shall terminate prior to the
termination of this agreement, such covenants, agreements or obligations in
verbatim under Article IX of the Credit Agreement existing at the time of the
termination of the Credit Agreement shall become a part of this Agreement and
shall be in effect hereunder.
7. DEFAULT.
7.1. Events of Default. Each of the following shall
constitute an Event of Default:
(a) There shall occur any default by Company in the
payment of (i) any principal of or interest on or with respect to the Bonds,
(ii) any amounts due hereunder or under any other Loan Document or Bond
Documents, or (iii) any other Obligations; or
(b) There shall occur any default by Company or any
other party to any Loan Document or Bond Document (other than Bank) in the
performance of any agreement, covenant or obligation contained in this
Agreement or such Loan Document or such Bond Document not provided for
elsewhere in this Section 7 and such Default shall continue for a period of 30
days after the earlier of (i) the day on which an officer of the Company first
obtains actual knowledge of such default or (ii) notice thereof shall have been
given to the Company by the Bank; or
(c) Any representation or warranty made by the Company
or any other party to any Loan Document or Bond Document (other than Bank)
herein or therein or in any certificate or report furnished in connection
herewith or therewith shall prove to have been untrue or incorrect in any
material respect when made; or
(d) Any Event of Default shall occur and be continuing
under (and as defined in) the Credit Agreement; or
(e) Company or any Subsidiary or any other party to any
Loan Document or Bond Document shall voluntarily dissolve, liquidate or
terminate operations or apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of such
Person or of all or of a substantial part of its assets, admit in writing its
inability, or be generally unable, to pay its debts as the debts become due,
make a general assignment for the benefit of its creditors, commence a
voluntary case under the federal Bankruptcy Code (as now or hereafter in
effect), file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, fail to controvert in a timely and appropriate manner, or
acquiesce in
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writing to, any petition filed against it in an involuntary case under
Bankruptcy Code, or take any corporate action for the purpose of effecting any
of the foregoing; or
(f) An involuntary petition or complaint shall be filed
against Company or any other party to any Loan Document or Bond Document
seeking bankruptcy relief or reorganization or the appointment of a receiver,
custodian, trustee, intervenor or liquidator of Company or any other party to
any Loan Document, of all or substantially all of its assets, and such petition
or complaint shall not have been dismissed within sixty (60) days of the filing
thereof; or an order, order for relief, judgment or decree shall be entered by
any court of competent jurisdiction or other competent authority approving or
ordering any of the foregoing actions.
7.2. Remedies. Without in any way limiting the right of
Bank to demand payment of any portion of the Obligations payable on demand in
accordance with this Agreement or any of the other Loan Documents, upon or at
any time after the occurrence of and during the continuation of, an Event of
Default, all of the Obligations then outstanding (whether under this Agreement,
any of the other Loan Documents or otherwise) shall, at the option of Bank and
without notice or demand by Bank, become at once due and payable and Company
shall forthwith pay to Bank, in addition to any and all sums and charges due,
the entire principal of and interest accrued on the Obligations plus actual and
reasonable attorneys' fees, if the same are collected by or through an attorney
at law. From and after the date of such acceleration of the maturity of the
Obligations, the unpaid principal amount of the Obligations shall bear interest
at the Default Rate until paid in full. Furthermore, upon the occurrence of an
Event of Default and at any time thereafter, the Bank may (A) pursuant to
Section 902 of the Indenture, advise the Trustee that an Event of Default has
occurred and instruct the Trustee to declare the principal of all Bonds then
outstanding and interest thereon to be immediately due and payable, and (B)
proceed hereunder, and under any of the Loan Documents and, to the extent
therein provided, under the Bond Documents, in such order as it may elect and
the Bank shall have no obligation to proceed against any Person or exhaust any
other remedy or remedies which it may have and without resorting to any other
security, whether held by or available to the Bank.
Bank may declare any or all Obligations to be immediately due
and payable (if not earlier demanded), bring suit against Company to collect
the Obligations, exercise any remedy available to Bank hereunder or at law and
take any action or exercise any remedy provided herein or in any other Loan
Document or under applicable law. No remedy shall be exclusive of other
remedies or impair the right of Bank to exercise any other remedies.
7.3. Deposits; Insurance. After the occurrence of and
during the continuation of, an Event of Default, Company authorizes Bank to
collect and apply against the Obligations when due any cash or deposit accounts
in its possession, and irrevocably appoints Bank as its attorney-in-fact to
endorse any check or draft or take other action necessary to obtain such funds.
8. MISCELLANEOUS.
8.1. No Waiver, Remedies Cumulative. No failure on the
part of Bank to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document or
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Bond Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and are in addition to any other remedies provided by law, any Loan
Document, any Bond Document or otherwise.
8.2. Survival of Representations. All representations and
warranties made herein shall survive the issuance of the Letter of Credit, and
shall continue in full force and effect so long as any Obligations is
outstanding, there exists any commitment by Bank to Company, and until this
Agreement is formally terminated in writing.
8.3. Indemnification. The Company hereby indemnifies and
holds the Bank harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses whatsoever which the Bank may incur (or which
may be claimed against the Bank by any Person): (i) by reason of or in
connection with the execution and delivery or transfer of, or payment or
failure to pay under, the Letter of Credit, provided that the Company shall not
be required to indemnify the Bank for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (A) the
willful misconduct or gross negligence of the Bank in connection with paying
drafts presented under the Letter of Credit or (B) the Bank's willful or
negligent failure to pay under the Letter of Credit (other than in connection
with a court order) after the presentation to it by the Credit Facility Trustee
or a successor corporate fiduciary under the Indenture of a sight draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit; or (ii) by reason of or in connection with the execution, delivery or
performance of any of the Bond Documents or Loan Documents or any transaction
contemplated by any thereof. Anything herein to the contrary notwithstanding,
nothing in this Section 8.3 is intended or shall be construed to limit the
Company's reimbursement obligation contained in Article III hereof. Without
prejudice to the survival of any other obligation of the Company, the
indemnities and obligations of the Company contained in this Section 8.3 shall
survive the payment in full of amounts payable pursuant to Article III and the
Termination Date. Company's obligation for indemnification for all of the
foregoing losses, damages, liabilities, obligations, penalties, fees, costs and
expenses of Bank shall be part of the Obligations, chargeable against Company's
loan account, and shall survive termination of this Agreement.
8.4. Transfer of Letter of Credit. The Letter of Credit
may be transferred and assigned in accordance with the terms of the Letter of
Credit.
8.5. Reduction of Letter of Credit. The Letter of Credit
is subject to reduction pursuant to its terms. If the amount available to be
drawn under the Letter of Credit shall be permanently reduced in accordance
with the terms thereof, then the Bank shall have the right to require the
Trustee to surrender the Letter of Credit to the Bank and to issue on such
date, in substitution for such outstanding Letter of Credit, a substitute
irrevocable letter of credit, substantially in the form of the Letter of Credit
but with such changes therein as shall be appropriate to give effect to such
reduction, dated such date, for the amount to which the amount available to be
drawn under the Letter of Credit shall have been reduced.
8.6. Liability of the Bank. The Company, to the extent
permitted by applicable law, assumes all risks of the acts or omissions of the
Trustee and any beneficiary or transferee of
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the Letter of Credit with respect to its use of the Letter of Credit. Neither
the Bank nor any of its officers, directors, employees, agents or consultants
shall be liable or responsible for:
(a) the use which may be made of the Letter of Credit or
for any acts or omissions of the Trustee or any beneficiary or transferee in
connection therewith;
(b) the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged;
(c) payment by the Bank against presentation of
documents which do not comply with the terms of the Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or
(d) any other circumstances whatsoever in any way
related to the making or failure to make payment under the Letter of Credit;
except only that the Company shall have a claim against the Bank, and the Bank
shall be liable to the Company, to the extent but only to the extent, of any
direct, as opposed to consequential damages suffered by the Company which the
Company proves were caused by (i) willful misconduct or gross negligence of the
Bank in determining whether documents presented under the Letter of Credit
complied with the terms of the Letter of Credit or (ii) willful failure of the
Bank to pay under the Letter of Credit after the presentation to it by the
Trustee or a successor trustee or credit facility trustee under the Indenture
of a sight draft and certificate strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
8.7. Notices. Any notice or other communication hereunder
to any party hereto or thereto shall be by hand delivery, overnight delivery,
facsimile, telegram, telex or registered or certified mail and unless otherwise
provided herein shall be deemed to have been given or made when delivered,
telegraphed, telexed, faxed or three (3) Business Days after having been
deposited in the mails, postage prepaid, addressed to the party at its address
specified below (or at any other address that the party may hereafter specify
to the other parties in writing):
Bank: FIRST UNION NATIONAL BANK
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Portfolio Management
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and for Letter of Credit drawings
First Union National Bank
8739 Research Drive-URP4
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: International Trade Operations
Company: Xxxxx Rents, Inc.
000 X. Xxxxx Xxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Executive Vice President and CFO
8.8. Governing Law. This Agreement and the Loan Documents
shall be deemed contracts made under the laws of the State of Georgia and shall
be governed by and construed in accordance with the laws of said state
(excluding its conflict of laws provisions if such provisions would require
application of the laws of another jurisdiction). The Company hereby
acknowledges that the Letter of Credit shall be governed by and construed in
accordance with the International Standby Practices (1998) of the Institute of
International Banking Law and Practice, International Chamber of Commerce
Publication No. 590.
8.9. Indirect Means. Any act which the Company is
prohibited from doing shall not be done indirectly through a subsidiary or by
any other indirect means.
8.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of Company and Bank, and their
respective successors and assigns; provided, that Company may not assign any of
its rights hereunder without the prior written consent of Bank, and any such
assignment made without such consent will be void.
8.11. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which when taken together shall constitute but one and the
same instrument.
8.12. No Usury. Regardless of any other provision of this
Agreement, the Bond Documents or in any other Loan Document, if for any reason
the effective interest should exceed the maximum lawful interest, the effective
interest shall be deemed reduced to, and shall be, such maximum lawful
interest, and (i) the amount which would be excessive interest shall be deemed
applied to the reduction of the principal balance of the Company's obligations
hereunder and under the Bond Documents and Loan Documents and not to the
payment of interest, and (ii) if the Company's obligations hereunder and under
the Bond Documents and Loan Documents have been or is thereby paid in full, the
excess shall be returned to the party paying same, such application to the
principal balance of such obligations or the refunding of excess to be a
complete settlement and acquittance thereof.
8.13. Powers. All powers of attorney granted to Bank are
coupled with an interest and are irrevocable.
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8.14. Approvals. If this Agreement calls for the approval
or consent of Bank, such approval or consent may be given or withheld in the
discretion of Bank unless otherwise specified herein.
8.15. Binding Arbitration; Preservation of Remedies.
(a) Binding Arbitration. Upon demand of any party
hereto, whether made before or after institution of any judicial proceeding,
any claim or controversy arising out of, or relating to the Loan Documents
between the parties (a "Dispute") shall be resolved by binding arbitration
conducted under and governed by the Commercial Financial Disputes Arbitration
Rules (the "Arbitration Rules") of the American Arbitration Association (the
"AAA") and the Federal Arbitration Act. Disputes may include, without
limitation, tort claims, counterclaims, disputes as to whether a matter is
subject to arbitration, claims brought as class actions, or claims arising from
documents executed in the future. A judgment upon the award may be entered in
any court having jurisdiction. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to swap agreements.
(b) Special Rules. All arbitration hearings shall be
conducted in the city in which the office of Bank first stated above is
located. A hearing shall begin within 90 days of demand for arbitration and all
hearings shall be concluded within 120 days of demand for arbitration. These
time limitations may not be extended unless a party shows cause for extension
and then for no more than a total of 60 days. The expedited procedures set
forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. Arbitrators shall be licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA. The parties do
not waive applicable Federal or state substantive law except as provided
herein.
(c) Preservation and Limitation of Remedies.
Notwithstanding the preceding binding arbitration provisions, the parties agree
to preserve, without diminution, certain remedies that any party may exercise
before or after an arbitration proceeding is brought. The parties shall have
the right to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable: (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale or under applicable law by judicial foreclosure including a
proceeding to confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and filing an involuntary bankruptcy proceeding; and
(iv) when applicable, a judgment by confession of judgment. Any claim or
controversy with regard to the parties' entitlement to such remedies is a
Dispute.
(d) No Punitive Damages. Each party agrees that it shall
not have a remedy of punitive or exemplary damages against the other in any
Dispute and hereby waives any right or claim to punitive or exemplary damages
it may have now or which may arise in the future in connection with any
Dispute, whether the Dispute is resolved by arbitration or judicially.
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(e) Waiver of Jury Trial. The parties acknowledge that
by agreeing to binding arbitration they have irrevocably waived any right they
may have to a jury trial with regard to a Dispute.
8.16. Participations. Bank shall have the right to enter
into one or more participation with other lenders with respect to the
Obligations. Upon prior notice to Company of such participation, Company shall
thereafter furnish to such participant any information furnished by Company to
Bank pursuant to the terms of the Loan Documents. Nothing in this Agreement or
any other Loan Document shall prohibit Bank from pledging or assigning this
Agreement and Bank's rights under any of the other Loan Documents, including
collateral therefor, to any Federal Reserve Bank in accordance with applicable
law.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
BANK:
FIRST UNION NATIONAL BANK
By:
----------------------------------------
Title:
-------------------------------------
COMPANY:
XXXXX RENTS, INC.
By:
----------------------------------------
Name:
Title:
[SEAL]
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SCHEDULE OF EXHIBITS
Exhibit Section Reference Title
------- ----------------- -----
A 2.1 ("Letter of Credit") Form of Letter of Credit
23
TABLE OF CONTENTS
Page
----
1. Definitions..........................................................................................1
2. The Letter of Credit Facility........................................................................4
2.1. Letter of Credit.....................................................................................4
2.2. Reimbursement and Other Payments.....................................................................4
2.3. Tender Advances......................................................................................5
2.4. Letter of Credit Commission and Fees.................................................................6
2.5. Overdue Amounts......................................................................................6
2.6. Computation..........................................................................................6
2.7. Payment Procedure....................................................................................7
2.8. Business Days........................................................................................7
2.9. Extension of Stated Expiration Date..................................................................7
2.10. Statement of Account.................................................................................7
2.11. Increased Costs; Reduced Returns.....................................................................7
2.12. Obligations Absolute.................................................................................8
3. Conditions Precedent to Issuance; Disbursement of Bond Proceeds; Change of Interest Rate Modes.......9
3.1. Conditions Precedent to Initial Advance..............................................................9
3.2. Conditions Precedent to Each Tender Advance.........................................................10
3.3. Changes in Interest Rate Modes......................................................................10
4. Representations and Warranties......................................................................10
4.1. Valid Existence and Power...........................................................................10
4.2. Authority...........................................................................................11
4.3. Financial Condition.................................................................................11
4.4. Litigation..........................................................................................11
4.5. Agreements, Etc.....................................................................................11
4.6. Authorizations......................................................................................11
4.7. Investment Company Act..............................................................................12
4.8. Insider 12
4.9. Full Disclosure.....................................................................................12
5. Affirmative Covenants of Company....................................................................12
5.1. Incorporation of Affirmative Covenants of Credit Agreement..........................................12
5.2. Use of Letter of Credit............................................................................12
5.3. Maintenance of Business and Properties..............................................................12
5.4. Notice of Default...................................................................................13
6. Negative Covenants of Company.......................................................................13
7. Default.............................................................................................13
7.1. Events of Default...................................................................................13
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7.2. Remedies 14
7.3. Deposits; Insurance.................................................................................15
8. Miscellaneous.......................................................................................15
8.1. No Waiver, Remedies Cumulative......................................................................15
8.2. Survival of Representations.........................................................................15
8.3. Indemnification.....................................................................................15
8.4. Transfer of Letter of Credit........................................................................16
8.5. Reduction of Letter of Credit.......................................................................16
8.6. Liability of the Bank...............................................................................16
8.7. Notices 17
8.8. Governing Law.......................................................................................17
8.9. Indirect Means......................................................................................18
8.10. Successors and Assigns..............................................................................18
8.11. Counterparts........................................................................................18
8.12. No Usury 18
8.13. Powers 18
8.14. Approvals...........................................................................................18
8.15. Binding Arbitration; Preservation of Remedies.......................................................18
8.16. Participations......................................................................................19
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