THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment, dated as of November 27, 1996, is made
by and among CAPITAL ASSOCIATES INTERNATIONAL, INC., a Colorado corporation (the
"Borrower") and each of the financial institutions appearing on the signature
pages hereof (herein collectively called the "Lenders" and individually each
called a "Lender") and NORWEST BANK COLORADO, NATIONAL ASSOCIATION, a national
banking association, in its separate capacity as agent for the Lenders (in such
capacity, the "Agent") and NORWEST EQUIPMENT FINANCE, INC., a Minnesota
corporation, in its separate capacity as collateral agent for the Lenders (in
such capacity, the "Collateral Agent").
RECITALS
A. Norwest Bank Colorado, National Association (in its capacity as
Lender hereunder "Norwest Colorado"), Norwest Equipment Finance, Inc. (in its
capacity as Lender hereunder, "NEFI") First Interstate Bank of Denver, N.A., now
known as Xxxxx Fargo Bank (Colorado), N.A. ("Xxxxx Fargo"), First National Bank
of Boston ("First Boston") and The Sumitomo Bank, Limited ("Sumitomo") the
Agent, the Collateral Agent and the Borrower have entered into a Credit and
Security Agreement dated as of November 30, 1994, as amended by a First
Amendment to Credit Agreement and Notes dated November 30, 1995, an Assumption
Certificate dated February 28, 1995 and a Second Amendment to Credit Agreement
and Notes dated January 31, 1996 ( as amended, the "Credit Agreement").
Capitalized terms used in these Recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.
B. Pursuant to the Credit Agreement, the Borrower executed and
delivered the following promissory notes: (i) a Working Capital Note dated
February 28, 1995 in the original principal amount of $1,500,000 payable to the
order of Norwest Colorado, (ii) a Warehousing Note dated February 28, 1995 in
the original principal amount of $4,050,000 payable to the order of Norwest
Colorado, (iii) a Term Note dated February 28, 1995 in the original principal
amount of $1,841,666.67 payable to the order of Norwest Colorado, (iv) a
Warehousing Note dated February 28, 1995 in the original principal amount of
$5,550,000 payable to the order of NEFI, (v) a Term Note dated February 28, 1995
in the original principal amount of $1,841,666.67 payable to the order of NEFI,
(vi) a Working Capital Note dated February 28, 1995 in the original principal
amount of $1,500,000 payable to the order of Xxxxx Fargo, (vii) a Warehousing
Note dated February 28, 1995 in the original principal amount of $9,600,000
payable to the order of Xxxxx Fargo, (viii) a Term Note in the original
principal amount of $3,683,333.33 payable to the order of Xxxxx Fargo, (ix) a
Working Capital Note dated February 28, 1996 in the original principal amount of
$1,000,000 payable to the order of Sumitomo, (x) a Warehousing Note dated
February 28, 1996 in the original principal amount of $6,400,000 payable to the
order of Sumitomo, (xi) a Term Note dated February 28, 1996 in the original
principal amount of $2,455,555.56 payable to the order of Sumitomo, (xii) a
Working Capital Note dated February 28, 1995 in the original principal amount of
$1,000,000 payable to the order of First Boston, (xiii) a Warehousing Note dated
February 28, 1995 in the original principal amount of $6,400,000 payable to the
order of First Boston and (xiv) a Term Note dated February 28, 1995 in the
original principal amount of $2,455,555.56 payable to the order of First Boston
(collectively, the "Prior Notes").
C. The Borrower has requested, among other things, that Xxxxx Fargo be
released from its obligations and commitments arising under the Credit Agreement
and that the commitments of Norwest Colorado, NEFI, First Boston and Sumitomo
(herein the "Continuing Lenders") be increased, and that new advances be made
under such increased Commitments, so as to satisfy and pay in full all
obligations of the Borrower to Xxxxx Fargo, and that certain other amendments be
made to the Credit Agreement. The Lenders are willing to accommodate the
Borrower's requests, pursuant to the terms and conditions set forth in this
Third Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, it is agreed as follows:
1. DEFINED TERMS. Unless otherwise defined herein, capitalized
terms used in this Third Amendment which are defined in the Credit Agreement
shall have the same meanings given to them in the Credit Agreement.
2. Amendment of Credit Agreement Definitions.
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(a) Section 1.1 of the Credit Agreement is amended to replace or
add, as the case may be, the following definitions:
"Borrowing Base" means, the lessor of (a) the Warehousing
Commitment Amount, or (b) the sum of (i) ninety-seven and
one half percent (97.50%) of the Lease Value of Eligible
Warehousing Leases and (ii) ninety percent (90%) of the
Lease Value of Installment Purchase Warehousing Leases.
"CAI V" means CAI Equipment Leasing V Corp., a wholly owned
subsidiary of the Parent.
"Commitment Termination Date" means the earliest of (i)
November 30, 1997 or (ii) the date on which the Working
Capital Commitments and the Warehousing Commitments are
terminated in full or reduced to zero pursuant to SECTION
5.2(a).
"Floating Rate Warehousing Advances" means any Warehousing
Advance which bears interest at a rate determined by
reference to the Warehousing Floating Rate.
"Guarantors" means the Parent, CAI Equipment Leasing I
Corp., CAI Equipment Leasing III Corp., CAI Equipment
Leasing IV Corp., CAI Partners Management Company, Capital
Equipment Corporation, CAI Equipment Leasing V Corp. and CAI
Lease Securitization I Corp.
"Installment Purchase Warehousing Leases" means, a
Warehousing Lease which would constitute an Eligible
Warehousing Lease but for the fact that the Related
Equipment has not yet been delivered to the Lessee and the
Lessee has not yet executed and delivered to the Borrower an
appropriate acceptance certificate with respect to such
Related Equipment, except that in no event shall any of the
following be deemed an Installment Purchase Warehousing
Lease:
i) A Warehousing Lease with respect to which the
Borrower has not entered into an enforceable interim
funding agreement (in form and content acceptable to the
Agent) pursuant to which the Lessee has irrevocably
committed and agreed to compensate the Borrower for the
Borrower's costs incurred (including imputed interest)
to make payments on account of Related Equipment prior
to the Lease commencement date and to pay to the
Borrower the Lease Value of such Warehousing Lease if
the Related Equipment is not delivered on or prior to
120 days after the date of such agreement;
(ii) A Warehousing Lease with respect to which the
Agent, in its sole discretion, has not approved the
manufacturer of the Related Equipment;
(iii) A Warehousing Lease with respect to which the
Lessee is not a "1" or "2" rated credit;
(iv) A Warehousing Lease that has not been converted to
an Eligible Warehousing Lease within 120 days after the
date on which it became an Installment Payment
Warehousing Lease for purposes of the Borrowing Base;
and
(v) A Warehousing Lease if the total Lease Value of all
Installment Payment Warehousing Leases, in the aggregate
including such Warehousing Lease, exceeds $5 million.
"Interest Period" means, relative to any LIBO Term Loan or
LIBO Advance, the period beginning on (and including) the date
on which such LIBO Term Loan or LIBO Advance is made or
continued as, or converted into, a LIBO Term Loan pursuant to
the applicable provisions of ARTICLE II or a LIBO Advance
pursuant to the applicable provisions of ARTICLE IV and shall
end on (but exclude) the day which numerically corresponds to
such date one (1), two (2) or three (3) months thereafter (or
if such month has no numerically corresponding day, on the
last Business Day of such month), as the Borrower may select
in its relevant notice; provided, however, that:
(i) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time with
respect to a Facility which have expiration dates
occurring on more than three (3) different dates;
(ii) if an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall
end on the next following Business Day; and
(iii) no Interest Period may end later than the
Commitment Termination Date.
"LIBO Advance" means any portion of a Warehousing Advance
which bears interest at a rate determined by reference to the
LIBO Rate.
"LIBO Rate" means the annual rate equal to the sum of (i) the
rate obtained by dividing (a) the rate (rounded up to the
nearest 1/16th of one percent) determined by the Agent to be
the average rate at which U.S. dollar deposits are offered to
the Agent by major banks in the London interbank eurodollar
market for funds to be made available on the first day of any
Interest Period in an amount approximately equal to the
Agent's portion of the amount for which a LIBO Rate quotation
has been requested and maturing at the end of such Interest
Period, by (b) a percentage equal to 100% minus the Federal
Reserve System reserve requirement (expressed as a percentage)
applicable to such deposits and (ii) (A) with respect to the
Warehousing Facility, two and three quarters percent (2.75%)
and (B) with respect to the Term Facility, three percent
(3.00%).
"Parent Demand Notes" means those certain demand notes payable
by the Parent to certain Subsidiaries of the Parent, as
described and identified in SCHEDULE 10.0, together with those
certain demand notes payable by the Parent (i) to CAI V in a
principal amount not to exceed $1,250,000 and (ii) to CAI-UBK
Equipment Corp.
in a principal amount not to exceed $50,000.
"Residual Value" means, with respect to Related Equipment,
Residual Equipment or Residual Equipment Interests, the lesser
of (i) the Borrower's booked Residual Value of the Borrower's
interest in such Equipment as of the scheduled expiration date
of the Lease to which such Equipment is subject or (ii) forty
percent (40%) of the original cost of such Equipment.
"Term Loan Commitment Amount" means Four Million Six Hundred
Ninety-Four Thousand Four Hundred Forty-Four Dollars
($4,694,444), being the maximum aggregate amount of the Term
Loan Commitments of all Lenders, subject to reduction in
accordance with SECTION 5.2(a).
"Third Amendment to Credit Agreement" means the Third
Amendment to Credit Agreement dated as of November 27, 1996,
by and among the Lenders, the Borrower and the Agent."
"Warehousing Commitment Amount"' means Twenty-Two Million
Eight Hundred Five Thousand Five Hundred Fifty-Six Dollars
($22,805,556), being the maximum aggregate amount of the
Warehousing Commitments of all Lenders, subject to reduction
in accordance with Section 5.2(a).
"Working Capital Commitment Amount" means Seven Million Five
Hundred Thousand Dollars ($7,500,000), being the maximum
aggregate amount of the Working Capital Commitments of all
Lenders, subject to reduction in accordance with SECTION
5.2(a).
(b) Section 1.1 of the Credit Agreement is further amended by
modifying certain definitions as provided below:
(i) The definition of "Eligible Lease" is amended by
deleting clause (ix) thereof in its entirety and substituting in
place thereof the following:
"(ix-A) a Lease with a Lessee that is a credit rated
"4" or higher, under the Borrower's credit approval
standards (as described in SECTION 6.5),
(ix-B) a Lease with a Lessee that is a "1" or "2" rated
credit if the total unpaid amount due under all Leases with
such Lessee, in the aggregate including such Lease, exceeds
$10,000,000;
(ix-C) a Lease with a Lessee that is a "3" rated credit
if the total unpaid amount due under all Leases with such
Lessee, in the aggregate including such Lease, exceeds (A)
$3,000,000 or (B) $5,000,000 if Borrower has obtained from a
creditworthy Person a commitment to purchase or provide
Non-Recourse Debt to finance within sixty (60) days all such
Leases in excess of $3,000,000 (and such Leases are, in
fact, purchased or financed by such Person as provided in
such commitment); and"
(ii) The definition of "Eligible Lease" is further amended
by adding new clauses (xi) and (xii) at the end thereof which
read as follows:
"(xi) a Lease covering Related Equipment with respect
to which the Borrower's booked Residual Value exceeds
forty-five percent (45%); and
(xii) a Lease covering Related Equipment which, in the
aggregate, was purchased by the Borrower for an initial
purchase price of less than $25,000."
(iii) The definition of "Eligible Other Investment Asset" is
hereby amended by deleting in its entirety clause (a) thereof.
(iv) The definition of "Lease Value" is hereby amended by
adding the following to the end thereof:
"PROVIDED, HOWEVER, that with respect to any Lease
which is an Installment Purchase Warehousing Lease, the
Lease Value shall equal the aggregate unreimbursed amount
paid by the Borrower to the manufacturer of the Related
Equipment in contemplation of the production and delivery of
such Related Equipment to the Lessee under such Installment
Purchase Warehousing Lease."
3. ADJUSTMENT OF COMMITMENTS AND PERCENTAGES; RELEASE OF XXXXX
FARGO. Xxxxx Fargo has indicated its desire to be taken out of its Commitments
by the Continuing Lenders and to be relieved of any further obligations
thereunder, and the Continuing Lenders have agreed to accommodate that desire,
subject to the terms and conditions set forth below:
(a) The effective date on which the Continuing Lenders shall
assume the outstanding Commitments and Advances of Xxxxx Fargo is
December 2, 1996 (the "Effective Date"), subject to compliance with
the terms and conditions of this Third Amendment.
(b) On the Effective Date, the respective Commitments and
Percentages of each Continuing Lender shall be adjusted in accordance
with the Commitments and Percentages set forth on the signature page
hereof opposite such Continuing Lender's name.
(c) On the Effective Date, Xxxxx Fargo will assign to each
Continuing Lender a portion of Xxxxx Fargo's outstanding Term Loans,
Working Capital Advances and Warehousing Advances, pro rata as between
Floating Rate Term Loans and each tenor or LIBO Term Loans, in an
amount equal to the product of (i) each Continuing Lender's Percentage
(as set forth and described in this Third Amendment) and (ii) the
outstanding balance of each Type of Xxxxx Fargo's outstanding Term
Loans and Advances, and each Continuing Lender shall purchase such
Term Loans and Advances from Xxxxx Fargo. Thereafter, all Term Loans
and Advances so purchased by a Continuing Lender shall be evidenced by
the Borrower's Replacement Notes issued to such Continuing Lender, as
contemplated below. All such purchases by a Continuing Lender from
Xxxxx Fargo shall be deemed without recourse or warranty.
(d) From and after the Effective Date, the Agent shall collect
and apply all accrued interest and fees payable in respect of Xxxxx
Fargo's Commitments and Advances in accordance with the Credit
Agreement for the period prior to the Effective Date for the benefit
and account of Xxxxx Fargo. Each Continuing Lender shall be entitled
to receive interest and fees in respect of its Commitments, Advances
and Term Loans so purchased from Xxxxx Fargo from and after the
Effective Date.
(e) On the Effective Date, the Commitments of Xxxxx Fargo shall
be deemed canceled and terminated, all right, title, claim and
interest of Xxxxx Fargo in to and under the Credit Agreement or
otherwise under any Loan Documents executed in connection therewith
shall terminate and Xxxxx Fargo shall be deemed released from any
further obligations and agreements thereunder.
4. DELIVERY OF REPLACEMENT NOTES. Concurrently with execution and
delivery of this Third Amendment, the Borrower shall issue and deliver to the
Agent new Replacement Notes dated as of the Effective Date payable to the order
of each Continuing Lender in the stated principal amount of such Continuing
Lender's Term Loan Commitment, Working Capital Commitment and Warehousing
Commitment, respectively (herein the "Replacement Notes"). The Replacement Notes
shall be issued in replacement for, but not in payment of, the Prior Notes held
by such Continuing Lender, and upon issuance and delivery of the Replacement
Notes, the Prior Notes shall have no further force or effect and shall be
returned to the Borrower marked "Replaced." The Agent agrees to deliver
Replacement Notes to the appropriate Continuing Lender promptly upon receipt
thereof by the Agent.
5. REFERENCES TO XXXXX FARGO AS LENDER INEFFECTIVE. From and
after the Effective Date, the term "Lenders" as used in the Credit Agreement
shall be deemed to include only the Continuing Lenders, and Xxxxx Fargo shall no
longer be deemed a party to the Credit Agreement or entitled to any benefits
thereunder.
6. LIBO RATE OPTION FOR WAREHOUSING ADVANCES. The Borrower has
requested that, at the Borrower's election, the Borrower be permitted to select
LIBO Rates for outstanding indebtedness evidenced by Warehousing Notes. To
accommodate that request, Article IV of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
Section 4.1 COMMITMENTS. Each Lender hereby agrees, severally but
not jointly, on the terms and subject to the conditions herein set
forth, to make Warehousing Advances to the Borrower from time to time
during the period from the date hereof to and including the Commitment
Termination Date, or the earlier date of termination in whole of the
Warehousing Commitments pursuant to SECTIONS 5.2 or 11.2, in an amount
not to exceed such Lender's Percentage of each Warehousing Borrowing
from time to time requested by the Borrower; PROVIDED, HOWEVER, that
(i) the aggregate amount of Warehousing Advances which any Lender
shall be committed to have outstanding hereunder shall not exceed such
Lender's Warehousing Commitment or such Lender's Percentage of the
Warehousing Borrowing Base and (ii) the aggregate amount of
Warehousing Advances which all Lenders shall be committed to have
outstanding hereunder shall not exceed the Borrowing Base. Within the
above limits, the Borrower may borrow, prepay in accordance with the
terms hereof and reborrow in accordance with this ARTICLE IV.
Section 4.2 VARIOUS TYPES OF FUNDINGs. The Warehousing Advances
shall be funded by the Lenders as either Floating Rate Warehousing
Advances or LIBO Advances (each being herein called a "Type" of
Warehousing Advance), as the Borrower shall specify pursuant to
SECTION 4.3, 4.4 or 4.5. Floating Rate Warehousing Advances and LIBO
Advances may be outstanding at the same time. It is understood,
however, that in the case of LIBO Advances, not more than three (3)
different Interest Periods shall be outstanding at any one time, and
the aggregate principal amount of Warehousing Advances subject to a
specified Interest Period shall be in an amount equal to $1,000,000 or
a higher integral multiple of $100,000.
Section 4.3 PROCEDURES FOR BORROWING. Borrowings under the
Warehousing Facility shall occur on Wednesday of each week, provided
the Borrower shall have given notice to both Agents of a proposed
Warehousing Borrowing not later than 12:00 Noon, Denver, Colorado
time, on a Business Day that is at least two (2) Business Days prior
to the proposed date of funding for Floating Rate Warehousing Advances
and at least three (3) Business Days prior to the proposed date of
funding for LIBO Advances. Each such notice shall be effective upon
receipt by the Agents and shall be in writing or by telecopy
transmission (in either case, in the form of EXHIBIT 1 to the Third
Amendment), shall specify whether the Warehousing Advances are to bear
interest at a Warehousing Floating Rate or at one or more LIBO Rates,
and in the case of a Borrowing that is to bear interest at one or more
LIBO Rates, shall specify the Interest Period or Interest Periods to
be applicable thereto, and shall be
accompanied by a properly completed and duly executed Borrowing Base
Certificate. In order to be included in a Borrowing Base Certificate
provided to the Agents with respect to a Warehousing Borrowing, the
original of each Warehousing Lease therein described must be delivered
to the Collateral Agent at its Administrative Address not later than
12:00 Noon, Denver, Colorado time, on a Business Day that is at least
two (2) Business Days prior to the proposed date of such Warehousing
Borrowing. Subject to the additional limitations set forth in SECTION
4.2 for LIBO Advances, the aggregate principal amount of each
Warehousing Borrowing shall be in an amount not less than $500,000.
Promptly upon receipt of a notice under this SECTION 4.3 the Agent
shall advise each Lender of the proposed Borrowing and the proposed
interest rates to be in effect with respect thereto and the applicable
Interest Period. At or before 12:00 Noon, Denver, Colorado time, on the
requested Warehousing Borrowing date, each Lender shall provide the
Agent at the principal office of the Agent in Denver, Colorado with
immediately available funds covering such Lender's Percentage of such
Warehousing Borrowing, and subject to the satisfaction of the
conditions precedent set forth in ARTICLE VII with respect to such
Warehousing Borrowing, the Agent shall deposit to the Borrower's
account maintained with the Agent proceeds of the Warehousing
Borrowing.
Section 4.4 CONVERTING FLOATING RATE WAREHOUSING ADVANCES TO LIBO
ADVANCES; PROCEDURES. So long as no Default or Event of Default shall
exist, the Borrower may convert all or any part of any outstanding
Floating Rate Warehousing Advance into one or more LIBO Advances by
giving notice to the Agent of such conversion not later than 2:00
p.m., Denver, Colorado time, on a Business Day which is at least three
(3) Business Days prior to the date of the requested conversion. Each
such notice shall be effective upon receipt by the Agent, shall be in
writing or by telecopy transmission (in the form of EXHIBIT 2 to the
Third Amendment), shall specify the date and amount of such
conversion, the total amount of Warehousing Advances to be so
converted and the Interest Period or Interest Periods therefor.
Promptly upon receipt of such notice, the Agent shall advise each
Lender thereof. Each conversion of Warehousing Advances shall apply
pro rata to all Floating Rate Warehousing Advances held by the
Lenders, shall commence on a Business Day, and the aggregate amount of
each such conversion of Floating Rate Warehousing Advances to LIBO
Advances shall be in an amount equal to $1,000,000 or a higher
integral multiple of $100,000.
Section 4.5 PROCEDURES AT END OF AN INTEREST PERIOD. Unless the
Borrower requests a new LIBO Rate in accordance with the procedures
set forth below, each Lender shall automatically and without request
by the Borrower, convert each LIBO Advance to a Floating Rate
Warehousing Advance on the last day of the relevant Interest Period.
So long as no Default or Event of Default shall exist, the Borrower
may cause all or any part of any outstanding LIBO Advance to continue
to bear interest at a LIBO Rate after the end of the applicable
Interest Period by notifying the Agent no later than 2:00 p.m.,
Denver, Colorado time, on a Business Day which is at least three (3)
Business Days prior to the first day of the new Interest Period. Each
such notice shall be in writing or by telecopy transmission (in the
form of EXHIBIT 3 to the Third Amendment), shall be effective when
received by the Agent, and shall specify the first day of the
applicable Interest Period, the amount of the expiring LIBO Advance to
be continued and the Interest Period therefor. Promptly upon receipt
of such notice, the Agent shall advise each Lender thereof. Each new
Interest Period shall begin on a Business Day and the aggregate amount
of the Warehousing Advances bearing the new LIBO Rate shall be in an
amount equal to $1,000,000 or a higher integral multiple of $100,000.
Section 4.6 SETTING AND NOTICE OF RATES. The applicable LIBO Rate
for each Interest Period shall be determined by the Agent and notice
thereof (which may be by telephone) shall be given by the Agent to the
Borrower and each Lender. Each such determination of the applicable
LIBO Rate shall be conclusive and binding upon the parties hereto, in
the absence of demonstrable error. The Agent, upon written request of
the Borrower or any Lender, shall deliver to the Borrower or such
Lender a statement showing the computations used by the Agent in
determining the applicable LIBO Rate hereunder.
Section 4.7 PRO RATA TREATMENT. All Warehousing Advances,
conversions and repayments shall be effected so that after giving
effect thereto all Types of Warehousing Advances outstanding and all
applicable Interest Periods shall be pro rata among the Lenders
according to their respective Percentages.
Section 4.8 INTEREST ON WAREHOUSING ADVANCES. The Borrower hereby
agrees to pay interest on the unpaid principal amount of each
Warehousing Advance for the period commencing on the date such
Warehousing Advance is funded by a Lender until such Warehousing
Advance is paid in full, in accordance with the following:
(a) FLOATING RATE WAREHOUSING ADVANCES. Subject to SECTION
4.8(c), while any portion of a Warehousing Advance is a Floating
Rate Warehousing Advance, the outstanding principal balance
thereof shall bear interest at an annual rate at all times equal
to the Warehousing Advance Floating Rate.
(b) LIBO RATE ADVANCES. Subject to SECTION 4.8(c), while any
portion of a Warehousing Advance is a LIBO Advance, the
outstanding principal balance thereof shall bear interest for the
applicable Interest Period at an annual rate equal to the LIBO
Rate established with respect to such LIBO Advance in accordance
with SECTION 4.3, 4.4 or 4.5 hereof.
(c) DEFAULT RATE. From and after the occurrence of an Event
of Default and continuing thereafter until such Event of Default
shall be remedied to the written satisfaction of the Required
Lenders, the outstanding principal balance of each Warehousing
Advance shall bear interest, until paid in full, at a rate equal
to (i) the interest rate otherwise in effect with respect to such
Warehousing Advance and (ii) four percent (4%).
Section 4.9. OBLIGATION TO REPAY WAREHOUSING ADVANCE;
REPRESENTATIONS. The Borrower shall be obligated to repay all
Warehousing Advances at the applicable interest rates established
under this ARTICLE IV notwithstanding the failure of the Agent to
receive any written request therefor or written confirmation thereof
and notwithstanding the fact that the person requesting the same was
not in fact authorized to do so. Any request for a Warehousing
Borrowing under this ARTICLE IV, whether written, telephonic, telecopy
or otherwise, shall be deemed to be a representation by the Borrower
that the conditions set forth in SECTION 7.2 have been satisfied as of
the time of the request.
Section 4.10 WAREHOUSING NOTES. All Warehousing Advances made by
each Lender shall be evidenced by and repayable with interest in
accordance with a Warehousing Note of the Borrower payable to the
order of such Lender in the amount of such Lender's Warehousing Loan
Commitment. The unpaid principal amount of each Warehousing Note shall
be payable as provided therein and herein and upon demand by the
Lenders pursuant to SECTION 11.2 hereof.
Section 4.11 INTEREST DUE DATES. Accrued interest on each
Warehousing Advance shall be payable in arrears on the last day of
each month and at maturity.
Section 4.12 USE OF PROCEEDS. The proceeds of each Warehousing
Borrowing shall be used by the Borrower for purposes of acquiring or
funding leases for resale or as temporary financing pending the
securing of permanent financing for any such Lease.
Section 4.13 INCREASED COSTS; CAPITAL ADEQUACY; FUNDING
EXCEPTIONS. With respect to all LIBO Advances from time to time
outstanding hereunder, the Borrower hereby covenants and agrees that:
(a) INCREASED COSTS ON LIBO ADVANCES. If Regulation D of the
Board of Governors of the Federal Reserve System, or after the
date of this Agreement, the adoption of any applicable law, rule
or regulation, or any change in any existing law, or any change
in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by any Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank or
comparable agency, shall:
(i) subject any Lender to or cause the withdrawal or
termination of any exemption previously granted any Lender
with respect to, any tax, duty or other charge with respect
to its LIBO Advances or its obligation to make LIBO
Advances, or shall change the basis of taxation of payments
to any Lender of the principal of or interest under this
Agreement in respect of its LIBO Advances or its obligation
to make LIBO Advances (except for changes in the rate of tax
on the overall net income of such Lender imposed by the
jurisdictions in which such Lender's principal executive
office is located); or
(ii) impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the
Board of Governors of the Federal Reserve System, but
excluding any reserve included in the determination of
interest rates pursuant to SECTION), special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender; or
(iii) impose on any Lender any other condition affecting its
making, maintaining or funding of its LIBO Advances or its
obligation to make LIBO Advances;
and the result of any of the foregoing is to increase the
cost to such Lender of making or maintaining any LIBO
Advance, or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or under its
Warehousing Note, then the affected Lender will notify the
Borrower and the Agent and within fifteen (15) days after
demand by such Lender (which demand shall be accompanied by
a statement setting forth the basis of such demand) the
Borrower shall pay directly to such Lender such additional
amount or amounts as will compensate such Lender for such
increased cost or such reduction. Each Lender will promptly
notify the Borrower and the Agent of any event of which it
has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this SECTION
4.13. If the Borrower receives notice from any Lender of any
event which will entitle such Lender to compensation
pursuant to this SECTION 4.13, the Borrower, at its option,
may prepay any then outstanding LIBO Advances or notify the
Agent (which shall promptly notify each Lender) that any
pending request for a LIBO Advances shall be deemed to be a
request for a Floating Rate Warehousing Advance, in each
case without payment of any additional funding losses
pursuant to the provisions of SECTION 4.14.
(b) BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If with respect to any Interest Period:
(i) the Agent determines that deposits in U.S. dollars
(in the applicable amounts), as the case may be, are
not being offered to the Agent in the London interbank
eurodollar market for such Interest Period; or
(ii) the Agent otherwise determines (which
determination shall be binding and conclusive on all
parties) that by reason of circumstances affecting the
London interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the
applicable LIBO Rate; or
(iii) the Required Lenders advise the Agent that the
LIBO Rate as determined by the Agent will not
adequately and fairly reflect the cost to such Lenders
of maintaining or funding a LIBO Advance for such
Interest Period, or that the making or funding of LIBO
Advances has become impracticable as a result of an
event occurring after the date of this Agreement which
in the opinion of such Lenders materially affects such
LIBO Advances,
THEN the Agent shall promptly notify the affected
parties and (A) in the event of any occurrence described in
the foregoing clause (i) the Borrower shall enter into good
faith negotiations with each affected Lender in order to
determine an alternate method to determine the LIBO Rate for
such Lender, and during the pendency of such negotiations
with any Lender, such Lender shall be under no obligation to
make LIBO Advances, and (B) in the event of any occurrence
described in the foregoing clauses (ii) or (iii), for so
long as such circumstances shall continue, no Lender shall
be under any obligation to make LIBO Advances.
(c) ILLEGALITY. In the event that any change in
(including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of
applicable laws or regulations by any governmental
authority, central bank, comparable agency or any other
regulatory body charged with the interpretation,
implementation or administration thereof, or compliance by
any Lender with any request or directive (whether or not
having the force of law) of any such authority, central
bank, comparable agency or other regulatory body, should
make it (or, in the good faith judgment of the applicable
Lender, shall raise a substantial question as to whether it
is unlawful for a Lender (any such Lender herein called an
"Affected Lender") to make, maintain or fund LIBO Advances
then (i) the Affected Lender shall promptly notify each of
the other parties hereto, (ii) the obligation of the
Affected Lender to make, maintain or convert into LIBO
Advances shall, upon the effectiveness of such event, be
suspended for the duration of such unlawfulness, and (iii)
for the duration of such unlawfulness, any notice by the
Borrower pursuant to SECTIONS 4.3, 4.4 or 4.5 requesting
Lenders to make or convert into LIBO Advances shall, as to
the Affected Lender, be construed as a request to make or to
continue making Floating Rate Warehousing Advances in the
amount of such Affected Lender's Percentage of the total
amount of LIBO Advances requested.
Section 4.14 FUNDING LOSSES. With respect to all LIBO
Advances, the Borrower hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement
setting forth the basis for the calculations of the amount
being claimed) the Borrower will indemnify such Lender
against any loss or expense which such Lender may have
sustained or incurred (including, without limitation, any
net loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such
Lender to fund or maintain LIBO Advances), as reasonably
determined by such Lender, (i) as a consequence of any
failure by the Borrower to make any payment when due of any
amount due hereunder in connection with any LIBO Advances,
or (ii) due to any failure of the Borrower to borrow or
convert any LIBO Advances on a date specified therefor in a
notice thereof or (iii) due to any payment or prepayment
(including any prepayment pursuant to SECTIONS 5.2(b) or
5.2(c), but excluding any prepayment pursuant to SECTION
4.13) of any LIBO Advances on a date other than the last day
of the applicable Interest Period for such LIBO Advances.
For this purpose, all notices of LIBO Rate elections
pursuant to this ARTICLE IV shall be deemed to be
irrevocable.
Section 4.15 RIGHT OF LENDERS TO FUND THROUGH OTHER
OFFICES. Each Lender, if it so elects, may fulfill its
Commitment as to any LIBO Advance by causing a foreign
branch or affiliate of such Lender to make such LIBO
Advance; PROVIDED, that in such event the obligation to the
Borrower to repay such LIBO Advance shall nevertheless be to
such Lender and shall be deemed held by such Lender, to the
extent of such LIBO Advance, for the account of such branch
or affiliate.
Section 4.16 DISCRETION OF LENDERS AS TO MANNER OF
FUNDING. Notwithstanding any provision of this Agreement to
the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Warehousing
Advances in any manner it deems fit, it being understood,
however, that for the purposes of this Agreement
(specifically including, without limitation, SECTION 4.14
hereof) all determinations hereunder shall be made as if
such Lender had actually funded and maintained each LIBO
Advance during each Interest Period for such LIBO Advance
through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an
interest rate equal to the appropriate LIBO Rate for such
Interest Period.
Section 4.17 CONCLUSIVENESS OF STATEMENTS; SURVIVAL OF
PROVISIONS. Determinations and statements of any Lender
pursuant to SECTION 4.13 or 4.14 shall be conclusive absent
demonstrable error. Each Lender may use reasonable averaging
and attribution methods in determining compensation pursuant
to such Sections and the provisions of such Sections shall
survive termination of this Agreement.
7. NON-RESIDUAL COLLATERAL COVERAGE RATIO. Section 9.14
of the Credit Agreement, providing for a Non-Residual Collateral Coverage Ratio,
is hereby deleted.
8. EQUIPMENT CLASSIFICATION CONCENTRATION LIMIT.
SECTION 9.15 of the Credit Agreement is hereby amended in its entirety to read
as follows:
"The Borrower will at no time permit the ratio of
(a) the adjusted net book value of any type of
Equipment to (b) the adjusted net book value of all of
the Borrower's Equipment, expressed as a percentage, to
be greater than the applicable percentage set forth
opposite such Equipment type in SCHEDULE 9.15-A
attached to the Third Amendment."
9. INDEBTEDNESS. Subsection (b) of SECTION 10.2, of the
Credit Agreement is hereby amended in its entirety to read as follows:
"(b) Indebtedness evidenced by Parent Demand
Notes and other indebtedness in existence on the
date hereof and listed in SCHEDULE 10.0; and"
10. INVESTMENTS. Subsection (a) of SECTION 10.4 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"(a) investments in Subsidiaries of the
Borrower or the Parent as shown and described
in SCHEDULE 10.0-A attached to the Third Amendment."
11. NO OTHER CHANGES. Except as explicitly amended by
this Third Amendment, all terms and conditions of the Credit Agreement and the
other Loan Documents shall remain in full force and effect. Notwithstanding
anything to the contrary contained herein or in any other instrument executed by
the Borrower, the Guarantors, any Lender, the Agent or the Collateral Agent, the
agreements, covenants and provisions contained herein shall constitute the only
evidence of the Lenders' agreement with respect to modification of any of the
Loan Documents. The Borrower acknowledges and agrees that no express or implied
consent to any additional or further amendments or modifications of any of the
Loan Documents shall be inferred or implied by the execution and delivery of
this Third Amendment. Further, execution of this Third Amendment shall not
constitute a waiver (either express or implied) of any requirement set forth in
the Credit Agreement for the express written approval of the Lenders or Required
Lenders, as the case may be, for any other or future modifications or amendments
of the Loan Documents, and no such further approval (either express or implied)
has been given with respect thereto as of the date of this Third Amendment.
12. CONDITIONS PRECEDENT. This Third Amendment shall be
effective when the Agent has received:
(a) an original of this Third Amendment, duly executed
on behalf of the Borrower, each Lender, the Agent and the
Collateral Agent;
(b) the Replacement Notes, duly executed by the
Borrower;
(c) a Guaranty Agreement of CAI V, duly executed on
behalf of CAI V, guaranteeing the due and prompt payment
when due of all Obligations;
(d) a First Amendment to Pledge and Security Agreement
of Parent, together with original stock certificates (and
stock powers signed in blank) representing all issued and
outstanding Common Stock of CAI V;
(e) the Acknowledgment and Agreement of Guarantors set
forth at the end of this Third Amendment, duly executed by
each Guarantor;
(f) a Pledge and Security Agreement, properly executed
on behalf of CAI V, pledging its general partnership
interests in all public income fund partnerships owned by
it, together with copies of the partnership agreements with
respect thereto and a duly executed Confirmation of Pledge
letter and a Notification of Pledge letter, each in form and
content acceptable to the Agent;
(g) a financing statement naming CAI V as debtor and
describing the collateral covered by the Pledge and Security
Agreement described in clause (f) above, together with
appropriate UCC searches showing that no State or Federal
tax liens have been filed and remain in effect and that no
financing statements or other notifications or filings have
been filed and remain in effect against CAI V;
(h) a Certificate of the Secretary or Assistant
Secretary of the Borrower certifying as to (i) the
resolutions of the board of directors of the Borrower
approving the execution and delivery of this Third
Amendment, (ii) the fact that the Articles of Incorporation
and Bylaws of the Borrower, which were certified and
delivered to the Lender pursuant to the secretary's
certificate executed by the Borrower's Secretary prior to
and in contemplation of the execution and delivery of the
Credit Agreement continue in full force and effect and have
not been amended or otherwise modified, except as disclosed
to the Lenders, and (iii) certifying that the officers and
agents of the Borrower who have been certified to the
Lender, pursuant to such prior secretary's certificate as
being authorized to sign and to act on behalf of the
Borrower continue to be so authorized or setting forth the
sample signatures of each of the officers and agents of the
Borrower authorized to execute and deliver this Third
Amendment and all other documents, agreements and
certificates on behalf of the Borrower;
(i) Certificate of the Secretary or Assistant Secretary
of CAI V which shall certify the names of officers of CAI V
authorized to sign CAI V's Guaranty and Pledge and Security
Agreement as described above, and the other documents and
certificates to be delivered hereunder, together with sample
signatures of such officers;
(j) a certified copy of the resolutions of the board of
directors of CAI V evidencing approval of its Guaranty and
the execution and delivery of its Pledge and Security
Agreement as contemplated herein, together with copies of
its Articles of Incorporation, Bylaws and Certificate of
Good Standing;
(k) the Warehousing Agency Fee described in paragraph
17 hereof; and
(l) such other matters as the Agent may reasonably
require with respect to the matters set forth herein.
13. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Lenders as follows:
(a) The Borrower has all requisite power and authority
to execute this Third Amendment and to perform all of its
obligations hereunder, and this Third Amendment has been
duly executed and delivered by the Borrower and constitutes
the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except to the
extent the enforcement thereof may be limited by any
applicable bankruptcy, insolvency or similar laws now or
hereafter in effect affecting creditors' rights generally.
(b) The execution, delivery and performance by the
Borrower of this Third Amendment have been duly authorized
by all necessary corporate action and do not (i) require any
authorization, consent or approval by any governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any
provision of any law, rule or regulation or of any order,
writ, injunction or decree presently in effect, having
applicability to the Borrower, or the articles of
incorporation or by-laws of the Borrower, or (iii) result in
a breach of or constitute a default under any indenture or
loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it
or its properties may be bound or affected.
(c) All of the representations and warranties contained
in the Credit Agreement are correct on and as of the date
hereof as though made on and as of such date, except to the
extent that such representations and warranties relate
solely to an earlier date; provided, however, that attached
hereto are replacement Schedules 8.4 (Revised) and 8.10
(Revised) for purposes of such representations and
warranties.
14. REFERENCES. All references in the Credit Agreement
to "this Agreement" shall be deemed to refer to the Credit Agreement as amended
by this Third Amendment and any and all references in the Security Documents or
any other Loan Documents to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended by this Third Amendment.
15. NO WAIVER. The execution of this Third Amendment
and acceptance of any documents related hereto shall not be deemed to be a
waiver of any Default or Event of Default under the Credit Agreement or breach,
default or event of default under any Security Document or other document held
by the Lender, whether or not known to the Lender and whether or not existing on
the date of this Third Amendment.
16. RELEASE. The Borrower, and each Guarantor by
signing the Acknowledgment and Agreement of Guarantor set forth below, hereby
absolutely and unconditionally release and forever discharge each Lender, the
Agent and the Collateral Agent and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower or such Guarantor has
had, now has or has made claim to have against any such person for or by reason
of any act, omission, matter, cause or thing whatsoever arising from the
beginning of time to and including the date of this Third Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.
17. COSTS AND EXPENSES. The Borrower hereby reaffirms
its agreement under the Credit Agreement to pay or reimburse the Agent on demand
for all costs and expenses incurred by the Agent in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Agent
for the services performed by such counsel in connection with the preparation of
this Third Amendment and the documents and instruments incidental hereto. The
Borrower hereby agrees that the Agent may, at any time or from time to time in
its sole discretion and without further authorization by the Borrower, make a
loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses.
18. AGENCY FEE. The Borrower agrees to pay to the
Agent, for the account of both Agents, a Warehousing agency fee of $100,000,
payable upon execution of this Third Amendment. The Warehousing agency fee
described above shall be deemed fully earned by the Agent upon execution of this
Third Amendment.
19. MISCELLANEOUS. This Third Amendment and the
Acknowledgment and Agreement of Guarantors may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to Credit Agreement to be duly executed as of the date first written
above.
CAPITAL ASSOCIATES
INTERNATIONAL, INC.
By /s/Xxxx X. Xxxxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxxxx
Its Senior Vice President
Term Loan Commitment: $782,408.90 NORWEST BANK COLORADO,
Term Loan Percentage: 16.6667% NATIONAL ASSOCIATION,
Working Capital Commitment: $2,500,000.00 as Agent and Continuing Lender
Working Capital Percentage: 33.3333%
Warehousing Commitment: $2,967,591.10
Warehousing Percentage: 13.01258% By /s/Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
Its Vice President
Term Loan Commitment: $782,408.90 NORWEST EQUIPMENT FINANCE, INC.
Term Loan Percentage: 16.6667% as Collateral Agent and Continuing
Working Capital Commitment: $0 Lender
Working Capital Percentage: 0%
Warehousing Commitment: $5,467,591.10
Warehousing Percentage: 23.97482% By /s/Xxxx X. XxxXxxxx
--------------------------------
Xxxx X. XxxXxxxx
Its Vice President
Term Loan Commitment: $1,564,813.10 THE SUMITOMO BANK, LIMITED,
Term Loan Percentage: 33.3333% as Continuing Lender
Working Capital Commitment: $2,500,000.00
Working Capital Percentage: 33.3333%
Warehousing Commitment: $5,935,186.90
Warehousing Percentage: 26.0252% By /s/Xxxxxx X. Xxxxxxx
--------------------------------
Its Vice President
Term Loan Commitment: $1,564,813.10 FIRST NATIONAL BANK OF BOSTON,
Term Loan Percentage: 33.3333% as Continuing Lender
Working Capital Commitment: $2,500,000.00
Working Capital Percentage: 33.3333%
Warehousing Commitment: $8,435,186.90
Warehousing Percentage: 36.9874% By /s/Xxxxxxx Xxxxxxx Xxxxxx
--------------------------------
Its Vice President
Term Loan Commitment: $0 XXXXX FARGO BANK (Colorado), N.A.,
Term Loan Percentage: 0% as Lender
Working Capital Commitment: $0
Working Capital Percentage: 0%
Warehousing Commitment: $0
Warehousing Percentage: 0% By /s/Xxxx Xxxx
--------------------------------
Its Vice President
