WAREHOUSING CREDIT AGREEMENT
AMONG
PLM EQUIPMENT GROWTH FUND VI
PLM EQUIPMENT GROWTH & INCOME FUND VII
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
ACQUISUB, LLC
PLM FINANCIAL SERVICES, INC.
AND
THE LENDERS LISTED HEREIN,
AND
IMPERIAL BANK,
as Agent
April 13, 2001
WAREHOUSING CREDIT AGREEMENT
THIS WAREHOUSING CREDIT AGREEMENT is entered into as of April 13, 2001, by
and among PLM EQUIPMENT GROWTH FUND VI, a California limited partnership ("EGF
VI"), PLM EQUIPMENT GROWTH & INCOME FUND VII, a California limited partnership
("EGF VII"), PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C., a Delaware
limited liability company ("Income Fund I"), and ACQUISUB, LLC, a Delaware
limited liability company ("Acquisub") (EGF VI, EGF VII, Income Fund I, and
Acquisub each individually being a "Borrower" and, collectively, the
"Borrowers"), and PLM FINANCIAL SERVICES, INC., a Delaware corporation and the
sole general partner, in the case of EGF VI and EGF VII, and the sole manager,
in the case of Income Fund I and Acquisub ("FSI"), the banks, financial
institutions and institutional lenders from time to time party hereto and
defined as Lenders herein, and IMPERIAL BANK ("Imperial Bank") not in its
individual capacity, but solely as agent.
RECITALS
Lenders have agreed to make advances of credit available to Borrowers, but
only upon the terms and subject to the conditions hereinafter set forth and in
reliance on the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants hereinafter set forth, and intending to be legally bound, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein, the following terms have the following
meanings:
"ACQUISITION" means, with respect to any Borrower, any transaction, or any
series of related transactions, by which such Borrower, FSI or any of FSI's
Subsidiaries, directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any Person or any division thereof, whether
through a purchase of assets, merger or otherwise, or (b) acquires (in one
transaction or as the most recent transaction in a series of transactions)
control of at least a majority of the stock of a corporation having ordinary
voting power for the election of directors, or (c) acquires control of at least
a majority of the ownership interests in any partnership or joint venture.
"ACQUISUB" has the meaning set forth in the Preamble to this Agreement.
"ADJUSTED LIBOR" means, for each Interest Period in respect of LIBOR Loans,
an interest rate per annum (rounded upward to the nearest 1/16th of one percent
(0.0625%)) determined pursuant to the following formula:
LIBOR
Adjusted LIBOR = _____________________________________
1.00 - Eurodollar Reserve Percentage
The Adjusted LIBOR shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"ADVANCE" means any Advance made or to be made by any Lender to any
Borrower as set forth in Section 2.1.1.
"AFFILIATE" means, with respect to any Person, (a) each Person that,
directly or indirectly, through one or more intermediaries, owns or controls,
whether beneficially or as a trustee, guardian or other fiduciary, five percent
(5.0%) or more of the stock having ordinary voting power in the election of
directors of such Person or of the ownership interests in any partnership,
limited liability company or joint venture, (b) each Person that controls, is
controlled by or is under common control with such Person or any Affiliate of
such Person, or (c) each of such Person's officers, directors, joint venturers,
members, managers, and partners; provided, however, that in no case shall any
Lender or Agent be deemed to be an Affiliate of any Borrower or FSI for purposes
of this Agreement. For the purpose of this definition, "control" of a Person
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise.
"AGENT" means Imperial Bank solely when acting in its capacity as the Agent
under this Agreement or any of the other Loan Documents, and any successor
Agent.
"AGREEMENT" means this Warehousing Credit Agreement dated as of April 13,
2001, including all amendments, modifications and supplements hereto, renewals,
extensions or restatements hereof, and all appendices, exhibits and schedules to
any of the foregoing, and shall refer to the Agreement as the same may be in
effect from time to time.
"AIRCRAFT" means any corporate, commuter, or commercial aircraft or
helicopters, with modifications (as applicable) and replacement or spare parts
used in connection therewith, including, without limitation, engines, rotables
and propellers, and any engines, rotables or propellers used on a stand-alone
basis.
"APPLICABLE MARGIN" means:
(a) with respect to Base Rate Loans, zero percent (0.00%); and
(b) with respect to LIBOR Loans, two percent (2.0%).
"ASSIGNMENT AND ACCEPTANCE" has the meaning set forth in Section 11.10.2.
"BANKRUPTCY CODE" means the Bankruptcy Code of 1978, as amended, as
codified under Title 11 of the United States Code, and the Bankruptcy Rules
promulgated thereunder, as the same may be in effect from time to time.
"BASE RATE" means the greater of (i) the Prime Rate and (ii) the Federal
Funds Rate plus 0.50% per annum.
"BASE RATE LOAN" means any borrowing which bears interest at a rate
determined with reference to the Base Rate.
"BORROWER" has the meaning set forth in the Preamble.
"BORROWING BASE" means, as calculated separately for each Borrower
individually as at and for any date of determination, an amount not to exceed:
(a) one hundred percent (100.0%) of the aggregate net book value of
all Eligible Inventory; provided, however, that there shall be excluded from the
Borrowing Base the aggregate net book value of all items of Eligible Inventory
which are either (i) off-lease or (ii) subject to a Lease under which any
applicable lease or rental payment is more than ninety (90) days past due,
less
(b) the aggregate Consolidated Funded Debt of such Borrower then
outstanding, excluding the aggregate principal amount of the Loans outstanding
for such Borrower under the Facility,
in each case computed, (1) with respect to any requested Loan, as of the
requested Funding Date (and shall include the item(s) of Eligible Inventory to
be financed or refinanced with the proceeds of the requested Loan), and (2) with
respect to the delivery of any monthly Borrowing Base Certificate to be
furnished pursuant to Section 5.1.3, as of the last day of the calendar month
for which such Borrowing Base Certificate is furnished (provided, that for the
purpose of computing the Borrowing Base, in the event that any Borrower or a
Marine Subsidiary of such Borrower shall own less than one hundred percent
(100.0%) of the record or beneficial interests in any item of Eligible
Inventory, with one or more of the other Borrowers owning of record or
beneficially the remaining interests, there shall be included only such
Borrower's or such Marine Subsidiary's, as the case may be, ratable interest in
such item of Eligible Inventory).
"BORROWING BASE CERTIFICATE" means, with respect to any Borrower, a
certificate with appropriate insertions setting forth the components of the
Borrowing Base of such Borrower as of the last day of the month for which such
certificate is submitted or as of a requested Funding Date, as the case may be,
which certificate shall be substantially in the form set forth in Exhibit B and
certified by a Responsible Officer of such Borrower.
"BUSINESS DAY" means any day which is not a Saturday, Sunday or a legal
holiday under the laws of the State of California or is not a day on which
banking institutions located in the State of California are authorized or
permitted by law or other governmental action to close and, with respect to
LIBOR Loans, means any day on which dealings in foreign currencies and exchanges
may be carried on by Agent and Lenders in the London interbank market.
"CASUALTY LOSS" means any of the following events with respect to any item
of Eligible Inventory: (a) the actual total loss or constructive total loss of
such item of Eligible Inventory; (b) such item of Eligible Inventory shall
become lost, stolen, destroyed, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever; (c) the seizure of such item of
Eligible Inventory for a period exceeding sixty (60) days or the condemnation or
confiscation of such item of Eligible Inventory; or (d) such item of Eligible
Inventory shall be deemed under its lease to have suffered a casualty loss as to
the entire item of Eligible Inventory.
"CHANGE OF CONTROL" means the occurrence after the date of this Agreement
of: (i) any Person or two or more Persons acting in concert acquiring beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of PLMI (or other securities convertible into such
securities) representing greater than or equal to 50% of the combined voting
power of all securities of PLMI entitled to vote in the election of directors;
(ii) any Person or two or more Persons acting in concert acquiring by contract
or otherwise, or entering into a contract or arrangement which, upon
consummation, will result in its or their acquisition of, or control over,
securities of PLMI (or other securities convertible into such securities)
representing greater than or equal to 50% of the combined voting power of all
securities of PLMI entitled to vote in the election of directors; or (iii) at
any time Continuing Directors shall cease to constitute a majority of the board
of directors of PLMI.
"CHARGES" means, with respect to any Borrower, all federal, state, county,
city, municipal, local, foreign or other governmental taxes, levies,
assessments, charges or claims, in each case then due and payable, upon or
relating to (a) the Loans made to such Borrower hereunder, (b) such Borrower's
employees, payroll, income or gross receipts, (c) such Borrower's ownership or
use of any of its Properties or assets or (d) any other aspect of such
Borrower's business.
"CLOSING" means the time at which each of the conditions precedent set
forth in Section 3.1 to the effectiveness of this Agreement shall have been duly
fulfilled or satisfied by each Borrower.
"CLOSING DATE" means the date on which Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended, the Treasury
Regulations adopted thereunder and the Treasury Regulations proposed thereunder
(to the extent Requisite Lenders, in their sole discretion, reasonably determine
that such proposed regulations set forth the regulations that apply in the
circumstances), as the same may be in effect from time to time.
"COLLATERAL" means the Collateral described in one or more of the Security
Agreements.
"COMMITMENT" means with respect to each Lender the amounts set forth on
Schedule A and "Commitments" means all such amounts collectively, as each may be
amended from time to time upon the execution and delivery of an instrument of
assignment pursuant to Section 11.10, which amendments shall be evidenced on
Schedule 1.1.
"COMMITMENT TERMINATION DATE" means April 12, 2002.
"COMPLIANCE CERTIFICATE" means, with respect to any Borrower (other than
Acquisub), a certificate signed by a Responsible Officer of such Borrower,
substantially in the form of Exhibit D, with such changes as Agent may from time
to time reasonably request for the purpose of having such certificate disclose
the matters certified therein and the method of computation thereof, and with
respect to PLMI, a certificate signed by a Responsible Officer of PLMI,
substantially in the form of Exhibit A-1 and Exhibit A-2 to the PLMI Letter,
with such changes as Agent may from time to time reasonably request for the
purpose of having such certificate disclose the matters certified therein and
the method of computation thereof.
"CONSOLIDATED EBIDA" means, for any Equipment Growth Fund, as measured as
at any date of determination for any period on a consolidated basis, the sum of
(a) the Consolidated Net Income of such Equipment Growth Fund, plus (b) all
amounts treated as expenses for depreciation, including such Equipment Growth
Fund's proportional share of depreciation expense related to equipment owned
jointly with USPE's, and the amortization of intangibles of any kind, plus (c)
Consolidated Interest Expense, plus (d) cash distributions received from USPE's,
and in the cases of clauses (b) and (c) above, each to the extent included in
the determination of Consolidated Net Income.
"CONSOLIDATED FUNDED DEBT" means, for any Borrower, as measured at any date
of determination on a consolidated basis, the total amount of all interest
bearing obligations (including Indebtedness for borrowed money) of such
Borrower, all capital lease obligations of such Borrower as a lessee, and the
stated amount of all outstanding undrawn letters of credit issued on behalf of
such Borrower or for which such Borrower is liable.
"CONSOLIDATED INTANGIBLE ASSETS" means, for any Person, as measured at any
date of determination on a consolidated basis, all intangible assets of such
Person.
"CONSOLIDATED INTEREST EXPENSE" means, for any Equipment Growth Fund, as
measured at any date of determination for any period on a consolidated basis,
the gross interest expense of such Equipment Growth Fund for the period
(including all commissions, discounts, fees and other charges in connection with
standby letters of credit and similar instruments), less interest income for
that period.
"CONSOLIDATED NET INCOME" means, for any Equipment Growth Fund, as measured
at any date of determination for any period on a consolidated basis, the net
income (or loss) of such Equipment Growth Fund for such period taken as a single
accounting period.
"CONSOLIDATED NET WORTH" means, for any Person, as measured at any date of
determination, the difference between Consolidated Total Assets and Consolidated
Total Liabilities.
"CONSOLIDATED TANGIBLE NET WORTH" means, for any Person, as measured at any
date of determination, the difference between Consolidated Net Worth and
Consolidated Intangible Assets.
"CONSOLIDATED TOTAL ASSETS" means, for any Person, as measured at any date
of determination on a consolidated basis, all assets of such Person.
"CONSOLIDATED TOTAL LIABILITIES" means, for any Person, as measured at any
date of determination on a consolidated basis, all liabilities of such Person.
"CONTINGENT OBLIGATION" means, as to any Person, (a) any Guaranty
Obligation of that Person and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, (ii) with
respect to the Indebtedness of any partnership or joint venture of which such
Person is a partner or a joint venturer, (iii) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered, or (iv) in respect of any interest rate protection contract that is
not entered into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall, with respect to clause
(b)(iv) of this definition, be marked to market on a current basis.
"CONTINUING DIRECTOR" means, at any date, an individual (a) who is a member
of the Board of Directors of PLMI on the date hereof or (b) who has been
nominated to be a member of such Board of Directors by a majority of the other
Continuing Directors then in office.
"DEFAULT RATE" has the meaning set forth in Section 2.3.
"DESIGNATED DEPOSIT ACCOUNT" means a demand deposit account maintained by
Borrowers with Imperial Bank designated by written notice from Borrowers to
Agent.
"DOLLARS" and the sign "$" means lawful money of the United States of
America.
"EFFECTIVE AMOUNT" means with respect to any Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowing and prepayments or repayments thereof occurring on such date.
"EGF VI" has the meaning set forth in the Preamble to this Agreement
"EGF VII" has the meaning set forth in the Preamble to this Agreement.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws of
the United States, or any state thereof; (b) a commercial bank organized under
the laws of any other country which is a member of the Organization for Economic
Cooperation and Development ("OECD"), or a political subdivision of any such
country, provided, however, that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD or the Cayman Islands; (c) the central bank of any country
which is a member of the OECD; (d) an insurance company organized under the laws
of the United States; (e) a commercial finance company, mutual or other
investment fund, lease financing company or other institutional investor
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business, provided that such Person is an "accredited investor"
(as defined in Regulation D under the Securities Act of 1933, as amended); (f)
any Lender party to this Agreement; (g) any Lender Affiliate and (h) any other
Person approved by Agent and Borrower, such approval not to be unreasonably
withheld; provided, however, that (i) Borrower's approval shall not be required
so long as an Event of Default has occurred and is continuing and (ii) an
Affiliate of Borrower shall not qualify as an Eligible Assignee.
"ELIGIBLE INVENTORY" means, with respect to any Borrower, all Trailers
(less than ten years old), Aircraft and Aircraft engines complying with Stage
III noise reduction requirements, Railcars (less than twenty-five years old),
marine containers (less than ten years old), and, if approved by the Requisite
Lenders, other related Equipment, in each case that (a) is owned of record by
such Borrower or a Marine Subsidiary of such Borrower (or jointly by such
Borrower and one or more of the other Borrowers) or, subject to the approval of
Agent, any Owner Trustee of which such Borrower is the sole beneficiary or owner
(or is the beneficiary or owner jointly with one or more of the other
Borrowers), as applicable, (b) is subject to a Lease acceptable to Agent in its
sole discretion (as reviewed in full in connection with each requested borrowing
hereunder), which Lease shall, at a minimum, (A) be non-cancelable, (B) be with
a lessee of acceptable credit quality as determined by Agent, and (C) be of a
firm term in excess of one (1) year, except that cargo-containers and Trailers
may be on Utilization Leases; (c) has a value and marketability reasonably
satisfactory to the Agent; and (d) is free and clear of all Liens, except (i)
any interest of a lessee thereof pursuant to a Lease entered into with such
Borrower or a Marine Subsidiary of such Borrower or such Borrower's or such
Marine Subsidiary's predecessor in interest or such Owner Trustee or nominee
entity, as lessor, or (ii) as otherwise permitted by Section 6.1, provided that
any Liens of the type permitted under clause (ii) encumbering any item of
Equipment shall not secure obligations in amounts which materially impair the
equity value in such item of Equipment. Requisite Lenders in their sole
discretion, on a case by case basis, may approve other items or types of
Equipment for credit under "Eligible Inventory" from time to time. Equipment
which is Eligible Inventory will cease to be Eligible Inventory at any time it
no longer continues to meet all of the above requirements.
"EMPLOYEE BENEFIT PLAN" means, with respect to any Borrower, any Pension
Plan and any employee welfare benefit plan, as defined in Section 3(1) of ERISA,
that is maintained for the employees of such Borrower, FSI or any of FSI's
Subsidiaries or any ERISA Affiliate of such Borrower.
"ENVIRONMENTAL CLAIMS" means, with respect to any Borrower, all claims,
however asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law or
for release or injury to the environment or threat to public health, personal
injury (including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from Property, whether or not owned by such Borrower, FSI or any
Subsidiary of FSI, or (b) any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"ENVIRONMENTAL LAWS" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act.
"ENVIRONMENTAL PERMIT" has the meaning set forth in Section 4.1.15.
"EQUIPMENT" means, with respect to any Borrower, all items of
transportation related equipment owned directly or beneficially by such Borrower
or by any Marine Subsidiary of such Borrower (or jointly by such Borrower and
one or more of the other Borrowers) and held for lease or rental, and shall
include items of equipment legal or record title to which is held by any Owner
Trustee or nominee entity in which such Borrower or any Marine Subsidiary of
such Borrower holds the sole beneficial interest (or jointly with one or more
other Borrowers).
"EQUIPMENT COST" means, with respect to any item of Equipment acquired by a
Borrower with the proceeds of a Loan, the Invoice Price therefor, and with
respect to any item of Equipment not acquired by a Borrower with the proceeds of
a Loan, the net book value therefor determined in accordance with GAAP.
"EQUIPMENT GROWTH FUNDS" means any and all of EGF VI, EGF VII and Income
Fund I.
"EQUIPMENT PURCHASE AGREEMENT" means an equipment purchase agreement, in
form and substance satisfactory to Agent, between Acquisub and any other
Borrower, entered into for the benefit of Lenders, providing for the purchase by
such other Borrower of the Equipment upon which a Loan has been made.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, as the same may be in effect from time to time, and any successor
statute.
"ERISA AFFILIATE" means, as applied to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which that Person
is a member and which is under common control within the meaning of the
regulations promulgated under Section 414 of the Code.
"EURODOLLAR RESERVE PERCENTAGE" means the maximum reserve percentage
(expressed as a decimal, rounded upward to the nearest 1/100th of one percent
(0.01%)) in effect from time to time (whether or not applicable to any Lender)
under regulations issued by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency liabilities having a
term comparable to such Interest Period.
"EVENT OF DEFAULT" means any of the events set forth in Section 8.1.
"EXISTING NOTE AND LOAN AGREEMENTS" means (i) that certain Note Agreement
dated as of August 1, 1993 among EGF VI, as company, and Allstate Insurance
Company and Allstate Life Insurance Company, as purchasers, (ii) those certain
Note Agreements dated as of December 1, 1995 between EGF VII and The Equitable
Life Assurance Society of the United States, Fort Dearborn Life Insurance
Company, Xxxxxx National Life Insurance Company, The Minnesota Mutual Life
Insurance Company, and Mutual Trust Life Insurance Company, and (iii) that
certain Note Agreement dated as of December 15, 1996 between Income Fund I and
Keyport Life Insurance Company (the "Keyport Note Agreement").
"FACILITY" means the total Commitments described in Schedule A, as such
Schedule A may be amended from time to time as set forth on Schedule 1.1, for
the revolving credit facility described in Section 2.1.1 to be provided by
Lenders to Borrowers, on a several but not joint basis, according to each
Lender's Pro Rata Share.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)". If
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotation") for such day
under the caption "Federal Funds Effective Rate". If on any relevant day the
appropriate rate for such previous day is not yet published in either H.15(519)
or the Composite 3:30 p.m. Quotation, the rate for such day will be the
arithmetic mean of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System and any successor thereto.
"FORM W-8BEN" has the meaning set forth in Section 2.14.6.
"FORM W-8ECI" has the meaning set forth in Section 2.14.6.
"FSI" has the meaning set forth in the Preamble.
"FUNDED DEBT RATIO" means, as at any date of determination, the ratio of
(a) the aggregate principal amount of the Loans outstanding for Acquisub under
the Facility plus the undefeased portion of any Indebtedness of PLMI to (b) the
Consolidated Tangible Net Worth of PLMI.
"FUNDING DATE" means with respect to any proposed borrowing hereunder, the
date funds are advanced to any Borrower for any Loan requested by such Borrower.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar function of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means (a) any federal, state, county, municipal or
foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to whose jurisdiction that Person has consented.
"GUARANTORS" means PLMI, FSI and TEC.
"GUARANTY" means that certain Guaranty of even date herewith executed
jointly and severally by PLMI, FSI, and TEC in favor of Lenders and Agent,
including all amendments, modifications and supplements thereto and all
appendices, exhibits and schedules to any of the foregoing, and shall refer to
the Guaranty as the same may be in effect from time to time, substantially in
the form of Exhibit H.
"GUARANTY OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease for
capital equipment other than Eligible Inventory, dividend, letter of credit or
other obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person, whether or not contingent,
(a) to purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof. The
amount of any Guaranty Obligation shall be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
"HAZARDOUS MATERIALS" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"IMI" means PLM Investment Management, Inc., a California corporation, and
a wholly owned Subsidiary of FSI.
"IMPERIAL BANK" has the meaning set forth in the Preamble.
"INCOME FUND I" has the meaning set forth in the Preamble to this
Agreement.
"INDEBTEDNESS" means, as to any Person, (a) all indebtedness of such Person
for borrowed money, (b) all leases of equipment of such Person as lessee, (c) to
the extent not included in clause (b), above, all capital leases of such Person
as lessee, (d) any obligation of such Person for the deferred purchase price of
Property or services (other than trade or other accounts payable in the ordinary
course of business and not more than ninety (90) days past due), (e) any
obligation of such Person that is secured by a Lien on assets of such Person,
whether or not that Person has assumed such obligation or whether or not such
obligation is non-recourse to the credit of such Person, (f) obligations of such
Person arising under acceptance facilities or under facilities for the discount
of accounts receivable of such Person and (g) any obligation of such Person to
reimburse the issuer of any letter of credit issued for the account of such
Person upon which a draw has been made. "Indemnified Liability" has the meaning
set forth in Section 10.2.
"INDEMNIFIED PERSON" has the meaning set forth in Section 10.2.
"INTEREST DIFFERENTIAL" means, with respect to any prepayment of a LIBOR
Loan on a day other than an Interest Payment Date on which such LIBOR Loan
matures, the difference between (a) the per annum interest rate payable with
respect to such LIBOR Loan as of the date of the prepayment and (b) the Adjusted
LIBOR on, or as near as practicable to, the date of the prepayment for a LIBOR
Loan commencing on such date and ending on the last day of the applicable
Interest Period. The determination of the Interest Differential by Agent shall
be conclusive in the absence of manifest error.
"INTEREST PAYMENT DATE" means, with respect to any LIBOR Loan, the last day
of each Interest Period applicable to such Loan and, with respect to Base Rate
Loans, the first Business Day of each calendar month following the Funding Date
of such Base Rate Loan; provided, however, that if any Interest Period for a
LIBOR Loan exceeds three (3) months, interest shall also be paid on the date
which falls three (3) months after the beginning of such Interest Period.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the one-month,
two-month, three-month or six-month period selected by the Requesting Borrower
pursuant to Section 2, in each instance commencing on the applicable Funding
Date of the Loan; provided, however, that any Interest Period which would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day except that in the instance of any LIBOR Loan, if such
next succeeding Business Day falls in the next calendar month, the Interest
Period shall end on the next preceding Business Day.
"INVESTMENT" means, when used in connection with any Person, any investment
by or of that Person, whether by means of purchase or other acquisition of stock
or other securities of any other Person or by means of loan or advance (other
than advances to employees for moving or travel expenses, drawing accounts and
similar expenditures in the ordinary course of business), capital contribution,
guaranty or other debt or equity participation or interest, or otherwise, in any
other Person, including any partnership and joint venture interests of that
Person in any other Person or in any item of transportation-related equipment
owned by a Person unaffiliated with that Person and on lease to another third
party, in which that Person acquires a right to share, directly or indirectly.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended (15 X.X.X.xx. 80a-1 et seq.), as the same may be in effect from time to
time, or any successor statute thereto.
"INVOICE PRICE" means the sum of the purchase price (including
modifications, as applicable), delivery charges, third party brokerage fees and
other reasonable closing costs, if any (provided that delivery charges, third
party brokerage fees and closing costs shall be included in the computation of
the "Invoice Price" only to the extent that they do not, in the aggregate,
exceed five percent (5.0%) of the total purchase price), and all applicable
taxes, paid by a Borrower for or with respect to any item of Eligible Inventory.
"IRS" means the Internal Revenue Service and any successor thereto.
"LEASE" means, for any Borrower, each and every item of chattel paper,
installment sales agreement, equipment lease or rental agreement (including
progress payment authorizations) relating to an item of Equipment of which such
Borrower is the sole record or beneficial lessor (or a record or beneficial
lessor jointly with one or more of the other Borrowers) and in respect of which
the lessee and lease terms (including, without limitation, as to rental rate,
maturity and insurance coverage) are acceptable to Agent, in its sole
discretion. The term "Lease" includes (a) all payments to be made thereunder,
(b) all rights of such Borrower therein, and (c) any and all amendments,
renewals, extensions or guaranties thereof.
"LENDER AFFILIATE" means a Person engaged primarily in the business of
commercial banking and that is an Affiliate of a Lender or of a Person of which
a Lender is an Affiliate.
"LENDERS" means the banks, financial institutions or other institutional
lenders which have executed signature pages to this Agreement and such other
Assignees, banks, financial institutions or other institutional lenders as shall
hereafter execute and deliver an Assignment and Acceptance with respect to all
or any portion of the Commitments and the Loans advanced and maintained pursuant
to the Commitments, in each case pursuant to and in accordance with Section
11.10.
"LENDING OFFICE" means, with respect to any Lender, the office or offices
of the Lender specified as its lending office opposite its name on the
applicable signature page hereto, or such other office or offices of the Lender
as it may from time to time notify Borrowers and Agent.
"LEVERAGE RATIO" means, as measured separately for each Equipment Growth
Fund as at any date of determination, the ratio of (a) Consolidated Total
Liabilities of such Equipment Growth Fund to (b) the Consolidated Net Worth of
such Equipment Growth Fund.
"LIBOR" means, with respect to any Loan to be made, continued as or
converted into a LIBOR Loan, the London Inter-Bank Offered Rate (determined
solely by Agent), rounded upward to the nearest 1/16th of one percent (0.0625%),
at which Dollar deposits are offered to Agent by major banks in the London
interbank market at or about 11:00 a.m., London time, on the second Business Day
prior to the first day of the related Interest Period with respect to such Loan
in an aggregate amount approximately equal to the amount of such Loan and for a
period of time comparable to the number of days in the applicable Interest
Period. The determination of LIBOR by Agent shall be conclusive in the absence
of manifest error.
"LIBOR LOAN" means a Loan that bears interest based on Adjusted LIBOR.
"LIEN" means any mortgage, pledge, hypothecation, assignment for security,
security interest, encumbrance, xxxx, xxxx or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, affecting any
Property, including any agreement to grant any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature of a security
interest, and the filing of or agreement to file or deliver any financing
statement (other than a precautionary financing statement with respect to a
lease that is not in the nature of a security interest) under the UCC or
comparable law of any jurisdiction.
"LIMITED PARTNERSHIP AGREEMENT" means (a) for EGF VI, the Amended and
Restated Limited Partnership Agreement dated as of December 20, 1991 and (b) for
EGF VII, the Third Amended and Restated Limited Partnership Agreement of EGF VII
dated as of May 10, 1993, as amended by the First Amendment to the Third Amended
and Restated Limited Partnership Agreement dated May 28, 1993 and by the Second
Amendment to Third Amended and Restated Limited Partnership Agreement dated as
of January 21, 1994.
"LOAN" has the meaning set forth in Section 2.1.1.
"LOAN DOCUMENT" when used in the singular and "Loan Documents" when used in
the plural means any and all of this Agreement, the Notes, the Security
Documents, the Subordination Agreements, the Lockbox Agreement, the Guaranty,
the PLMI Letter, and any and all other agreements, documents and instruments
executed and delivered by or on behalf or support of any Borrower to Agent or
any Lender or any of their respective authorized designees evidencing or
otherwise relating to the Advances and the Liens granted to Agent, on behalf of
Lenders, with respect to the Advances, as the same may from time to time be
amended, modified, supplemented or renewed.
"LOAN PARTIES" means EGF VI, EGF VII, Income Fund I, Acquisub, any Marine
Subsidiary, any Owner Trustee, FSI, TEC, IMI, and PLMI, and a "Loan Party" means
any one of the Loan Parties.
"LOCKBOX" has the meaning set forth in Section 5.9.
"LOCKBOX AGREEMENT" means the Lockbox Agreement of even date herewith,
among Borrowers, Imperial Bank, and Agent on behalf and for the benefit of
Lenders, relating to the Lockbox, substantially in the form of Exhibit J.
"MARINE SUBSIDIARY" means, for any Borrower, a Subsidiary of such Borrower
(in which the remaining record or beneficial ownership interests may be held by
any other Borrower) organized for the purpose of holding legal record title to
one or more marine vessels or to aircraft rotables and spare parts.
"MATERIAL ADVERSE EFFECT" means, with respect to any Loan Party, any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
any Loan Document, (b) is or could reasonably be expected to be material and
adverse to the condition (financial or otherwise) or business operations of such
Loan Party, (c) materially impairs or could reasonably be expected to materially
impair the ability of such Loan Party to perform its Obligations, or (d)
materially impairs or could reasonably be expected to materially impair the
ability of Agent or any Lender to enforce any of its or their legal remedies
pursuant to the Loan Documents.
"MATURITY DATE" means, with respect to each Loan advanced by Lenders
hereunder with respect to Eligible Inventory, the date which is two hundred and
seventy (270) days after the Funding Date of such Loan or such earlier or later
date as requested by the Requesting Borrower and approved by Requisite Lenders,
in their sole and absolute discretion; provided, however, in no event shall any
Maturity Date be a date which is later than the Commitment Termination Date.
"MAXIMUM AVAILABILITY" has the meaning set forth in Section 2.1.1.
"MULTIEMPLOYER PLAN" means, with respect to any Borrower, a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA, and to which such Borrower, FSI
or any of FSI's Subsidiaries or any ERISA Affiliate of such Borrower, FSI or any
of FSI's Subsidiaries is making, or is obligated to make, contributions or has
made, or been obligated to make, contributions within the preceding five (5)
years.
"NET CASH PROCEEDS FROM THE DISPOSITION OF EQUIPMENT" means, proceeds from
the disposition of Equipment plus liquidating distributions from USPE's, less,
payments for the purchase of Equipment and associated expenses including but not
limited to, acquisition and negotiation fees.
"NOTE" has the meaning set forth in Section 2.1.1(a)(i), and any and all
replacements, extensions, substitutions and renewals thereof.
"NOTICE OF BORROWING" means a notice given by any Borrower to Agent in
accordance with Section 2.7, substantially in the form of Exhibit E, with
appropriate insertions.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by any Borrower to
Agent in accordance with Section 2.8, substantially in the form of Exhibit F,
with appropriate insertions.
"OBLIGATIONS" means, with respect to any Borrower, all loans, advances,
liabilities and obligations for monetary amounts owing by such Borrower to any
Lender or Agent, whether due or to become due, matured or unmatured, liquidated
or unliquidated, contingent or non-contingent, and all covenants and duties
regarding such amounts, of any kind or nature, arising under any of the Loan
Documents. This term includes, without limitation, all principal, interest
(including interest that accrues after the commencement of a case or proceeding
against such Borrower under the Bankruptcy Code), fees, including, without
limitation, any and all prepayment fees, facility fees, commitment fees,
arrangement fees, agent fees and attorneys' fees and any and all other fees,
expenses, costs or other sums chargeable to such Borrower under any of the Loan
Documents.
"OPERATING AGREEMENT" means (a) for Income Fund I, the Fifth Amended and
Restated Operating Agreement of Income Fund I, entered into as of January 24,
1995 and (b) for Acquisub, the Operating Agreement of Acquisub, entered into as
of April 9, 2001.
"OPERATING CASH FLOW COVERAGE RATIO" means, as measured separately for each
Equipment Growth Fund as at any date of determination, the ratio of (a)
Consolidated EBIDA of such Equipment Growth Fund adjusted for gains or losses on
the sale of Equipment in the ordinary course of business to the extent not
already taken into account in the determination of Consolidated EBIDA to (b) the
sum of (i) the aggregate amount of principal payments on Consolidated Funded
Debt of such Equipment Growth Fund (excluding the Loans) made during the four
consecutive fiscal quarters ending on such date plus (ii) Consolidated Interest
Expense of such Equipment Growth Fund plus (iii) twenty-five percent (25%) of
the aggregate principal amount of the Loans outstanding for such Equipment
Growth Fund on such date (Consolidated EBIDA and Consolidated Interest Expense
to be measured for the four consecutive fiscal quarters then ended on such
date).
"OPINION OF COUNSEL" means the favorable written legal opinion of Xxxxx
Xxxxx, general counsel of FSI, on behalf of FSI for itself and as the sole
general partner or managing member, as applicable, of EGF VI, EGF VII, Acquisub
and Income Fund I, and general counsel of TEC, IMI and PLMI, substantially in
the form of Exhibit C.
"OTHER TAXES" has the meaning set forth in Section 2.14.2.
"OVERADVANCE" has the meaning set forth in Sections 2.1.1(a)(iii) and (iv).
"OWNER TRUSTEE" means any Person acting in the capacity of (a) a trustee
for any owner trust or (b) a nominee entity, in each case holding title to any
Eligible Inventory pursuant to a trust or similar agreement with any Borrower or
FSI.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"PENSION PLAN" means, with respect to any Borrower, any employee pension
benefit plan, as defined in Section 3(2) of ERISA, that is maintained for the
employees of such Borrower, FSI or any of FSI's Subsidiaries or any ERISA
Affiliate of such Borrower, FSI or any of FSI's Subsidiaries, other than a
Multiemployer Plan.
"PERMITTED LIENS" has the meaning set forth in Section 6.1.
"PERMITTED RIGHTS OF OTHERS" means, as to any Property in which a Person
has an interest, (a) an option or right to acquire a Lien that would be a
Permitted Lien, (b) the reversionary interest of a lessor under a lease of such
Property and (c) an option or right of the lessee under a lease of such Property
to purchase such property at fair market value.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or Governmental Authority.
"PFF" means PFF Bank & Trust.
"PLMI" means PLM International, Inc., a Delaware corporation.
"PLMI LETTER" means the PLMI Letter of even date herewith between PLMI and
Agent, including all amendments, modifications and supplements thereto, and
shall refer to the PLMI Letter as the same may be in effect from time to time,
substantially in the form of Exhibit K.
"POTENTIAL EVENT OF DEFAULT" means a condition or event which, after notice
or lapse of time or both, will constitute an Event of Default.
"PREPAYMENT DATE" has the meaning set forth in Section 2.2.2.
"PRIME RATE" means, at any time, the rate of interest per annum publicly
announced from time to time by Imperial Bank as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by Imperial Bank as its Prime Rate is an index or base rate
and shall not necessarily be its lowest rate charged to Imperial Bank's
customers or other banks. "Property" means any interest in any kind of property
or asset, whether real, personal or mixed, whether tangible or intangible.
"PRO RATA SHARE" means, as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of the Effective Amount of such Lender's Loans divided by the Effective
Amount of all Loans, or if no Loans are outstanding, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time of
such Lender's aggregate Commitments divided by the aggregate Commitments or, if
the Commitments have expired or been terminated and all Loans repaid in full,
the percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) of the Effective Amount of such Lender's Loans divided by the aggregate
Effective Amount of all Loans immediately before such repayment in full.
"PUBLIC UTILITY HOLDING COMPANY ACT" means the Public Utility Holding
Company Act of 1935, as amended (15 X.X.X.xx. 79 et seq.) as the same shall be
in effect from time to time, and any successor statute thereto.
"RAILCAR" means all railroad rolling stock, including, without limitation,
all coal, timber, plastic pellet, tank, xxxxxx, flat and box cars and
locomotives.
"REGULATIONS T, U AND X" means, collectively, Regulations T, U and X
adopted by the Federal Reserve Board (12 C.F.R. Parts 220, 221 and 224,
respectively) and any other regulation in substance substituted therefor.
"REQUESTING BORROWER" means any Borrower requesting a Loan pursuant to
Section 2.1.1.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule, regulation, guideline or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is
subject.
"REQUISITE LENDERS" means any combination of Lenders whose combined Pro
Rata Share (and voting interest with respect thereto) of all amounts outstanding
under this Agreement, or, in the event there are no amounts outstanding, the
Commitments, is greater than sixty-six and two-thirds percent (66 2/3%) of all
such amounts outstanding or the total Commitments, as the case may be; provided,
however, that in the event there are only two (2) Lenders, Requisite Lenders
means both Lenders.
"RESPONSIBLE OFFICER" means for (i) FSI, any of the President, Chief
Executive Officer, Executive Vice President, Chief Financial Officer, Secretary
or Corporate Controller of FSI having authority to request Advances or perform
other duties required hereunder, (ii) Borrowers, any of the President, Chief
Executive Officer, Executive Vice President, Chief Financial Officer, Secretary
or Corporate Controller of FSI as the sole general partner of EGF VI or EGF VII,
as the case may be, or the sole manager of Income Fund I or Acquisub, as the
case may be, in each case having authority to request Advances or perform other
duties required hereunder, and (iii) any other Loan Party, any of the President,
Chief Executive Officer, Executive Vice President, Chief Financial Officer,
Secretary or Corporate Controller thereof.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"SECURITY AGREEMENTS" means (i) the Security Agreement of even date
herewith between EGF VI and Agent, on behalf and for the benefit of the Lenders,
providing for the grant of a first priority perfected security interest in the
Equipment being financed by EGF VI under this Facility and certain related
Collateral, subject to no other Liens other than Permitted Liens, substantially
in the form of Exhibit N (the "Security Agreement (EGF VI)"), (ii) the Security
Agreement of even date herewith between Income Fund I and Agent, on behalf and
for the benefit of the Lenders, providing for the grant of a first priority
perfected security interest in the Equipment being financed by Income Fund I
under this Facility and certain related Collateral, subject to no other Liens
other than Permitted Liens, substantially in the form of Exhibit O (the
"Security Agreement (Income Fund I)"), (iii) the Security Agreement of even date
herewith between Acquisub and Agent, on behalf and for the benefit of the
Lenders, providing for the grant of a first priority perfected security interest
in substantially all of the assets of Acquisub, subject to no other Liens other
than Permitted Liens, substantially in the form of Exhibit L (the "Security
Agreement (Acquisub)"), and (iv) the Security Agreement of even date herewith
between PLMI and Agent, on behalf and for the benefit of the Lenders, providing
for the grant of a first priority perfected security interest in substantially
all of the assets of PLMI, subject to no other Liens other than Permitted Liens,
substantially in the form of Exhibit M (the "Security Agreement (PLMI)"), in
each case including all amendments, modifications and supplements thereto and
all appendices, exhibits and schedules to any of the foregoing, and shall refer
to each Security Agreement as the same may be in effect from time to time.
"SECURITY DOCUMENTS" means the Security Agreements, each chattel mortgage,
ship mortgage or similar security agreement, mortgage or other agreement or
document entered into with respect to this Agreement, each UCC-1 financing
statement delivered pursuant thereto and any and all other related documents.
"SOLVENT" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property in an orderly liquidation of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (c) such Person is able to realize upon its
Property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
"SUBORDINATION AGREEMENTS" means collectively (i) the Subordination
Agreement of even date herewith among PLMI, FSI, TEC, and IMI ("Subordinated
Lenders"), EGF VI, and Agent, substantially in the form of Exhibit I-1 (the
"Subordination Agreement (EGF VI)"), (ii) the Subordination Agreement of even
date herewith among the Subordinated Lenders, EGF VII, and Agent, substantially
in the form of Exhibit I-2 (the "Subordination Agreement (EGF VII)"), (iii) the
Subordination Agreement of even date herewith among the Subordinated Lenders,
Income Fund I, and Agent, substantially in the form of Exhibit I-3 (the
"Subordination Agreement (Income Fund I)"), and (iv) the Subordination Agreement
of even date herewith among the Subordinated Lenders, Acquisub, and Agent,
substantially in the form of Exhibit I-4 (the "Subordination Agreement
(Acquisub)"), including all amendments, modifications and supplements thereto
and all appendices, exhibits and schedules to any of the foregoing, and shall
refer to the Subordination Agreements as the same may be in effect from time to
time.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company or other business entity
(other than Equipment Growth Funds) of which an aggregate of fifty percent
(50.0%) or more of the beneficial interest (in the case of a partnership) or
fifty percent (50%) or more of the outstanding stock, units or other voting
interest having ordinary voting power to elect a majority of the directors,
managers or trustees of such Person (irrespective of whether, at the time, the
stock, units or other voting interest of any other class or classes of such
Person shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person.
"TAXES" has the meaning set forth in Section 2.14.1.
"TEC" means PLM Transportation Equipment Corporation, a California
corporation, and a wholly-owned Subsidiary of FSI.
"TERMINATION EVENT" means, with respect to any Borrower, (a) a "reportable
event" described in Section 4043 of ERISA and the regulations issued thereunder
(other than a reportable event not subject to the provision for 30-day notice to
the PBGC under such regulations), or (b) the withdrawal of such Borrower, FSI or
any of FSI's Subsidiaries or any of their ERISA Affiliates from a Pension Plan
during a plan year in which any of them was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate a Pension Plan by the PBGC, or (e) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan.
"TOTAL CASH FLOW COVERAGE RATIO" means, as measured separately for each
Equipment Growth Fund as at any date of determination, the ratio of (a)
Consolidated EBIDA of such Equipment Growth Fund adjusted for gains or losses on
the sale of Equipment in the ordinary course of business to the extent not
already taken into account in the determination of Consolidated EBIDA plus (i)
the Net Cash Proceeds From the Disposition of Equipment in the ordinary course
of business received during the four consecutive fiscal quarters ending on such
date less (ii) cash distributions to its shareholders, partners or members, as
the case may be, made during the four consecutive fiscal quarters ending on such
date, to (b) the sum of (i) the aggregate amount of principal payments on
Consolidated Funded Debt of such Equipment Growth Fund (excluding the Loans)
made during the four consecutive fiscal quarters ending on such date plus (ii)
Consolidated Interest Expense of such Equipment Growth Fund plus (iii)
twenty-five percent (25%) of the aggregate principal amount of the Loans
outstanding for such Equipment Growth Fund on such date (Consolidated EBIDA and
Consolidated Interest Expense to be measured for the four consecutive fiscal
quarters then ended on such date).
"TRAILER" means (a) vehicles having a minimum length of twenty (20) feet
used in trailer or freight car service and constructed for the transport of
commodities or containers from point to point and (b) associated equipment.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of California; provided, however, in the event that,
by reason of mandatory provisions of law, any and all of the attachment,
perfection or priority of the Lien of Agent, on behalf of Lenders, in and to the
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of California, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"USPE" means unconsolidated special purpose entity.
"UTILIZATION LEASES" means Leases for Equipment held for lease in pooling
or similar arrangements where the actual rental payments under such Lease are
based on and for the actual period of utilization of such item of Equipment
rather than the Lease term.
1.2 ACCOUNTING TERMS. Any accounting term used in this Agreement or any
other Loan Document shall have, unless otherwise specifically provided herein or
therein, the meaning customarily given such term in accordance with GAAP, and
all financial data required to be submitted by this Agreement or any other Loan
Document shall be prepared and computed, unless otherwise specifically provided
herein or therein, in accordance with GAAP. That certain terms or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. In the event that GAAP changes during the
term of this Agreement such that the covenants contained in Section 7 would then
be calculated in a different manner or with different components, (a) the
parties hereto agree to amend this Agreement in such respects as are necessary
to conform those covenants as criteria for evaluating each Borrower's financial
condition to substantially the same criteria as were effective prior to such
change in GAAP and (b) each Borrower shall be deemed to be in compliance with
the covenants contained in the aforesaid subsections during the sixty (60) day
period following any such change in GAAP if and to the extent that each Borrower
would have been in compliance therewith under GAAP as in effect immediately
prior to such change.
1.3 OTHER TERMS. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, all of which
are by this reference incorporated into this Agreement, as the same may from
time to time be amended, modified or supplemented, and not to any particular
section, subsection or clause contained in this Agreement. The term "including"
shall not be limiting or exclusive, unless specifically indicated to the
contrary. The term "or" is disjunctive; the term "and" is conjunctive. The term
"shall" is mandatory; the term "may" is permissive. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and the neuter.
1.4 SCHEDULES AND EXHIBITS. Any reference to a "Section," "Subsection,"
"Exhibit," or "Schedule" shall refer to the relevant Section or Subsection of or
Exhibit or Schedule to this Agreement, unless specifically indicated to the
contrary.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.1 COMMITMENT TO LEND.
2.1.1 Revolving Facility. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
set forth herein, Lenders hereby agree to make Advances (as defined below) of
immediately available funds to Borrowers, on a revolving basis, from the Closing
Date until the Business Day immediately preceding the Commitment Termination
Date, in the aggregate principal amount outstanding at any time not to exceed
the lesser of (a) the total Commitments for the Facility or (b) for any one
Borrower, its respective Borrowing Base (such lesser amount being the "Maximum
Availability"), as more fully set forth in this Section 2.1.1. The obligation of
Borrowers to repay the Advances made to any Borrower shall be several but not
joint.
(a) FACILITY COMMITMENTS.
(i) On the Funding Date requested by any Borrower (the
"Requesting Borrower"), after such Borrower shall have satisfied all applicable
conditions precedent set forth in Section 3, each Lender shall advance
immediately available funds to Agent (each such advance being an "Advance")
evidencing such Lender's Pro Rata Share of a loan ("Loan"). Agent shall
immediately advance such immediately available funds to such Borrower at the
Designated Deposit Account (or such other deposit account at Imperial Bank or
such other financial institution as to which such Borrower and Agent shall agree
at least three (3) Business Days prior to the requested Funding Date) on the
Funding Date with respect to such Loan. The Requesting Borrower shall pay
interest accrued on the Loan at the rates and in the manner set forth in Section
2.1.1(b). Subject to the terms and conditions of this Agreement, the unpaid
principal amount of each Loan and all unpaid interest accrued thereon, together
with all other fees, expenses, costs and other sums chargeable to the Requesting
Borrower incurred in connection therewith shall be due and payable no later than
the Maturity Date of such Loan. Each Loan advanced hereunder by each Lender
shall be evidenced by the Requesting Borrower's revolving promissory note in
favor of such Lender substantially in the form of Exhibit A (each a "Note").
(ii) The obligation of Lenders to make any Loan from time to
time hereunder shall be limited to the then applicable Maximum Availability. For
the purpose of determining the amount of the Borrowing Base available at any one
time, the amount available shall be the total amount of the Borrowing Base as
set forth in the Borrowing Base Certificate delivered to Agent pursuant to
Section 3.3.1 with respect to such requested Loan and reviewed and approved by
Agent. Nothing contained in this Agreement shall under any circumstance be
deemed to require any Lender to make any Advance under the Facility which, in
the aggregate principal amount, either (1) taking into account such Lender's
portion of the principal amounts outstanding under this Agreement and the making
of such Advance, exceeds the lesser of (A) such Lender's Commitment for the
Facility and (B) such Lender's Pro Rata Share of the Requesting Borrower's
Borrowing Base, or (2) taking into account such Lender's portion of the
aggregate principal amounts outstanding under this Agreement and the making of
such Advance, exceeds such Lender's Commitment for the Facility.
(iii) If at any time and for any reason the aggregate
principal amount of the Loan(s) then outstanding to any Borrower shall exceed
the Maximum Availability for such Borrower (the amount of such excess, if any,
being an "Overadvance"), such Borrower shall immediately repay the full amount
of such Overadvance, together with all interest accrued thereon.
(iv) Amounts borrowed by Borrowers under this Facility may
be repaid and, prior to the Commitment Termination Date and subject to the
applicable terms and conditions precedent to borrowings hereunder, reborrowed;
provided, however, that no Loan shall have a Maturity Date which is later than
the Commitment Termination Date and no LIBOR Loan shall have an Interest Period
ending after the Maturity Date or the Commitment Termination Date.
(v) Each request for a Loan hereunder shall constitute a
reaffirmation by the Requesting Borrower and the Responsible Officer requesting
the same that the representations and warranties contained in this Agreement are
true, correct and complete in all material respects to the same extent as though
made on and as of the date of the request, except to the extent such
representations and warranties specifically relate to an earlier date, in which
event they shall be true, correct and complete in all material respects as of
such earlier date.
(b) EACH LOAN. Each Loan made by Lenders hereunder shall, at the
Requesting Borrower's option in accordance with the terms of this Agreement, be
either in the form of a Base Rate Loan or a LIBOR Loan. Subject to the terms and
conditions of this Agreement, each Loan shall bear interest on the sum of the
unpaid principal balance thereof outstanding on each day from the date when
made, continued or converted until such Loan shall have been fully repaid at a
rate per annum equal to the Base Rate, as the same may fluctuate on a daily
basis, or the Adjusted LIBOR, as the case may be, plus the Applicable Margin.
Interest on each Loan funded hereunder shall be due and payable by the
Requesting Borrower in arrears on each Interest Payment Date, with all accrued
but unpaid interest on such Loan being due and payable on the date such Loan is
repaid, whether by prepayment or at maturity, and with all accrued but unpaid
interest being due and payable by the Requesting Borrower on the Maturity Date
for such Loan.
Each Advance made by a Lender as part of a Loan hereunder and all
repayments of principal with respect to such Advance shall be evidenced by
notations made by such Lender on the books and records of such Lender; provided,
however, that the failure by such Lender to make such notations shall not limit
or otherwise affect the obligations of any Borrower with respect to the
repayments of principal or payments of interest on any Advance or Loan. The
aggregate unpaid amount of each Advance set forth on the books and records of a
Lender shall be presumptive evidence of such Lender's Pro Rata Share of the
principal amount owing and unpaid by any Borrower under its Note.
(c) FEES.
(i) In connection with the extension of the Loans, the
Borrowers shall, on a joint and several basis, pay to the Agent for the account
of each Lender, on the date of execution and delivery of this Agreement, a fully
earned and non-refundable closing fee equal to 0.375% of such Lender's
Commitment.
(ii) The Borrowers shall, on a joint and several basis, pay
to the Agent for the account of each Lender a commitment fee on the average
daily unused portion of such Lender's Commitment, computed on a quarterly basis
based upon the daily utilization for that quarter as calculated by the Agent,
equal to one-half of one percent (0.50%) per annum. Such commitment fee shall
accrue from the date hereof to the Commitment Termination Date and shall be due
and payable quarterly in arrears on the last Business Day of each March, June,
September, and December, commencing on June 30, 2001 with the final payment to
be made on the Commitment Termination Date. The commitment fees provided in this
subsection shall accrue at all times after the date hereof, including at any
time during which one or more conditions in Article III are not met.
(iii) On the date of execution and delivery of this
Agreement, the Borrowers agree to pay to PFF for its own account, on a joint and
several basis, a $5,000 administrative fee.
2.1.2 FUNDING. Promptly following the receipt of such documents
required pursuant to Section 3.3.1 and approval of a Loan by Agent, Agent shall
notify by telephone, telecopier, facsimile or telex each Lender of the (a)
Requesting Borrower, (b) the principal amount (including Lender's Pro Rata Share
thereof) and (c) Funding Date of the Loan requested by such Requesting Borrower.
Not later than 1:00 p.m., California time, on the Funding Date for any Loan,
each Lender shall make an Advance to Agent for the account of Requesting
Borrower in the amount of its Pro Rata Share of the Loan being requested. Upon
satisfaction of the applicable conditions precedent set forth in Section 3, all
Advances shall be credited in immediately available funds to the Designated
Deposit Account.
2.1.3 UTILIZATION OF THE LOANS. The Loans made under the Facility may
be used solely for the purpose of financing or refinancing specific items of
Eligible Inventory; provided, however, in no event shall the proceeds of any
Loan be used to finance or refinance more than one hundred percent (100.0%) of
the Equipment Cost of any item of Eligible Inventory.
2.2 REPAYMENT AND PREPAYMENT; REDUCTION OR TERMINATION OF COMMITMENTS.
2.2.1 REPAYMENT. Unless prepaid pursuant to Section 2.2.2, the
principal amount of each Loan hereunder made to a Requesting Borrower shall be
repaid by the Requesting Borrower to Lenders not later than the Maturity Date of
such Loan.
2.2.2 VOLUNTARY PREPAYMENT. Subject to Section 2.18, any Borrower may
in the ordinary course of such Borrower's business, upon at least three (3)
Business Days' written notice, or telephonic notice promptly confirmed in
writing to Agent, which notice shall be irrevocable, prepay any Loan in whole or
in part. Such notice of prepayment shall specify the date and amount of such
prepayment and whether such prepayment is of Base Rate Loans or LIBOR Loans, or
any combination thereof. Such prepayment of Loans, together with any amounts
required pursuant to Section 2.18, shall be in immediately available funds and
delivered to Agent not later than 1:00 p.m., California time, on the date for
prepayment stated in such notice (the "Prepayment Date"). With respect to any
prepayment under this Section 2.2.2, all interest on the amount prepaid accrued
up to but excluding the date of such prepayment shall be due and payable on the
Prepayment Date.
2.2.3 MANDATORY PREPAYMENTS.
(a) In the event that any item of Eligible Inventory shall be
sold or assigned by any Borrower or any Marine Subsidiary of such Borrower, or
the ownership interests (whether stock or otherwise) of any Borrower in any
Marine Subsidiary of such Borrower owning record or beneficial title to any item
of Eligible Inventory shall be sold or transferred, then such Borrower shall
immediately prepay the Loan made with respect to such Eligible Inventory so sold
or assigned or with respect to the Eligible Inventory owned by such Marine
Subsidiary so sold or transferred, together with any accrued interest on such
Loan to the date of prepayment and any amounts required pursuant to Section
2.18. The sale or assignment of Eligible Inventory by an Owner Trustee, or the
sale or assignment of any Borrower's or any Marine Subsidiary's beneficial
interest in any owner trust (or nominee entity) holding title to Eligible
Inventory, shall be considered a sale or assignment, as the case may be, of such
Eligible Inventory by such Borrower or such Marine Subsidiary, as the case may
be.
(b) In the event that any of the Eligible Inventory shall have
sustained a Casualty Loss, the applicable Borrower shall promptly but in no
event more than ten days after such Casualty Loss notify Agent and Lenders of
such Casualty Loss and make arrangements reasonably acceptable to the Agent to
cause any and all cash proceeds received by such Borrower to be paid to Lenders
as a prepayment hereunder. To the extent not so prepaid, the Loan funded with
respect to such Eligible Inventory will nevertheless be paid by such Borrower as
provided in Section 2.2.1.
2.2.4 TERMINATION OF COMMITMENTS. Prior to the Commitment Termination
Date, the Borrowers may at any time, on not less than two Business Days' written
notice, terminate the Commitments. In such event, the Commitment Termination
Date shall be accelerated to the date of such termination and the Borrowers
shall, simultaneously with such termination, repay the Loans in full, any
accrued interest on the aggregate principal amount of the Loans to and including
the date of such termination, and any amounts required under Section 2.18, and
shall pay to the Agent for the account of each Lender a termination fee equal to
one percent (1%) of such Lender's Commitment. Any notice delivered by the
Borrowers pursuant to this Section shall be irrevocable, and any termination of
the Commitments shall be permanent.
2.3 CALCULATION OF FEES AND INTEREST; POST-MATURITY INTEREST. All
computations of fees shall be made on the basis of a 360-day year and actual
days elapsed. Fees shall accrue during each period during which such fees are
computed from the first day thereof to the last day thereof. Interest on the
Loans shall be computed on the basis of a 365/366-day year for all Base Rate
Loans and a 360-day year for all LIBOR Loans and the actual number of days
elapsed in the period during which such interest accrues. In computing interest
on any Loan, the date of the making of such Loan shall be included and the date
of payment shall be excluded. Each change in the interest rate of Base Rate
Loans based on changes in the Prime Rate or the Federal Funds Rate (as the case
may be) and each change in the Adjusted LIBOR based on changes in the Eurodollar
Reserve Percentage shall be effective on the effective date of such change and
to the extent of such change. Agent shall give Borrowers notice of any such
change in the Prime Rate or the Federal Funds Rate; provided, however, that any
failure by Agent to provide Borrowers with notice hereunder shall not affect
Agent's right to make changes in the interest rate of any Loan based on changes
in the Prime Rate or the Federal Funds Rate. Upon the occurrence and during the
continuation of any Event of Default under this Agreement, Advances under this
Agreement will, at the option of Requisite Lenders, bear interest at a rate per
annum which is determined by adding two percent (2.00%) to the Base Rate (the
"Default Rate"). This may result in the compounding of interest. The imposition
of a Default Rate will not constitute a waiver of any Event of Default.
2.4 MANNER OF PAYMENTS. All repayments or prepayments of principal and all
payments of interest, fees, costs, expenses and other sums chargeable to
Borrowers under this Agreement, the Notes or any of the other Loan Documents
shall be in lawful money of the United States of America in immediately
available funds and delivered to Agent, for the account of Lenders, not later
than 1:00 p.m., California time, on the date due at Imperial Bank, 000 Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000, Attention: Xxxxxx Xxxx, Vice
President, or such other place as shall have been designated in writing by
Agent.
2.5 PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be made under
this Agreement, the Note or any of the other Loan Documents shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall in such case be
included in the computation of the payment of interest thereon; provided,
however, that no Loan shall have remained outstanding after the Maturity Date of
such Loan.
2.6 APPLICATION OF PAYMENTS. All payments to or for the benefit of Lenders
hereunder shall be applied to the Obligations of any Borrower making payment in
the following order: (a) then due and payable fees as set forth in Section
2.1.1(c) and, at the direction of such Borrower or upon prior notice given to
such Borrower by Agent, other then due and payable fees, expenses and costs; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments; provided that if an
Event of Default shall have occurred and be continuing, Lenders shall have the
exclusive right to apply any and all such payments against the then due and
owing Obligations of such Borrower as Lenders may deem advisable. To the extent
any Borrower fails to make payment required hereunder or under any of the other
Loan Documents, each Lender is authorized to, and at its sole option may, make
such payments on behalf of such Borrower. To the extent permitted by law, all
amounts advanced by any Lender hereunder or under other provisions of the Loan
Documents shall accrue interest at the same rate as Loans hereunder.
2.7 PROCEDURE FOR THE BORROWING OF LOANS.
2.7.1 NOTICE OF BORROWING. Each borrowing of Loans shall be made upon
any Requesting Borrower's irrevocable written notice delivered to Agent in the
form of a Notice of Borrowing, executed by a Responsible Person of such
Requesting Borrower, with appropriate insertions (which Notice of Borrowing must
be received by Agent prior to 12:00 noon, San Francisco, California time, five
(5) Business Days prior to the requested Funding Date) specifying:
(a) the amount of the requested borrowing, which, if a LIBOR Loan
is requested, shall be in an aggregate minimum amount of $500,000;
(b) the requested Funding Date, which shall be a Business Day;
(c) whether the borrowing is to be comprised of one or more LIBOR
Loans or Base Rate Loans; and
(d) the duration of the Interest Period applicable to any such
LIBOR Loans included in such Notice of Borrowing. If the Notice of Borrowing
shall fail to specify the duration of the Interest Period for any borrowing
comprised of LIBOR Loans, such Interest Period shall be three (3) months.
2.7.2 UNAVAILABILITY OF LIBOR LOANS. Unless the Requisite Lenders
shall otherwise consent, during the existence of an Event of Default or
Potential Event of Default, Borrowers may not elect to have a Loan made as a
LIBOR Loan.
2.8 CONVERSION AND CONTINUATION ELECTIONS.
2.8.1 ELECTION. Each Borrower may, upon irrevocable written notice to
Agent:
(a) elect to convert on any Business Day, any Base Rate Loan (or
any portion thereof in an amount equal to at least $500,000) into a LIBOR Loan;
or
(b) elect to convert on any Interest Payment Date any LIBOR Loan
maturing on such Interest Payment Date (or any portion thereof) into a Base Rate
Loan; or
(c) elect to continue on any Interest Payment Date any LIBOR Loan
maturing on such Interest Payment Date (or any portion thereof in an amount
equal to at least $500,000);
PROVIDED, that if the aggregate amount of LIBOR Loans outstanding to such
Borrower shall have been reduced, by payment, prepayment, or conversion of
portion thereof, to be less than $500,000, such LIBOR Loans shall automatically
convert into Base Rate Loans, and on and after such date the right of such
Borrower to continue such Loans as, and convert such Loans into, LIBOR Loans
shall terminate.
2.8.2 NOTICE OF CONVERSION. Each conversion or continuation of Loans
shall be made upon any Borrower's irrevocable written notice delivered to Agent
in the form of a Notice of Conversion/Continuation, executed by a Responsible
Person of such Borrower, with appropriate insertions (which Notice of
Conversion/Continuation must be received by Lender prior to 12:00 noon, San
Francisco, California time, at least three (3) Business Days in advance of the
proposed conversion date or continuation date) specifying:
(a) the proposed conversion date or continuation date;
(b) the aggregate amount of Loans to be converted or continued;
(c) the nature of the proposed conversion or continuation; and
(d) the duration of the requested Interest Period.
2.8.3 INTEREST PERIOD. If upon the expiration of any Interest Period
applicable to any LIBOR Loan, the Requesting Borrower has failed to select a new
Interest Period to be applicable to such LIBOR Loan, such Borrower shall be
deemed to have elected to convert such LIBOR Loan into a Base Rate Loan
effective as of the last day of such current Interest Period.
2.8.4 UNAVAILABILITY OF LIBOR LOANS. Unless the Requisite Lenders
shall otherwise consent, during the existence of an Event of Default or
Potential Event of Default, Borrowers may not elect to have a Loan converted
into or continued as a LIBOR Loan.
2.9 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 LIBOR Loans in any
manner it elects, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if such Lender actually
funded and maintained each LIBOR Loan through the purchase of deposits having a
maturity corresponding to the maturity of the LIBOR Loan and bearing an interest
rate equal to the LIBOR rate (whether or not, in any instance, Lender shall have
granted any participations in such Loan). Each Lender may, if it so elects,
fulfill any commitment to make LIBOR Loans by causing a foreign branch or
affiliate to make or continue such LIBOR Loans; provided, however, that in such
event such Loans shall be deemed for the purposes of this Agreement to have been
made by such Lender, and the obligation of Borrowers to repay such Loans shall
nevertheless be to such Lender and shall be deemed held by such Lender, to the
extent of such Loans, for the account of such branch or affiliate.
2.10 DISTRIBUTION OF PAYMENTS. Agent shall immediately distribute to each
Lender, at such address as each Lender shall designate, its respective interest
in all repayments and prepayments of principal and all payments of interest and
all fees, expenses and costs received by Agent on the same day and in the same
type of funds as payment was received. In the event Agent does not distribute
such payments on the same day received, if such payments are received by Agent
by 1:00 p.m., California time, or if received after such time, on the next
succeeding Business Day, such payment shall accrue interest at the Federal Funds
Rate.
2.11 AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR ADVANCES. Unless Agent
shall have been notified by any Lender no later than the Business Day prior to
the respective Funding Date of a Loan that such Lender does not intend to make
available to Agent an Advance in immediately available funds equal to such
Lender's Pro Rata Share of the total principal amount of such Loan, Agent may
assume that such Lender has made such Advance to Agent on the date of the Loan
and Agent may, in reliance upon such assumption, make available to the
Requesting Borrower a corresponding Advance. If Agent has made funds available
to such Borrower based on such assumption and such Advance is not in fact made
to Agent by such Lender, Agent shall be entitled to recover the corresponding
amount of such Advance on demand from such Lender. If such Lender does not
promptly pay such corresponding amount upon Agent's demand, Agent shall notify
such Requesting Borrower and such Requesting Borrower shall repay such Advance
to Agent. Agent also shall be entitled to recover from such Lender interest on
such Advance in respect of each day from the date such Advance was made by Agent
to such Requesting Borrower to the date such corresponding amount is recovered
by Agent at the Federal Funds Rate. Nothing in this Section 2.11 shall be deemed
to relieve any Lender from its obligation to fulfill its Commitment or to
prejudice any rights which Agent or such Requesting Borrower may have against
such Lender as a result of any default by such Lender under this Agreement.
2.12 AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY BORROWER. Unless
Agent shall have been notified by any Borrower prior to the date on which any
payment to be made by such Borrower hereunder is due that such Borrower does not
intend to remit such payment, Agent may, in its sole discretion, assume that
such Borrower has remitted such payment when so due and Agent may, in its sole
discretion and in reliance upon such assumption, make available to each Lender
on such payment date an amount equal to such Lender's Pro Rata Share of such
assumed payment. If such Borrower has not in fact remitted such payment to
Agent, each Lender shall forthwith on demand repay to Agent the amount of such
assumed payment made available to such Lender, together with interest thereon in
respect of each date from and including the date such amount was made available
by Agent to such Lender to the date such amount is repaid to Agent at the
Federal Funds Rate.
2.13 CAPITAL REQUIREMENTS. If any Lender determines that compliance with
any law or regulation or with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law) has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of, or with
reference to, such Lender's Commitment or its making or maintaining its Pro Rata
Share of the Loans below the rate which such Lender or such other corporation
could have achieved but for such compliance (taking into account the policies of
such Lender or corporation with regard to capital), then each Borrower shall,
from time to time, upon written demand by such Lender (with a copy of such
demand to Agent), immediately pay to such Lender (a) such additional amounts as
shall be sufficient to compensate such Lender or other corporation for such
reduction resulting from such Borrower's Loans or (b) in the case where such
reduction results from compliance with any such law, regulation, guideline or
request affecting only the Commitments and not the Loans, such additional
amounts as shall be sufficient to compensate such Lender or other corporation
for such reduction based on each Borrower's percentage of average usage of the
Commitments versus the total average usage by all Borrowers. A certificate
submitted by such Lender to any Borrower, stating that the amounts set forth as
payable to such Lender are true and correct, shall be conclusive and binding for
all purposes, absent manifest error. Each Lender agrees promptly to notify
affected Borrowers and Agent of any circumstances that would cause any Borrower
to pay additional amounts pursuant to this section, provided that the failure to
give such notice shall not affect Borrowers' obligation to pay any such
additional amounts.
2.14 TAXES.
2.14.1 NO DEDUCTIONS. Subject to Section 2.14.7, any and all payments
by each Borrower to each Lender or Agent under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Lender's net income (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes").
2.14.2 MISCELLANEOUS TAXES. In addition, Borrowers shall pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
2.14.3 INDEMNITY. Subject to Section 2.14.7, each Borrower shall
indemnify and hold harmless each Lender and Agent for the full amount of Taxes
or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.14) paid by such Lender or Agent in
relation to any payments made by or Obligations of such Borrower and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within thirty (30) days from the date any Lender or Agent makes written demand
therefor.
2.14.4 REQUIRED DEDUCTIONS. If any Borrower shall be required by law
to deduct or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Lender or Agent, then, subject to Section 2.14.7:
(a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.14) such Lender or Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made;
(b) such Borrower shall make such deductions; and
(c) such Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
2.14.5 EVIDENCE OF PAYMENT. Within thirty (30) days after the date of
any payment by any Borrower of Taxes or Other Taxes, such Borrower shall furnish
to Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to Agent.
2.14.6 FOREIGN PERSONS. Each Lender which is a foreign person (i.e., a
person other than a United States person for United States Federal income tax
purposes) shall:
(a) No later than the date upon which such Lender becomes a party
hereto deliver to Borrowers through Agent two (2) accurate and complete signed
originals of IRS Form W-8ECI or any successor thereto ("Form W-8ECI"), or two
accurate and complete signed originals of IRS Form W-8BEN or any successor
thereto ("Form W-8BEN"), as appropriate, in each case indicating that such
Lender is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(b) If at any time such Lender makes any changes necessitating a
new Form W-8ECI or Form W-8BEN, with reasonable promptness deliver to Borrowers
through Agent in replacement for, or in addition to, the forms previously
delivered by it hereunder, two accurate and complete signed originals of Form
W-8ECI; or two accurate and complete signed originals of Form W-8BEN, as
appropriate, in each case indicating that the Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(c) Before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in (b) above)
requiring a change in or renewal of the most recent Form W-8ECI or Form W-8BEN
previously delivered by such Lender, deliver to Borrowers through Agent two
accurate and complete original signed copies of Form W-8ECI or Form W-8BEN in
replacement for the forms previously delivered by the Lender; and
(d) Promptly upon any Borrower's or Agent's reasonable request to
that effect, deliver to such Borrower or Agent (as the case may be) such other
forms or similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes.
2.14.7 INCOME TAXES. Borrowers will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
Section 2.14.4 to Lender for the account of any Lending Office of such Lender:
(a) If the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its obligations
under Section 2.14.6 in respect of such Lending Office;
(b) If such Lender shall have delivered to Borrowers a Form
W-8ECI in respect of such Lending Office pursuant to Section 2.14.6 and such
Lender shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by
Borrowers hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or in the official
interpretation of such law or regulations by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form W-8ECI; or
(c) If such Lender shall have delivered to Borrowers a Form
W-8BEN in respect of such Lending Office pursuant to Section 2.14.6, and such
Lender shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by
Borrowers hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or any applicable tax treaty
or regulations or in the official interpretation of any such law, treaty or
regulations by any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such Form W-8BEN.
2.14.8 REIMBURSEMENT OF COSTS. If, at any time, any Borrower requests
any Lender to deliver any forms or other documentation pursuant to Section
2.14.6(d), then such Borrower shall, on demand of such Lender through Agent,
reimburse such Lender for any costs and expenses (including reasonable attorney
fees) reasonably incurred by such Lender in the preparation or delivery of such
forms or other documentation.
2.14.9 JURISDICTION. If any Borrower is required to pay additional
amounts to any Lender or Agent pursuant to Section 2.14.4, then such Lender
shall use its reasonable good faith efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by such Borrower which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
2.15 ILLEGALITY.
2.15.1 LIBOR LOANS. If any Lender shall determine that the
introduction of any Requirement of Law, or any change in any Requirement of Law
or in the interpretation or administration thereof, has made it unlawful, or
that any central bank or other Governmental Authority has asserted that it is
unlawful, for such Lender or its Lending Office to make LIBOR Loans, then, on
notice thereof by Lender to the Requesting Borrower, the obligation of such
Lender to make LIBOR Loans shall be suspended until such Lender shall have
notified the Requesting Borrower that the circumstances giving rise to such
determination no longer exists.
2.15.2 PREPAYMENT. If a Lender shall determine that it is unlawful to
maintain any LIBOR Loan, Borrowers shall prepay in full all LIBOR Loans of such
Lender then outstanding, together with interest accrued thereon, either on the
last day of the Interest Period thereof if such Lender may lawfully continue to
maintain such LIBOR Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such LIBOR Loans, together with any amounts
required to be paid in connection therewith pursuant to Section 2.18.
2.15.3 BASE RATE BORROWING. If any Borrower is required to prepay any
LIBOR Loan immediately as provided in Section 2.15.2, then concurrently with
such prepayment, such Borrower may borrow, in the amount of such prepayment, a
Base Rate Loan.
2.16 INCREASED COSTS. If any Lender shall determine that, due to either (a)
the introduction of or any change (other than any change by way of imposition of
or increase in reserve requirements included in the calculation of the LIBOR) in
or in the interpretation of any Requirement of Law or (b) the compliance with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Loans, then Borrowers shall be liable on a joint and several basis for,
and shall from time to time, upon demand therefor by such Lender, pay to such
Lender such additional amounts as are sufficient to compensate such Lender for
such increased costs.
2.17 INABILITY TO DETERMINE RATES. If any Lender shall have determined that
for any reason adequate and reasonable means do not exist for ascertaining the
LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan or
that the LIBOR applicable for any requested Interest Period with respect to a
proposed LIBOR Loan does not adequately and fairly reflect the cost to Lenders
of funding such Loan, Agent will forthwith give notice of such determination to
Borrowers and each Lender. Thereafter, the obligation of Lenders to make or
maintain LIBOR Loans, as the case may be, hereunder shall be suspended until
Agent, upon instruction from Requisite Lenders, revokes such notice in writing.
Upon receipt of such notice, Borrowers may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted. If a Borrower does not revoke
such notice, Lenders shall make, convert or continue the Loans, as proposed by
such Borrower, in the amount specified in the applicable notice submitted by
such Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of LIBOR Loans, as the case may be.
2.18 PREPAYMENT OF LIBOR LOANS. Each Borrower agrees, severally but not
jointly, that in the event that such Borrower prepays or is required to prepay
any LIBOR Loan by acceleration or otherwise or fails to draw down or convert to
a LIBOR Loan after giving notice thereof, it shall reimburse each Lender for its
funding losses due to such prepayment or failure to draw. Borrowers and Lenders
hereby agree that such funding losses shall consist of the sum of the discounted
monthly differences for each month during the applicable or requested Interest
Period, calculated as follows for each such month:
(a) Principal amount of such LIBOR Loan times (number of days
between the date of prepayment and the last day in the applicable Interest
Period divided by 360), times the applicable Interest Differential, plus
(b) All actual out-of-pocket expenses (other than those taken
into account in the calculation of the Interest Differential) incurred by
Lenders and Agent (excluding allocation of any expense internal to Lenders and
Agent) and reasonably attributable to such payment, prepayment or failure to
draw down or convert as described above; provided that no prepayment fee shall
be payable (and no credit or rebate shall be required) if the product of the
foregoing formula is not a positive number.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT AND THE
MAKING OF LOANS.
3.1 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT. The effectiveness of
this Agreement is subject to the satisfaction of the following conditions
precedent:
3.1.1 PARTNERSHIP, COMPANY AND CORPORATE DOCUMENTS. Agent shall have
received, in form and substance satisfactory to Lenders and their respective
counsel, the following:
(a) A certified copy of the records of all actions taken by each
Loan Party, including all resolutions of each Borrower and resolutions of FSI
and each other corporate Loan Party, authorizing or relating to the execution,
delivery and performance of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby;
(b) A certificate of a Responsible Officer of each Loan Party,
stating that (A) the articles or certificate of incorporation, as the case may
be, bylaws and any other formation documents of each Loan Party attached to such
certificate are true and accurate, remain in full force and effect and have not
been amended since the date thereof and (B) each Loan Party is in good standing
under the laws of the state of its formation and each other jurisdiction where
its ownership of Property and assets or conduct of business require such
qualification;
(c) Certificates of incumbency and signature with respect to the
authorized representatives of each Loan Party executing this Agreement and the
other Loan Documents and requesting Loans; and
(d) Such other documents relating to each Loan Party as Lenders
may reasonably request.
3.1.2 NOTES. Agent shall have received Notes, in form and substance
satisfactory to Lenders, and duly executed and delivered by each Borrower.
3.1.3 OPINION OF COUNSEL. Agent shall have received an originally
executed Opinion of Counsel, in form and substance satisfactory to Lenders,
dated as of the Closing Date and addressed to Lenders, together with copies of
any officer's certificate or legal opinion of other counsel or law firm
specifically identified and expressly relied upon by such counsel. 3.1.4
Guaranty. Agent shall have received the Guaranty, in form and substance
satisfactory to Lenders, duly executed and delivered by each Guarantor.
3.1.5 SUBORDINATION AGREEMENTS. Agent shall have received the
Subordination Agreements in form and substance satisfactory to Lenders, duly
executed and delivered by each Subordinated Lender and the Borrowers.
3.1.6 INTENTIONALLY OMITTED.
3.1.7 PLMI LETTER. Agent shall have received the PLMI Letter in form
and substance satisfactory to Lenders, duly executed and delivered by PLMI.
3.1.8 BRINGDOWN CERTIFICATE. Separate certificates, dated as of the
Closing Date, of (i) a Responsible Officer of FSI, in its capacity as the sole
general partner of EGF VI and EGF VII and as the sole manager of Income Fund I
and Acquisub, and (ii) a Responsible Officer of each of the other Loan Parties,
to the effect that (i) the representations and warranties of each Borrower and
FSI contained in Section 4, and of each Loan Party in each of the other Loan
Documents, are true, accurate and complete in all material respects as of the
Closing Date as though made on such date and (ii) no Event of Default or
Potential Event of Default under this Agreement has occurred.
3.1.9 MATERIAL ADVERSE EFFECT. No event that has resulted or could
result in a Material Adverse Effect shall have occurred since December 31, 2000
(or the date of the most recently delivered audited consolidated financial
statements of PLMI, whichever is later), as determined by Agent in its sole
discretion.
3.1.10 OTHER DOCUMENTS. Agent shall have received such other
documents, information and items from Borrowers and FSI as reasonably requested
by Agent.
3.2 CONDITIONS TO INITIAL ADVANCE. Unless waived in writing by Requisite
Lenders, the obligation of any Lender to make the initial Advance is subject to
the satisfaction of the following further conditions precedent:
3.2.1 UCC TERMINATION STATEMENTS. Agent shall have received a copy of
duly filed Uniform Commercial Code termination statements with respect to the
Liens described on Schedule 3.2.1 attached hereto.
3.2.2 SECURITY DOCUMENTS (ACQUISUB). Agent shall have received the
Security Agreement (Acquisub) in form and substance satisfactory to Lenders,
duly executed and delivered by Acquisub; there shall have been filed in all
applicable jurisdictions Uniform Commercial Code financing statements naming
Acquisub as "debtor" and the Agent as "secured party" (which financing
statements shall be in form and substance acceptable to Agent) to perfect the
security interest of Agent in the Collateral described in the Security Agreement
(Acquisub) entered into by Acquisub, and there shall have been delivered to
Agent or executed, filed and/or recorded in all applicable jurisdictions such
other instruments or documents as Agent deems necessary or advisable to perfect
its security interest in such Collateral; and Agent shall have received such
Lien and judgment searches, opinions, releases, termination statements, and
other documents and instruments as Agent shall reasonably request to confirm
that Agent shall have a first priority perfected security interest in such
Collateral subject to no other Liens other than Permitted Liens.
3.2.3 SECURITY DOCUMENTS (PLMI). Agent shall have received the
Security Agreement (PLMI) in form and substance satisfactory to Lenders, duly
executed and delivered by PLMI; there shall have been filed in all applicable
jurisdictions Uniform Commercial Code financing statements naming PLMI as
"debtor" and the Agent as "secured party" (which financing statements shall be
in form and substance acceptable to Agent) to perfect the security interest of
Agent in the Collateral described in the Security Agreement (PLMI) entered into
by PLMI, and there shall have been delivered to Agent or executed, filed and/or
recorded in all applicable jurisdictions such other instruments or documents as
Agent deems necessary or advisable to perfect its security interest in such
Collateral; and Agent shall have received such Lien and judgment searches,
opinions, releases, termination statements, and other documents and instruments
as Agent shall reasonably request to confirm that Agent shall have a first
priority perfected security interest in such Collateral subject to no other
Liens other than Permitted Liens.
3.2.4 LOCKBOX AGREEMENT. Agent shall have received the Lockbox
Agreement in form and substance satisfactory to Lenders, duly executed and
delivered by Borrowers.
3.2.5 OTHER DOCUMENTS. Agent shall have received such other documents,
information and items from Borrowers and FSI as reasonably requested by Agent.
3.3 CONDITIONS TO EACH ADVANCE. Unless waived in writing by Requisite
Lenders, the obligation of any Lender to make any Advance (including the initial
Advance) is subject to the satisfaction of the following further conditions
precedent:
3.3.1 NOTICE OF BORROWING, BORROWING BASE CERTIFICATE, ETC.. At least
five (5) Business Days before each Loan hereunder with respect to any financing
or refinancing of Equipment by any Borrower, Agent shall have received (a) a
Notice of Borrowing, executed by a Responsible Officer of such Borrower, (b) a
Borrowing Base Certificate, with appropriate insertions, executed by a
Responsible Officer of such Borrower, (c) a Compliance Certificate, with
appropriate insertions, executed by a Responsible Officer of such Borrower, (d)
a Compliance Certificate, with appropriate insertions, executed by a Responsible
Officer of PLMI, (e) a description of the transaction, including (i) a listing
of all Equipment against which such Borrower is requesting that a Loan be made,
identifying each item of Equipment by serial number, registration number or
other identifying xxxx, as applicable, and indicating whether each such item is
owned by such Borrower or a Marine Subsidiary of such Borrower (or jointly by
such Borrower and one or more of the other Borrowers) or by an Owner Trustee for
the benefit of such Borrower (or the benefit of such Borrower and one or more of
the other Borrowers) (and if the latter, identifying such Owner Trustee and date
of any applicable trust or similar agreement), or a nominee entity of which such
Borrower or a Marine Subsidiary of such Borrower is the sole beneficiary or
direct or indirect owner (or is the beneficiary or direct or indirect owner
jointly with one or more of the other Borrowers), (ii) the lessee, the date of
the lease and the lease termination date, (iii) lessee financial information,
and (iv) the terms of the underlying lease; and (f) other information as may be
requested by the Agent to confirm that such Equipment satisfies the criteria for
Eligible Inventory.
3.3.2 INVOICES. At least five (5) Business Days before each Loan
hereunder with respect to any financing or refinancing of Equipment by a
Borrower, Agent shall have received invoice and such other information related
to the purchase of each item of Equipment as Agent shall reasonably request to
confirm that the proceeds of the requested Loan will not be used to finance or
refinance more than one hundred percent (100.0%) of the Equipment Cost of such
Equipment.
3.3.3 TITLE TO EQUIPMENT. At least five (5) Business Days before each
Loan hereunder with respect to any financing or refinancing of Equipment by a
Borrower, Agent shall have received such documents and copies of instruments of
title as Agent shall reasonably request to confirm that such Equipment meets the
requirements of clause (a) of the definition of "Eligible Inventory," free and
clear of any Liens or other encumbrances on title (other than Permitted Liens).
3.3.4 APPROVAL OF LOAN. Approval of such requested Loan by Agent in
its sole discretion, after review of the lessee, Equipment, Lease and any other
material circumstances relating to the Loan.
3.3.5 LEASES. Prior to the Funding Date of any such Loan, if
available, and in no event later than five (5) Business Days following such
Funding Date, Borrower shall have delivered to Agent, on behalf of Lenders,
copies of each Lease or schedules thereto or other chattel paper, if any,
relating to such Equipment and Eligible Inventory (other than with respect to
Railcars and marine containers if such Railcars or marine containers are leased
pursuant to a master lease, in which event Borrower shall deliver to Agent the
applicable schedule(s) to such master lease), against which the Loan is to be
made.
3.3.6 NO EVENT OF DEFAULT. No event shall have occurred and be
continuing or would result from the making of any Loan on such Funding Date
which constitutes an Event of Default or Potential Event of Default under this
Agreement.
3.3.7 OFFICER'S CERTIFICATE. Agent shall have received a certificate,
dated as of the Funding Date, of a Responsible Officer of FSI, in its capacity
as the sole general partner of EGF VI and EGF VII and as the sole manager of
Income Fund I, and Acquisub, and of each other Loan Party, to the effect that
(i) all representations and warranties of each Loan Party contained in the Loan
Documents are true, accurate and complete in all material respects with the same
effect as though such representations and warranties had been made on and as of
such Funding Date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they shall be true,
accurate and complete in all material respects as of such earlier date), and
(ii) from the perspective of prudent portfolio diversity and management, given
the Borrowers' then existing portfolio, such Equipment is of a type, model, age
and condition consistent with the investment objectives of the Borrowers.
3.3.8 OFFICER'S CERTIFICATE - LEASES. Agent shall have received a
certificate, dated as of the Funding Date of a Responsible Officer of such
Borrower with respect to each Lease relating to an item of Equipment being
financed with such Loan to the effect that:
(a) The Lease constitutes the entire agreement of the parties
thereto and no party thereto shall be bound except in accordance therewith;
(b) No amendments, modifications, supplements or addenda have
been made to, or schedules attached to, the Lease except as disclosed in such
certificate and the sole original thereof has been delivered to Agent;
(c) No material default exists under the Lease as of the date of
the Loan;
(d) The Lease constitutes the valid contract of such Borrower and
each lessee that is a party to the Lease, and shall at all times be enforceable
against each such lessee in accordance with its terms, subject to the
limitations on enforceability imposed by bankruptcy and creditors' rights laws
and the general principles of equity, and each party thereto has executed the
Lease with full power, authority and capacity to contract;
(e) Such Borrower is the sole record or beneficial lessor (or a
record or beneficial lessor jointly with one or more of the other Borrowers) of
the Equipment covered by the Lease;
(f) The lessee is responsible for the payment of all taxes,
insurance and similar charges so that all Lease payments will be net to such
Borrower (except with respect to Leases covering time charters for marine
vessels, railcars and trailers consistent with industry standards for such type
of leases);
(g) Such Borrower has not and will not give or loan to any lessee
that is a party to the Lease, directly or indirectly, any unpaid rent or other
amount due or to become due under the Lease; and
(h) No rentals, fees, costs, expenses or charges paid or payable
by any lessee under the Lease violate any known statute, rule, regulation, court
ruling or other regulation or limitation relating to the maximum fees, costs,
expenses or charges permitted in any state in which the Equipment is located or
in which the lessee is located, resides or is domiciled, or in which the
transaction was consummated, or in any other state which has jurisdiction of the
Equipment, Lease or lessee.
3.3.9 INSURANCE. The insurance required to be maintained by such
Borrower pursuant to the Loan Documents shall be in full force and effect.
3.3.10 OTHER INSTRUMENTS. Agent shall have received such other
instruments and documents as it may have reasonably requested from Borrowers in
connection with the Loans to be made on such date.
3.4 CONDITIONS TO EACH ADVANCE TO ACQUISUB. Unless waived in writing by
Requisite Lenders, the obligation of any Lender to make any Advance to Acquisub
(or any Marine Subsidiary or Owner Trustee of Acquisub) (including the initial
Advance) is subject to the satisfaction of the following further conditions
precedent:
3.4.1 FINANCING STATEMENTS, ETC. At least five (5) Business Days
before each Loan hereunder with respect to the financing or refinancing of
Equipment by Acquisub (or any Marine Subsidiary or Owner Trustee of Acquisub),
(i) there shall have been filed in all applicable jurisdictions Uniform
Commercial Code financing statements naming Acquisub (or if applicable, a Marine
Subsidiary or Owner Trustee of Acquisub) as "debtor" and the Agent as "secured
party" (or Uniform Commercial Code financing statement amendments, as
applicable) (which financing statements or financing statement amendments shall
be in form and substance acceptable to the Agent) to perfect the security
interest of the Agent in such Equipment and all related Collateral, (ii) there
shall have been executed, filed and/or recorded in all applicable jurisdictions
such other instruments or documents as the Agent deems necessary or advisable to
perfect its security interest in such Equipment and all related Collateral,
including without limitation, additional security agreements, ship mortgages and
chattel mortgages, and (iii) Agent shall have received such Lien and judgment
searches, opinions, releases, termination statements, and other documents and
instruments as Agent shall reasonably request to confirm that upon the
consummation of such financing or refinancing Agent shall have a first priority
perfected security interest in such Equipment and all related Collateral subject
to no other Liens other than Permitted Liens.
3.5 CONDITIONS TO EACH ADVANCE TO EGF VI. Unless waived in writing by
Requisite Lenders, the obligation of any Lender to make any Advance to EGF VI
(or any Marine Subsidiary or Owner Trustee of EGF VI) (including the initial
Advance except that the closing condition described in Section 3.5.2 shall only
apply to subsequent Advances) is subject to the satisfaction of the following
further conditions precedent:
3.5.1 SECURITY AGREEMENT (EGF VI). Agent shall have received the
Security Agreement (EGF VI) in form and substance satisfactory to Lenders, duly
executed and delivered by EGF VI and describing the Equipment being financed or
refinanced on the date of the initial Advance to EGF VI.
3.5.2 SECURITY AGREEMENT SUPPLEMENT (EGF VI). Agent shall have
received a supplement to Schedule A to the Security Agreement (EGF VI) in form
and substance satisfactory to Lenders, duly executed and delivered by EGF VI and
describing the Equipment being financed or refinanced on the date of each
subsequent Advance to EGF VI.
3.5.3 FINANCING STATEMENTS, ETC. At least five (5) Business Days
before each Loan hereunder with respect to the financing or refinancing of
Equipment by EGF VI (or any Marine Subsidiary or Owner Trustee of EGF VI), (i)
there shall have been filed in all applicable jurisdictions Uniform Commercial
Code financing statements naming EGF VI (or if applicable, a Marine Subsidiary
or Owner Trustee of EGF VI) as "debtor" and the Agent as "secured party" (or
Uniform Commercial Code financing statement amendments, as applicable) (which
financing statements or financing statement amendments shall be in form and
substance acceptable to the Agent) to perfect the security interest of the Agent
in such Equipment and all related Collateral, (ii) there shall have been
executed, filed and/or recorded in all applicable jurisdictions such other
instruments or documents as the Agent deems necessary or advisable to perfect
its security interest in such Equipment and all related Collateral, including
without limitation, additional security agreements, ship mortgages and chattel
mortgages, and (iii) Agent shall have received such Lien and judgment searches,
opinions, releases, termination statements, and other documents and instruments
as Agent shall reasonably request to confirm that upon the consummation of such
financing or refinancing Agent shall have a first priority perfected security
interest in such Equipment and all related Collateral subject to no other Liens
other than Permitted Liens.
3.6 CONDITIONS TO EACH ADVANCE TO INCOME FUND I. Unless waived in writing
by Requisite Lenders, the obligation of any Lender to make any Advance to Income
Fund I (or any Marine Subsidiary or Owner Trustee of Income Fund I) (including
the initial Advance except that the closing condition described in Section 3.6.2
shall only apply to subsequent Advances) is subject to the satisfaction of the
following further conditions precedent:
3.6.1 SECURITY AGREEMENT (INCOME FUND I). Agent shall have received
the Security Agreement (Income Fund I) in form and substance satisfactory to
Lenders, duly executed and delivered by Income Fund I and describing the
Equipment being financed or refinanced on the date of the initial Advance to
Income Fund I.
3.6.2 SECURITY AGREEMENT SUPPLEMENT (INCOME FUND I). Agent shall have
received a supplement to Schedule A to the Security Agreement (Income Fund I) in
form and substance satisfactory to Lenders, duly executed and delivered by
Income Fund I and describing the Equipment being financed or refinanced on the
date of each subsequent Advance to Income Fund I.
3.6.3 FINANCING STATEMENTS, ETC. At least five (5) Business Days
before each Loan hereunder with respect to the financing or refinancing of
Equipment by Income Fund I (or any Marine Subsidiary or Owner Trustee of Income
Fund I), (i) there shall have been filed in all applicable jurisdictions Uniform
Commercial Code financing statements naming Income Fund I (or if applicable, a
Marine Subsidiary or Owner Trustee of Income Fund I) as "debtor" and the Agent
as "secured party" (or Uniform Commercial Code financing statement amendments,
as applicable) (which financing statements or financing statement amendments
shall be in form and substance acceptable to the Agent) to perfect the security
interest of the Agent in such Equipment and all related Collateral, (ii) there
shall have been executed, filed and/or recorded in all applicable jurisdictions
such other instruments or documents as the Agent deems necessary or advisable to
perfect its security interest in such Equipment and all related Collateral,
including without limitation, additional security agreements, ship mortgages and
chattel mortgages, and (iii) Agent shall have received such Lien and judgment
searches, opinions, releases, termination statements, and other documents and
instruments as Agent shall reasonably request to confirm that upon the
consummation of such financing or refinancing Agent shall have a first priority
perfected security interest in such Equipment and all related Collateral subject
to no other Liens other than Permitted Liens.
3.6.4 KEYPORT CONSENT. Agent shall have received, in form and
substance satisfactory to Lenders and their respective counsel, a duly executed
copy of a consent signed by Keyport Life Insurance Company with respect to the
Keyport Note Agreement, consenting to the incurrence by Income Fund I of the
indebtedness hereunder and the granting by Income Fund I of the liens to Agent
pursuant to the Security Agreement (Income Fund I).
3.7 FURTHER CONDITIONS TO ALL LOANS. Notwithstanding anything to the
contrary contained in this Agreement, unless waived in writing by Requisite
Lenders, no Lender shall have any obligation hereunder to make any Advance if
any of the following events shall occur:
3.7.1 GENERAL PARTNER OR MANAGER. FSI shall have ceased to be the sole
general partner of any of EGF VI or EGF VII or the sole manager of Income Fund I
or Acquisub, whether due to the voluntary or involuntary withdrawal,
substitution, removal or transfer of FSI from or of all or any portion of FSI's
general partnership interest or capital contribution in such Borrower.
3.7.2 REMOVAL OF GENERAL PARTNER OR MANAGER. Twenty five percent
(25.0%) or more of the limited partners (measured by such partners' percentage
interest) of any Equipment Growth Fund (other than Income Fund I) shall at any
time vote to remove FSI as the general partner of such Equipment Growth Fund or
a majority in interest of Class A members, as that term is defined in the Income
Fund I Operating Agreement, of Income Fund I shall at any time vote to remove
FSI as manager of Income Fund I or FSI shall resign or be removed as sole
manager of Acquisub, in each case, regardless of whether FSI is actually
removed.
3.7.3 PURCHASER. Requesting Borrower, Acquisub, FSI or their
Subsidiaries shall have ceased to be the purchaser of Eligible Inventory for
such Requesting Borrower.
SECTION 4. BORROWERS' AND FSI'S REPRESENTATIONS AND WARRANTIES.
4.1 GENERAL REPRESENTATIONS AND WARRANTIES. Each Borrower, severally, as to
itself, but not jointly as to the other Borrowers and FSI, and FSI, jointly and
severally with each Borrower as to each such Borrower and as to itself, hereby
warrant and represent to Agent and each Lender as follows, and agree that each
of said warranties and representations shall be deemed to continue until full,
complete and indefeasible payment and performance of the Obligations and shall
apply anew to each borrowing hereunder:
4.1.1 EXISTENCE AND POWER. Each Borrower is a limited partnership or,
in the case of each of Income Fund I and Acquisub, a limited liability company,
and FSI is a corporation, each duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and is duly
qualified and licensed as a foreign corporation, partnership or limited
liability company, as applicable, and authorized to do business in each
jurisdiction within the United States where its ownership of Property and assets
or conduct of business requires such qualification. Each Borrower and FSI has
the power and authority, rights and franchises to own their Property and assets
and to carry on their businesses as now conducted. Each Borrower and FSI has the
power and authority to execute and deliver the Loan Documents (to the extent
each is a party thereto) and all other instruments and documents contemplated
hereby or thereby.
4.1.2 LOAN DOCUMENTS AND NOTES AUTHORIZED; BINDING OBLIGATIONS. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents to which any Borrower is a party and delivery and payment of such
Borrower's respective Notes have been duly authorized by all necessary and
proper action on the part of such Borrower. The execution, delivery and
performance of this Agreement and each of the other Loan Documents to which FSI
is a party have been duly authorized by all necessary and proper corporate
action on the part of FSI. The Loan Documents constitute legally valid and
binding obligations of each Borrower and FSI, as the case may be, enforceable
against each Borrower and FSI, to the extent any one of them is a party thereto,
in accordance with their respective terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally.
4.1.3 NO CONFLICT; LEGAL COMPLIANCE. The execution, delivery and
performance of this Agreement and each of the other Loan Documents, the
execution, delivery and payment of the Notes, the incurrence of Indebtedness
hereunder, and the granting of the Liens in the Collateral will not: (a) (i)
contravene any provision of FSI's certificate of incorporation or bylaws; or
(ii) contravene any provision of any Borrowers' Limited Partnership Agreements
or, in the case of each of Income Fund I and Acquisub, its respective Operating
Agreement, or other formation or organization document; (b) contravene, conflict
with or violate any applicable law or regulation, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority, which
contravention, conflict or violation, in the aggregate, may have a Material
Adverse Effect; or (c) violate or result in the breach of, or constitute a
default under (i) the Existing Note and Loan Agreements or (ii) any other
indenture or other loan or credit agreement, or other agreement or instrument
which are, in the aggregate, material and to which any Borrower or FSI is a
party or by which any Borrower, FSI or their Property and assets may be bound or
affected. Neither any Borrower nor FSI is in violation or breach of or default
under any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any contract, agreement, lease, license, indenture or
other instrument to which any one of them is a party, the non-compliance with,
the violation or breach of or the default under which would, with reasonable
likelihood, have a Material Adverse Effect.
4.1.4 FINANCIAL CONDITION. Each Borrower's and PLMI's audited
consolidated financial statements as of December 31, 2000 copies of which
heretofore have been delivered to Agent by such Borrower and PLMI, respectively,
and all other financial statements and other data submitted in writing by any
Borrower and PLMI to Agent or any Lender in connection with the request for
credit granted by this Agreement, are true, accurate and complete in all
material respects, and said financial statements and other data fairly present
the consolidated financial condition of such Borrower and PLMI, as of the date
thereof, and have been prepared in accordance with GAAP, subject to fiscal
year-end audit adjustments. There has been no material adverse change in the
business, properties or assets, operations, prospects, profitability or
financial or other condition of any Borrower or PLMI since December 31, 2000 (or
the date of the most recently delivered audited consolidated financial
statements of such Borrower or PLMI, whichever is later).
4.1.5 EXECUTIVE OFFICES. The current location of each Borrower's and
FSI's chief executive offices and principal places of business is set forth on
Schedule 4.1.5.
4.1.6 LITIGATION. Except as disclosed on Schedule 4.1.6, there are no
claims, actions, suits, proceedings or other litigation pending or, to the best
of each Borrower's and FSI's knowledge, after due inquiry, threatened against
any Borrower, FSI or any of FSI's Subsidiaries, at law or in equity before any
Governmental Authority or, to the best of each Borrower's and FSI's knowledge,
after due inquiry, any investigation by any Governmental Authority of any
Borrower's or FSI's or any of FSI's Subsidiaries' affairs, Properties or assets
which would, with reasonable likelihood, if adversely determined, have a
Material Adverse Effect. Other than any liability incident to the litigation or
proceedings disclosed on Schedule 4.1.6, neither any Borrower, nor FSI nor any
of FSI's Subsidiaries has any Contingent Obligations which are not provided for
or disclosed in the financial statements delivered to Agent pursuant to Sections
4.1.4 and 5.1.
4.1.7 MATERIAL CONTRACTS. Schedule 4.1.7 lists all currently effective
loan agreements and other contracts and agreements (whether written or oral) to
which each Borrower is a party (other than leases of equipment except for Leases
of Equipment financed or refinanced hereunder) and which (i) could involve the
payment or receipt by such Borrower after the date of this Agreement of more
than $250,000 or (ii) otherwise materially affect the business, operations or
financial condition of any Borrower (the "Material Contracts"). Except as
disclosed on Schedule 4.1.7, there are no material defaults under any such
Material Contract by any Borrower, to the best of each Borrower's knowledge, by
any other party to any such Material Contract. Each Borrower has delivered to
Agent true and correct copies of all such contracts or agreements (or, with
respect to oral contracts or agreements, written descriptions of the material
terms thereof).
4.1.8 CONSENTS AND APPROVALS. No approval, authorization or consent of
any trustee or holder of any indebtedness or obligation of any Borrower or of
any other Person under any such material agreement, contract, lease or license
or similar document or instrument to which such Borrower is a party or by which
such Borrower is bound, is required to be obtained by such Borrower in order to
make or consummate the transactions contemplated under the Loan Documents.
Except as set forth in Schedule 4.1.8, all consents and approvals of, filings
and registrations with, and other actions in respect of, all Governmental
Authorities required to be obtained by any Borrower, FSI or any of FSI's
Subsidiaries in order to make or consummate the transactions contemplated under
the Loan Documents have been, or prior to the time when required will have been,
obtained, given, filed or taken and are or will be in full force and effect.
4.1.9 OTHER AGREEMENTS. Neither any Borrower, FSI nor any of FSI's
Subsidiaries is a party to or is bound by any agreement, contract, lease,
license or instrument, or is subject to any restriction under its respective
charter or formation documents, which has, or is likely in the foreseeable
future to have, a Material Adverse Effect. Neither any Borrower nor FSI has
entered into and, as of the Closing Date does not contemplate entering into, any
material agreement or contract with any Affiliate of any Borrower or FSI on
terms that are less favorable to such Borrower or FSI than those that might be
obtained at the time from Persons who are not such Affiliates.
4.1.10 EMPLOYMENT AND LABOR AGREEMENTS. There are no collective
bargaining agreements or other labor agreements covering any employees of any
Borrower, FSI or any of FSI's Subsidiaries.
4.1.11 ERISA. No Borrower has an Employee Benefit Plan subject to
ERISA. All Pension Plans of FSI and any of FSI's Subsidiaries that are intended
to be qualified under Section 401(a) of the Code have been determined by the IRS
to be qualified or FSI or any of FSI's Subsidiaries will obtain such
determination prior to instituting such a Pension Plan. All Pension Plans
existing as of the date hereof continue to be so qualified. No "reportable
event" (as defined in Section 4043 of ERISA) has occurred and is continuing with
respect to any Pension Plan for which the thirty-day notice requirement may not
be waived other than those of which the appropriate Governmental Authority has
been notified. All Employee Benefit Plans of FSI or any of FSI's Subsidiaries
have been operated in all material respects in accordance with their terms and
applicable law, including ERISA, and no "prohibited transaction" (as defined in
ERISA and the Code) that would result in any material liability to FSI or any of
FSI's Subsidiaries has occurred with respect to any such Employee Benefit Plan.
4.1.12 LABOR MATTERS. There are no strikes or other labor disputes
against any Borrower, FSI or any of FSI's Subsidiaries or, to the best of each
Borrower's and FSI's knowledge, after due inquiry, threatened against any
Borrower, FSI or any of FSI's Subsidiaries, which would, with reasonable
likelihood, have a Material Adverse Effect. All payments due from any Borrower
or FSI on account of employee health and welfare insurance which would, with
reasonable likelihood, have a Material Adverse Effect if not paid have been paid
or, if not due, accrued as a liability on the books of such Borrower or FSI.
4.1.13 MARGIN REGULATIONS. Neither any Borrower nor FSI owns any
"margin security", as that term is defined in Regulation U of the Federal
Reserve Board, and the proceeds of the Loans under this Agreement will be used
only for the purposes contemplated hereunder. None of the Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the Loans under this Agreement to be considered
a "purpose credit" within the meaning of Regulations T, U and X. Neither any
Borrower nor FSI will take or permit any agent acting on its behalf to take any
action which might cause this Agreement or any document or instrument delivered
pursuant hereto to violate any regulation of the Federal Reserve Board.
4.1.14 TAXES. All federal, state, local and foreign tax returns,
reports and statements required to be filed by any Borrower, FSI and, to the
best of each Borrower's and FSI's knowledge, after due inquiry, by any of FSI's
Subsidiaries have been filed with the appropriate Governmental Authorities where
failure to file would, with reasonable likelihood, have a Material Adverse
Effect, and all material Charges and other impositions shown thereon to be due
and payable by any Borrower, FSI or such Subsidiary have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof, or any such fine, penalty, interest, late charge or loss
has been paid, or such Borrower, FSI or such Subsidiary is contesting its
liability therefore in good faith and has fully reserved all such amounts
according to GAAP in the financial statements provided to Agent pursuant to
Section 5.1. Each Borrower, FSI and, to the best of each Borrower's and FSI's
knowledge, after due inquiry, each of FSI's Subsidiaries has paid when due and
payable all material Charges upon the books of any Borrower, FSI or such
Subsidiary and no Government Authority has asserted any Lien against any
Borrower, FSI or any of FSI's Subsidiaries with respect to unpaid Charges.
Proper and accurate amounts have been withheld by each Borrower, FSI and, to the
best of each Borrower's and FSI's knowledge, after due inquiry, each of FSI's
Subsidiaries from its employees for all periods in full and complete compliance
with the tax, social security and unemployment withholding provisions of
applicable federal, state, local and foreign law and such withholdings have been
timely paid to the respective Governmental Authorities.
4.1.15 ENVIRONMENTAL QUALITY.
(a) Except as specifically disclosed in Schedule 4.1.15, the
on-going operations of each Borrower, FSI and each of FSI's Subsidiaries comply
in all material respects with all Environmental Laws, except such non-compliance
which would not (if enforced in accordance with applicable law) result in
liability in excess of $250,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 4.1.15, each
Borrower, FSI and each of FSI's Subsidiaries has obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for its ordinary course operations, all
such Environmental Permits are in good standing, and each Borrower, FSI and each
of FSI's Subsidiaries is in compliance with all material terms and conditions of
such Environmental Permits.
(c) Except as specifically disclosed in Schedule 4.1.15, neither
any Borrower, FSI or any of FSI's Subsidiaries nor any of their respective
present Property or operations is subject to any outstanding written order from
or agreement with any Governmental Authority nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in Schedule 4.1.15, there
are no Hazardous Materials or other conditions or circumstances existing with
respect to any Property, or arising from operations prior to the Closing Date,
of any Borrower, FSI or any of FSI's Subsidiaries that would reasonably be
expected to give rise to Environmental Claims with a potential liability of any
Borrower, FSI or any of FSI's Subsidiaries in excess of $250,000 in the
aggregate for any such condition, circumstance or Property.
4.1.16 TRADEMARKS, PATENTS, COPYRIGHTS, FRANCHISES AND LICENSES. Each
Borrower and FSI and, to the best of their knowledge, after due inquiry, each of
FSI's Subsidiaries possess and owns all necessary trademarks, trade names,
copyrights, patents, patent rights, franchises and licenses which are material
to the conduct of their business as now operated.
4.1.17 FULL DISCLOSURE. As of the Closing Date, no information
contained in this Agreement, the other Loan Documents or any other documents or
written materials furnished by or on behalf of any Borrower or FSI to Agent or
any Lender pursuant to the terms of this Agreement or any of the other Loan
Documents contains any untrue or inaccurate statement of a material fact or
omits to state a material fact necessary to make the statement contained herein
or therein not misleading in light of the circumstances under which made.
4.1.18 OTHER REGULATIONS. Neither any Borrower nor FSI is: (a) a
"public utility company" or a "holding company," or an "affiliate" or a
"subsidiary company" of a "holding company," or an "affiliate" of such a
"subsidiary company," as such terms are defined in the Public Utility Holding
Company Act or (b) an "investment company," or an "affiliated person" of, or a
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act. The making of the Loans
hereunder and the application of the proceeds and repayment thereof by each
Borrower and the performance of the transactions contemplated by this Agreement
and the other Loan Documents will not violate any provision of the Investment
Company Act or the Public Utility Holding Company Act, or any rule, regulation
or order issued by the SEC thereunder.
4.1.19 SOLVENCY. Each Borrower and FSI are Solvent.
4.2 REPRESENTATIONS AND WARRANTIES AT TIME OF FIRST ADVANCE. At the time
any Borrower makes a request for an initial borrowing hereunder, each such
Borrower, severally, as to itself, but not jointly as to the other Borrowers and
FSI, and FSI, jointly and severally with each Borrower as to each such Borrower
and as to itself, hereby warrant and represent to Agent and each Lender as
follows, and agree that each of said warranties and representations shall be
deemed to continue until full, complete and indefeasible payment and performance
of the Obligations and shall apply anew to each additional borrowing hereunder:
4.2.1 POWER AND AUTHORITY. Each Borrower and FSI has the power and
authority to perform the terms of the Loan Documents (to the extent each is a
party thereto) and all other instruments and documents contemplated hereby or
thereby.
4.2.2 NO CONFLICT. The performance of this Agreement, and each of the
other Loan Documents and the payment of the Notes will not violate or result in
the breach of, or constitute a default under any indenture or other loan or
credit agreement, or other agreement or instrument which are, in the aggregate,
material and to which any Borrower or FSI is a party or by which any Borrower,
FSI or their Property and assets may be bound or affected.
4.2.3 CONSENTS AND APPROVALS. No approval, authorization or consent of
any trustee or holder of any indebtedness or obligation of any Borrower or FSI
or of any other Person under any such material agreement, contract, lease or
license or similar document or instrument to which such Borrower, FSI or any of
FSI's Subsidiaries is a party or by which such Borrower, FSI or any such
Subsidiary is bound, is required to be obtained by any such Borrower, FSI or any
such Subsidiary in order to make or consummate the transactions contemplated
under the Loan Documents.
4.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. So long as any of the
Commitments shall be available and until payment and performance in full of the
Obligations, the representations and warranties contained herein shall have a
continuing effect as having been true when made.
SECTION 5. BORROWERS' AND FSI'S AFFIRMATIVE COVENANTS.
Each Borrower, severally, as to itself, but not jointly as to the other
Borrowers and FSI, and FSI, jointly and severally with each Borrower as to each
Borrower and as to itself (and, where applicable, PLMI) covenant and agree that,
so long as any of the Commitments shall be available and until full, complete
and indefeasible payment and performance of the Obligations, unless Requisite
Lenders shall otherwise consent in writing, each Borrower and FSI shall do or
cause to have done all of the following:
5.1 RECORDS AND REPORTS. Maintain, and cause each of FSI's Subsidiaries to
maintain, a system of accounting administered in accordance with sound business
practices to permit preparation of financial statements in conformity with GAAP,
and deliver to Agent or cause to be delivered to Agent:
5.1.1 QUARTERLY STATEMENTS. As soon as practicable and in any event
within forty-five (45) days after the end of each quarterly accounting period of
each Borrower (other than Acquisub), FSI and PLMI, except with respect to the
final fiscal quarter of each fiscal year, consolidated and consolidating balance
sheets of FSI and PLMI and a consolidated balance sheet of each Borrower (other
than Acquisub) as at the end of such period and the related consolidated (and,
as to statements of income only for FSI, consolidating) statements of income and
stockholders' or members' equity of each Borrower (other than Acquisub) and FSI
and the related consolidated statements of income, stockholders' or members'
equity and cash flows of PLMI (and, as to statements of income only,
consolidating) for such quarterly accounting period, setting forth in each case
in comparative form the consolidated figures for the corresponding periods of
the previous year, all in reasonable detail and certified by a Responsible
Officer of each Borrower, FSI and PLMI that they (i) are complete and fairly
present the financial condition of such Borrower, FSI and PLMI as at the dates
indicated and the results of their operations and changes in their cash flow for
the periods indicated, (ii) disclose all liabilities of such Borrower, FSI and
PLMI that are required to be reflected or reserved against under GAAP, whether
liquidated or unliquidated, fixed or contingent and (iii) have been prepared in
accordance with GAAP, subject to changes resulting from audit and normal
year-end adjustment;
5.1.2 ANNUAL STATEMENTS. As soon as practicable and in any event
within ninety (90) days after the end of each fiscal year of each Borrower
(other than Acquisub) and PLMI, consolidated and consolidating balance sheets of
PLMI and a consolidated balance sheet of each Borrower (other than Acquisub) as
at the end of such year and the related consolidated (and, as to statements of
income only for PLMI, consolidating) statements of income, stockholders' or
members' equity and cash flows of each Borrower (other than Acquisub), if
applicable, and PLMI for such fiscal year, setting forth in each case, in
comparative form the consolidated figures for the previous year, all in
reasonable detail and (i) in the case of such consolidated financial statements,
accompanied by a report thereon of an independent public accountant of
recognized national standing selected by each such Borrower and PLMI and
satisfactory to Agent, which report shall contain an opinion which is not
qualified in any manner or which otherwise is satisfactory to Requisite Lenders,
in their sole discretion, and (ii) in the case of such consolidating financial
statements, certified by a Responsible Officer of PLMI;
5.1.3 BORROWING BASE CERTIFICATE. As soon as practicable, and in any
event not later than thirty (30) days after the end of each calendar month in
which a Loan has been, or is, outstanding, a Borrowing Base Certificate dated as
of the last day of such month, duly executed by a Responsible Officer of each
Borrower or of the general partner or manager thereof, with appropriate
insertions;
5.1.4 COMPLIANCE CERTIFICATE. As soon as practicable, and in any event
not later than forty-five (45) days after the end of each fiscal quarter of each
Borrower (other than Acquisub), except with respect to the final fiscal quarter
of each fiscal year, in which case as soon as practicable and in any event
within ninety (90) days after the end of such fiscal quarter, a Compliance
Certificate dated as of the last day of such fiscal quarter, and executed by a
Responsible Officer of such Borrower, with appropriate insertions;
5.1.5 REPORTS. At Agent's request, promptly upon receipt thereof,
copies of all reports submitted to each Borrower, FSI or PLMI by independent
public accountants in connection with each annual, interim or special audit of
the financial statements of such Borrower, FSI or PLMI made by such accountants;
5.1.6 INSURANCE REPORTS. (i) On the date six months after the Closing
Date and thereafter upon Agent's reasonable request, which request will not be
made more than once during any calendar year (unless an Event of Default shall
have occurred and be continuing, in which event such limitation shall not
apply), a report from each Borrower's insurance broker, in such detail as Agent
may reasonably request, as to the insurance maintained or caused to be
maintained by each Borrower pursuant to this Agreement, demonstrating compliance
with the requirements hereof and thereof, and (ii) as soon as possible and in no
event later than fifteen (15) days prior to the expiration date of any insurance
policy of any Borrower, a written confirmation that such policy is in process of
renewal and is not terminated or subject to a notice of non-renewal from such
Borrower's insurance broker; provided, however, that such Borrower shall give
Agent prompt written notice if changes affecting risk coverage will be made to
such policy or if the policy will be canceled;
5.1.7 CERTIFICATE OF RESPONSIBLE OFFICER. Promptly upon any officer of
any Borrower or FSI obtaining knowledge (a) of any condition or event which
constitutes an Event of Default or Potential Event of Default under this
Agreement, (b) that any Person has given any notice to any Borrower, FSI, TEC,
or PLMI or taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 8.1.2, (c) of the institution of
any litigation or of the receipt of written notice from any Governmental
Authority as to the commencement of any formal investigation involving an
alleged or asserted liability of Acquisub of any amount and of any Borrower
other than Acquisub, FSI, TEC, or PLMI equal to or greater than $500,000 or any
adverse judgment in any litigation involving a potential liability of Acquisub
of any amount and of any Borrower other than Acquisub, FSI, TEC, or PLMI equal
to or greater than $500,000, or (d) of a material adverse change in the
business, operations, properties, assets or condition (financial or otherwise)
of any Borrower, FSI, TEC, or PLMI, a certificate of a Responsible Officer of
any Borrower or FSI, as applicable, specifying the notice given or action taken
by such Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition and what action such Borrower,
FSI, TEC, or PLMI has taken, is taking and proposes to take with respect
thereto;
5.1.8 EMPLOYEE BENEFIT PLANS. Promptly upon becoming aware of the
occurrence of any (a) Termination Event in connection with any Pension Plan or
(b) "prohibited transaction" (as such term is defined in ERISA and the Code) in
connection with any Employee Benefit Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action any Borrower or any of
its ERISA Affiliates has taken, is taking or proposes to take with respect
thereto, and, when known, any action taken or threatened by the IRS or the PBGC
with respect thereto;
5.1.9 ERISA NOTICES. With reasonable promptness, copies of (a) all
notices received by any Borrower, FSI, any of FSI's Subsidiaries or any of their
ERISA Affiliates of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (b) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by any Borrower, FSI,
any of FSI's Subsidiaries or any of their ERISA Affiliates with the IRS with
respect to each Pension Plan covering employees of any Borrower, FSI or any of
FSI's Subsidiaries, and (c) all notices received by any Borrower, FSI, any of
FSI's Subsidiaries or any of their ERISA Affiliates from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA;
5.1.10 PENSION PLANS. Promptly upon receipt by any Borrower, FSI or
any of FSI's Subsidiaries, any challenge by the IRS to the qualification under
Section 401 or 501 of the Code of any Pension Plan;
5.1.11 SEC REPORTS. As soon as available and in no event later than
five (5) days after the same shall have been filed with the SEC, a copy of each
Form 8-K Current Report, Form 10-K Annual Report, Form 10-Q Quarterly Report,
Annual Report to Shareholders, Proxy Statement and Registration Statement of any
Borrower and PLMI;
5.1.12 TAX RETURNS. Upon the request of Agent, copies of all federal,
state, local and foreign tax returns and reports in respect of income, franchise
or other taxes on or measured by income (excluding sales, use or like taxes)
filed by or on behalf of any Borrower, FSI, TEC and PLMI; and
5.1.13 ADDITIONAL INFORMATION. Such other information respecting the
condition or operations, financial or otherwise, of any Borrower and PLMI and
its Subsidiaries as Agent or any Lender may from time to time reasonably
request, and such information regarding the lessees under Leases as any Borrower
from time to time receives or Agent or any Lender reasonably requests.
All financial statements of Borrowers, FSI and PLMI to be delivered by any
Borrower and FSI to Agent pursuant to this Section 5.1 will be complete and
correct and present fairly the financial condition of each Borrower, FSI and
PLMI as of the date thereof; will disclose all liabilities of each Borrower, FSI
and PLMI that are required to be reflected or reserved against under GAAP,
whether liquidated or unliquidated, fixed or contingent; and will have been
prepared in accordance with GAAP. All tax returns submitted to Agent by
Borrowers and FSI will, to the best of each Borrower's and FSI's knowledge,
after due inquiry, be true and correct. Each Borrower and FSI hereby agree that
each time any one of them submits a financial statement or tax return to Agent,
such Borrower and FSI shall be deemed to represent and warrant to Lenders that
such financial statement or tax return complies with all of the preceding
requirements set forth in this paragraph.
5.2 EXISTENCE; COMPLIANCE WITH LAW. Each Borrower and FSI shall preserve
and maintain, and FSI shall cause each of FSI's Subsidiaries to preserve and
maintain, their existence and all of their licenses, permits, governmental
approvals, rights, privileges and franchises necessary or desirable in the
normal conduct of their businesses as now conducted or presently proposed to be
conducted (including, without limitation, their qualification to do business in
each jurisdiction in which such qualification is necessary or desirable in view
of its business); conduct, and cause each of FSI's Subsidiaries and any Owner
Trustee to conduct, its business in an orderly and regular manner; and comply,
and cause each of FSI's Subsidiaries, and any Owner Trustee, to comply, with (a)
as to any Borrower, its Limited Partnership Agreement, Operating Agreement,
articles of incorporation and bylaws, and other organizational documents, as
applicable, and as to FSI and each of its Subsidiaries, the provisions of its
respective certificate or articles of incorporation, as applicable, and bylaws
and (b) the requirements of all applicable laws, rules, regulations or orders of
any Governmental Authority and requirements for the maintenance of any
Borrower's, FSI's or such Subsidiary's insurance, licenses, permits,
governmental approvals, rights, privileges and franchises, except, in either
case, to the extent that the failure to comply therewith would not, in the
aggregate, with reasonable likelihood, have a Material Adverse Effect.
5.3 INSURANCE. Each Borrower and FSI shall maintain and keep in force, and
cause each of FSI's Subsidiaries to maintain and keep in force, insurance of the
types and in amounts then customarily carried in lines of business similar to
that of Borrowers, FSI or any of FSI's Subsidiaries as the case may be,
including, but not limited to, fire, extended coverage, public liability,
property damage, environmental hazard and workers' compensation, in each case
carried with financially sound Persons and in amounts satisfactory to Requisite
Lenders (subject to commercial reasonableness as to each type of insurance);
provided, however, that the types and amounts of insurance shall not provide any
less coverage for any Borrower than provided as of the Closing Date by the
existing blanket policies of insurance for PLMI and its Subsidiaries. All
policies of property insurance shall carry endorsements naming Agent as
principal loss payee as to any property owned by Borrowers and financed by
Lenders and all policies of liability insurance shall carry endorsements naming
Agent and each Lender as an additional insured, and in each case indicating that
(a) any loss thereunder shall be payable to Agent or Lenders, as the case may
be, notwithstanding any action, inaction or breach of representation or warranty
by any Borrower or FSI; (b) there shall be no recourse against any Lender for
payment of premiums or other amounts with respect thereto, and (c) at least
fifteen (15) days' prior written notice of cancellation, lapse or material
change in coverage shall be given to Agent by the insurer.
5.4 TAXES AND OTHER LIABILITIES. Promptly pay and discharge and cause each
of FSI's Subsidiaries, promptly to pay and discharge all material Charges when
due and payable, except (a) such as may be paid thereafter without penalty or
(b) such as may be contested in good faith by appropriate proceedings and for
which an adequate reserve has been established and is maintained in accordance
with GAAP. Each Borrower and FSI shall promptly notify Agent of any material
challenge, contest or proceeding pending by or against any Borrower or FSI or
against PLMI or any of its other Subsidiaries before any taxing authority.
5.5 INSPECTION RIGHTS; ASSISTANCE. At any reasonable time and from time to
time during normal business hours, permit Agent or any Lender or any agent,
representative or employee thereof, to examine and make copies of and abstracts
from the financial records and books of account of each Borrower, FSI or any of
FSI's Subsidiaries, and other documents in the possession or under the control
of any Borrower, FSI or any of FSI's Subsidiaries, including relating to any
obligation of any Borrower or FSI arising under or contemplated by this
Agreement and to visit the offices of any Borrower or FSI to discuss the
affairs, finances and accounts of any Borrower or FSI with any of the officers
of any Borrower or FSI, and, upon reasonable notice and during normal business
hours (unless an Event of Default or Potential Event of Default shall have
occurred and be continuing, in which event no notice is required), to conduct
audits of and appraise the Equipment. Such audits and appraisals shall be
subject to the lessee's right to quiet enjoyment as set forth in the respective
Lease.
5.6 MAINTENANCE OF FACILITIES; MODIFICATIONS; PERFORMANCE OF LEASES.
5.6.1 MAINTENANCE OF FACILITIES. Each Borrower and FSI shall keep and
cause each of FSI's Subsidiaries to keep, all of their respective Properties
which are useful or necessary to such Borrower's, FSI's or such Subsidiary's
business, in good repair and condition, normal wear and tear excepted, and from
time to time make, and cause each such Subsidiary to make necessary repairs
thereto, and renewals and replacements thereof so that each Borrower's, FSI's or
such Subsidiary's Properties shall be fully and efficiently preserved and
maintained.
5.6.2 CERTAIN MODIFICATIONS TO THE EQUIPMENT. Subject to Section
5.6.1, each Borrower and FSI shall promptly make, or cause to be made, all
modifications, additions and adjustments to the Eligible Inventory as may from
time to time be required by any Governmental Authority having jurisdiction over
the operation, safety or use thereof.
5.6.3 PERFORMANCE OF LEASES. Borrower shall timely perform in all
material respects each of its covenants and obligations under the Leases to
which it is a party.
5.7 SUPPLEMENTAL DISCLOSURE. From time to time as may be necessary (in the
event that such information is not otherwise delivered by Borrowers or FSI to
Agent or Lenders pursuant to this Agreement), so long as there are Obligations
outstanding hereunder, disclose to Agent in writing any material matter
hereafter arising which, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described by any Borrower or FSI in
this Agreement or any of the other Loan Documents (including all Schedules and
Exhibits hereto or thereto) or which is necessary to correct any information set
forth or described by Borrowers or FSI hereunder or thereunder or in connection
herewith which has been rendered inaccurate thereby.
5.8 FURTHER ASSURANCES.
5.8.1 In addition to the obligations and documents which this
Agreement expressly requires Borrowers or FSI to execute, deliver and perform,
each Borrower or FSI shall execute, deliver and perform, and shall cause FSI's
Subsidiaries to execute, deliver and perform, any and all further acts or
documents which Agent or Lenders may reasonably require to effectuate the
purposes of this Agreement or any of the other Loan Documents.
5.8.2 Without limiting Section 5.8.1, promptly upon request by the
Agent or the Requisite Lenders, each Borrower and FSI shall do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Requisite Lenders, as the case may be, may reasonably require from time to time
in order (i) to carry out more effectively, the purposes of this Agreement or
any other Loan Document, (ii) to subject to the Liens created by any of the
Security Documents any of the properties, rights or interests covered by any of
the Security Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Security Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Agent and the Lenders the
rights granted or now or hereafter intended to be granted to the Lenders under
any Loan Document or under any other document executed in connection therewith.
Upon a Potential Event of Default or an Event of Default, each of the Borrowers
and FSI hereby authorizes the Agent, in such jurisdictions where such action is
authorized by law, to effect any such recordations, filings or registrations of
financing statements and other instruments and documents without the signature
of such Borrower or FSI thereto.
5.9 LOCKBOX. Each Borrower shall, unless otherwise directed in writing by
Agent, cause all remittances made by the obligor under any Lease to be made to a
lock box (the "Lockbox") maintained with Imperial Bank pursuant to the Lockbox
Agreement. Unless otherwise directed by Agent in writing, all invoices and other
instructions submitted by any Borrower to the obligor relating to Lease payments
shall designate the Lockbox as the place to which such payments shall be made.
5.10 ENVIRONMENTAL LAWS. Each Borrower and FSI shall, and FSI shall cause
each of its Subsidiaries to, conduct its operations and keep and maintain its
Property in material compliance with all Environmental Laws.
5.11 EQUIPMENT PURCHASE AGREEMENT. Acquisub shall, upon the request of
Agent, which request may be made with respect to any Loan made to Acquisub on or
after the date which is one hundred twenty (120) days after the Funding Date of
such Loan, deliver to Agent an Equipment Purchase Agreement with respect to the
Equipment against which such Loan was made.
5.12 OPERATING RELATIONSHIP. On or prior to the Closing Date, the Borrowers
will transfer all of their primary depositary and operating accounts which are
currently maintained with First Union National Bank to Imperial Bank, and
thereafter shall maintain all of their primary depositary and operating accounts
with Imperial Bank. In addition, (i) as soon as practicable after the Closing
Date, and provided that Imperial Bank offers comparable services, the Borrowers
will transfer all of their depositary and operating accounts which are currently
maintained with Sanwa Bank to Imperial Bank, and thereafter shall maintain all
such accounts with Imperial Bank, and (ii) commencing on the Closing Date, the
Borrowers will maintain on deposit with PFF non-interest bearing demand deposit
balances of not less than $300,000. All deposit balances shall be calculated
after reduction for the reserve requirement of the Federal Reserve Board and
uncollected funds. Any deficiencies therein shall be charged directly to the
Borrowers on a monthly basis.
SECTION 6. BORROWER'S AND FSI'S NEGATIVE COVENANTS.
So long as any of the Commitments shall be available and until full,
complete and indefeasible payment and performance of the Obligations, unless
Requisite Lenders shall otherwise consent in writing, each Borrower, severally,
as to itself, but not jointly as to the other Borrowers and FSI, and FSI,
jointly and severally with each Borrower as to such Borrower and to itself,
covenants and agrees as follows:
6.1 LIENS; NEGATIVE PLEDGES; AND ENCUMBRANCES. No Borrower shall create,
incur, assume or suffer to exist, or shall permit any Marine Subsidiary of such
Borrower or Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower (or jointly with one or more other
Borrowers) to create, incur, assume or suffer to exist, and FSI shall not permit
any of its Subsidiaries (including, without limitation, TEC) to create, incur,
assume or suffer to exist, any Lien of any nature upon or with respect to any of
their respective Property, whether now or hereafter owned, leased or acquired,
except (collectively, the "Permitted Liens"):
6.1.1 Existing Liens disclosed on Schedule 6.1, provided that the
obligations secured thereby are not increased;
6.1.2 Liens for Charges if payment shall not at the time be required
to be made in accordance with Section 5.4;
6.1.3 Liens in respect of pledges, obligations or deposits (a) under
workers' compensation laws, unemployment insurance and other types of social
security or similar legislation, (b) in connection with surety, appeal and
similar bonds incidental to the conduct of litigation, (c) in connection with
bid, performance or similar bonds and mechanics', laborers' and materialmen's
and similar statutory Liens not then delinquent, or (d) incidental to the
conduct of the business of such Borrower, any Marine Subsidiary of such
Borrower, or any Owner Trustee or any of FSI's Subsidiaries and which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit; provided that the Liens permitted by this Section 6.1.3 do not in the
aggregate materially detract from the value of any assets or property of or
materially impair the use thereof in the operation of the business of such
Borrower, any Owner Trustee or any of FSI's Subsidiaries; and provided further
that the adverse determination of any claim or liability, contingent or
otherwise, secured by any of such Liens would not either individually or in the
aggregate, with reasonable likelihood, have a Material Adverse Effect;
6.1.4 Permitted Rights of Others; and
6.1.5 Liens granted in favor of Agent on behalf of Lenders pursuant to
the Security Documents.
6.2 ACQUISITIONS. No Borrower shall, or shall permit any Marine Subsidiary
of such Borrower to, and FSI shall not permit TEC to, make any Acquisition or
enter into any agreement to make any Acquisition, other than with respect to the
purchase of Equipment in the ordinary course of business and the formation or
acquisition of a Marine Subsidiary.
6.3 LIMITATIONS ON INDEBTEDNESS. No Borrower shall create, incur, assume or
suffer to exist, nor permit any Marine Subsidiary of such Borrower or Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower (or jointly with one or more other Borrowers) to
create, incur, assume or suffer to exist, and FSI shall not permit any of its
Subsidiaries (including, without limitation, TEC) to create, incur, assume or
suffer to exist, any Indebtedness or Contingent Obligation; provided, however,
that this Section 6.3 shall not be deemed to prohibit:
6.3.1 The Obligations to Lenders and Agent arising hereunder and under
the other Loan Documents;
6.3.2 Existing Indebtedness disclosed on Schedule 6.3(a) and
anticipated Indebtedness disclosed on Schedule 6.3(b);
6.3.3 Indebtedness of any Subsidiary of FSI (other than Acquisub),
provided that such Indebtedness is non-recourse as to FSI and TEC;
6.3.4 The acquisition of goods, supplies or merchandise on normal
trade credit;
6.3.5 The endorsement of negotiable instruments received in the
ordinary course of any Borrower's business as presently conducted;
6.3.6 With the prior written consent of Agent, Indebtedness incurred
in respect of the deferred purchase price for an item of Eligible Inventory to
be financed with the proceeds of a Loan hereunder, but only to the extent that
the incurrence of such Indebtedness is customary in the industry with respect to
the purchase of this type of equipment (provided that such Indebtedness shall
only be permitted under this Section 6.3.6 if, taking into account the
incurrence of such Indebtedness, the Borrower incurring such Indebtedness shall
not be in violation of any of the financial covenants set forth in Section 7 if
measured as of the date of incurrence as determined by GAAP); and
6.3.7 Any Guaranty Obligations of any Borrower in the form of
performance guaranties undertaken on behalf of a Marine Subsidiary of such
Borrower in favor of the charter party in connection with the leasing of a
marine vessel on a time charter.
6.4 USE OF PROCEEDS. No Borrower shall, and FSI shall not, nor shall any
Borrower or FSI permit any Marine Subsidiary of such Borrower or Owner Trustee
holding record title to any Eligible Inventory for the beneficial interest of
such Borrower (or jointly with one or more other Borrowers) to, use the proceeds
of any Loan except for the purpose set forth in Section 2.1.3, and, except as
set forth in Section 2.1.3, no Borrower shall, and FSI shall not, nor shall any
Borrower or FSI permit any such Marine Subsidiary or such Owner Trustee to, use
the proceeds to repay any loans or advances made by any other Person.
6.5 DISPOSITION OF ASSETS. No Borrower shall, and FSI shall not, nor shall
any Borrower or FSI permit any Marine Subsidiary of such Borrower or any Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower (or jointly with one or more other Borrowers) to,
sell, assign or otherwise dispose of, any of its or their respective assets,
except for full, fair and reasonable consideration, or enter or permit any
Marine Subsidiary or Owner Trustee to enter into any sale and leaseback
agreement covering any of its or their respective fixed or capital assets.
6.6 RESTRICTION ON FUNDAMENTAL CHANGES. No Borrower shall, and FSI shall
not, nor shall any Borrower or FSI permit any Marine Subsidiary of such Borrower
to, enter into any transaction of merger, consolidation or recapitalization,
directly or indirectly, whether by operation of law or otherwise, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business,
Property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, Property or assets
of, or stock or other evidence of beneficial ownership of, any Person, except
(a) for the formation of Marine Subsidiaries and the sale and transfer of all of
its ownership interest (whether stock or otherwise) in any Marine Subsidiary to
an Equipment Growth Fund, (b) the acquisition or resale of Equipment in the
ordinary course of business (for the purposes of this Section 6.6, with respect
to any Borrower and any Marine Subsidiary of such Borrower, ordinary course of
business shall refer to the business of the Equipment Growth Funds and all
Marine Subsidiaries, collectively), and (c) any Subsidiary of FSI (other than
Acquisub) may be merged or consolidated with or into FSI or any wholly-owned
Subsidiary of FSI, or be liquidated, wound up or dissolved, or all or
substantially all of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to, FSI or any wholly-owned Subsidiary of FSI; provided that, in
the case of such a merger or consolidation, FSI or such wholly-owned Subsidiary
shall be the continuing or surviving corporation.
6.7 TRANSACTIONS WITH AFFILIATES. No Borrower shall, or shall permit any
Marine Subsidiary of such Borrower to, directly or indirectly, enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any of its Affiliates on terms that are less favorable to such Borrower or such
Marine Subsidiary than those that might be obtained at the time from Persons who
are not such Affiliates.
6.8 NO LOANS TO AFFILIATES. No Borrower shall make any loans to any of its
Affiliates other than to its Marine Subsidiaries.
6.9 NO INVESTMENT. No Borrower shall make or suffer to exist, or permit or
suffer any of its Marine Subsidiaries to make or suffer to exist, any Investment
except as permitted by Section 6.8, the sharing arrangements with respect to
Equipment which are shared with Equipment Growth Funds, and equipment owned
jointly with USPE's.
6.10 MAINTENANCE OF BUSINESS. No Borrower shall, and FSI shall not permit
any of its existing Subsidiaries to, engage in any business materially different
than the business currently engaged in by such Person. Without limiting the
foregoing, Acquisub shall not engage in any business other than the purchase of
transportation equipment and the operation, leasing, remarketing and resale of
such equipment.
6.11 NO MODIFICATION TO LEASES. No Borrower shall modify or agree to modify
any material term of any Lease of Equipment financed or refinanced hereunder to
which it is a party without the written consent of Agent, which consent will not
be unreasonably withheld. For purposes of this Section 6.11, material Lease
terms shall include, without limitation, terms relating to lease payments,
maturity and the amount and scope of the lessee's insurance coverage.
6.12 NO SUBSIDIARIES. No Borrower shall create any Subsidiaries except
Marine Subsidiaries.
6.13 NO DISTRIBUTIONS. No Borrower shall make, pay or set apart any funds
for the payment of distribution to its shareholders, partners or members if such
distribution would cause or result in an Event of Default or Potential Event of
Default. In addition, Acquisub shall not declare or make any distribution of
assets, properties, cash, rights, obligations or securities on account of any of
its membership interests, or purchase, redeem or otherwise acquire for value any
of its membership interests or any warrants, rights or options to acquire such
membership interests, now or hereafter outstanding; except that Acquisub may,
(a) following the resale of any item of Eligible Inventory to PLMI, any
Equipment Growth Fund or any third party and after having repaid in full the
Loan advanced by Lender to finance or refinance such Eligible Inventory,
distribute the remaining proceeds of such resale to FSI and (b) no more
frequently than monthly and in no event prior to such time as Acquisub shall
have made payment in full of all interest on the Loans funded hereunder accrued
through the last day of the previous calendar month, Acquisub may distribute its
net profits (revenues less interest and operating expenses) to FSI.
6.14 EVENTS OF DEFAULT. No Borrower shall, and FSI shall not, take or omit
to take any action, which act or omission would, with the lapse of time, or
otherwise constitute (a) a default, event of default or Event of Default under
any of the Loan Documents or (b) a default or an event of default under any
other material agreement, contract, lease, license, mortgage, deed of trust or
instrument to which either is a party or by which either or any of their
Properties or assets is bound, which default or event of default would, with
reasonable likelihood, have a Material Adverse Effect.
6.15 ERISA.
6.15.1 Acquisub shall not incur any obligation to contribute to a
Pension Plan required by a collective bargaining agreement or as a consequence
of the acquisition of an ERISA Affiliate, unless (i) Acquisub shall notify Agent
in writing that it intends to incur such obligation and (ii) after Agent's
receipt of such notice, Requisite Lenders consent to the establishment or
maintenance of, or Acquisub's incurring an obligation to contribute to, the
Pension Plan, which consent may not unreasonably be withheld but may be subject
to such reasonable conditions as Requisite Lenders may require.
6.15.2 If any Borrower or FSI or any of their ERISA Affiliates incurs
any obligation to contribute to any Pension Plan, then such Borrower or FSI, as
the case may be, shall not (a) terminate, or permit such ERISA Affiliate to
terminate, any Pension Plan so as to result in any liability that would, with
reasonable likelihood, have a Material Adverse Effect or (b) make or permit such
ERISA Affiliate to make a complete or partial withdrawal (within the meaning of
Section 4201 of ERISA) from any Multiemployer Plan so as to result in any
liability that would, with reasonable likelihood, have a Material Adverse
Effect.
6.16 NO USE OF ANY LENDER'S NAME. No Borrower shall, and FSI shall not, use
or authorize others to use any Lender's name or marks in any publication or
medium, including, without limitation, any prospectus, without such Lender's
advance written authorization.
6.17 CERTAIN ACCOUNTING CHANGES. No Borrower shall change its fiscal year
end from December 31, nor make any change in its accounting treatment and
reporting practices except as permitted by GAAP; provided, however, that should
any Borrower change its accounting treatment or reporting practices in a way
that would cause a change in the calculation, or in the results of a
calculation, of any of the financial covenants set forth in Section 7, below,
then such Borrower shall continue to calculate such covenants as if such
accounting treatment or reporting practice had not been changed unless otherwise
agreed to by Requisite Lenders.
6.18 AMENDMENTS OF LIMITED PARTNERSHIP AGREEMENT OR OPERATING AGREEMENT. No
Borrower shall permit, or cause to occur, any amendment, modification or
supplement of or to any of the terms or provisions of such Borrower's Limited
Partnership Agreement or, in the case of each of Income Fund I and Acquisub, its
respective Operating Agreement, which amendment, modification or supplement
would affect, limit or otherwise impair such Borrower's ability to pay the
Obligations or perform its obligations under this Agreement or any of the other
Loan Documents.
SECTION 7. FINANCIAL COVENANTS OF EQUIPMENT GROWTH FUNDS.
Each Equipment Growth Fund, severally, as to itself, but not jointly as to
the other Equipment Growth Funds, covenants and agrees that, so long as the
Commitments hereunder shall be available, and until full, complete and
indefeasible payment and performance of the Obligations, including, without
limitation, all Loans evidenced by the Notes, unless Requisite Lenders shall
otherwise consent in writing, the Equipment Growth Funds shall perform the
following financial covenants. Each Equipment Growth Fund agrees and understands
that (except as expressly provided herein) all covenants under this Section 7
shall be subject to quarterly compliance and compliance as of the date of any
request for a Loan pursuant to Section 3.3.1 (as measured on the last day of
each fiscal quarter of such Equipment Growth Fund, or as of the date of any
request for a Loan pursuant to Section 3.3.1), and in each case review by
Lenders of the respective fiscal quarter's consolidated financial statements
delivered to Agent by each Equipment Growth Fund pursuant to Section 5.1;
provided, however, that the following financial covenants shall apply only as to
those Equipment Growth Funds requesting a Loan or as to which a Loan remains
outstanding.
7.1 MINIMUM OPERATING CASH FLOW COVERAGE RATIO. Each Equipment Growth Fund
shall maintain an Operating Cash Flow Coverage Ratio of not less than 1.50:1.0.
7.2 MINIMUM TOTAL CASH FLOW COVERAGE RATIO. Each Equipment Growth Fund
shall maintain a Total Cash Flow Coverage Ratio of not less than 1.00:1.0.
7.3 MAXIMUM LEVERAGE RATIO. Each Equipment Growth Fund shall maintain a
Leverage Ratio of not more than 1.50:1.0.
7.4 CASH BALANCES. The Equipment Growth Funds shall maintain aggregate
unrestricted cash balances of not less than $3,750,000.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
8.1 EVENTS OF DEFAULT. As to any Borrower, the occurrence of any one or
more of the following shall constitute an Event of Default for each such
Borrower individually:
8.1.1 FAILURE TO MAKE PAYMENTS. Such Borrower, any Marine Subsidiary
of such Borrower or any Owner Trustee holding record title to any Eligible
Inventory for the beneficial interest of such Borrower (or jointly with one or
more other Borrowers) fails to pay any sum due to Lenders or Agent arising under
this Agreement, the Note of such Borrower or any of the other Loan Documents
when and as the same shall become due and payable, whether by acceleration or
otherwise and such failure shall not have been cured to Lenders' satisfaction
within five (5) calendar days; or
8.1.2 OTHER AGREEMENTS. (a) Such Borrower, any Marine Subsidiary of
such Borrower, FSI, TEC, Acquisub or any Owner Trustee holding record title to
any Eligible Inventory for the beneficial interest of such Borrower (or jointly
with one or more other Borrowers) defaults in the repayment of any principal of
or the payment of any interest on any Indebtedness of such Borrower, any such
Marine Subsidiary, FSI, TEC, Acquisub or any such Owner Trustee, respectively,
or breaches any term of any evidence of such Indebtedness or defaults in any
payment in respect of any Contingent Obligation (excluding, as to FSI, any
Contingent Obligation of FSI arising solely as a result of FSI's status as a
general partner of any Person other than such Borrower), in each case exceeding,
in the aggregate outstanding principal amount, $2,000,000, or such Borrower, any
Marine Subsidiary, FSI, TEC, Acquisub or any Owner Trustee breaches or violates
any term or provision of any evidence of such Indebtedness or Contingent
Obligation or of any such loan agreement, mortgage, indenture, guaranty or other
agreement relating thereto if the effect of such breach is to permit
acceleration under the applicable instrument, loan agreement, mortgage,
indenture, guaranty or other agreement and such failure shall not have been
cured within the applicable cure period, or there is an acceleration under the
applicable instrument, loan agreement, mortgage, indenture, guaranty or other
agreement; or (b) PLMI defaults in the repayment of any principal of or the
payment of any interest on any Indebtedness or defaults in any payment in
respect of any Contingent Obligation, in each case exceeding, in the aggregate
outstanding principal amount, $2,000,000, or PLMI breaches or violates any term
or provision of any evidence of such Indebtedness or Contingent Obligation or of
any such loan agreement, mortgage, indenture, guaranty or other agreement
relating thereto with the result that such Indebtedness or Contingent Obligation
becomes or is caused to become then due and payable in its entirety, whether by
acceleration of otherwise; or
8.1.3 BREACH OF COVENANTS. Such Borrower or FSI fails or neglects to
perform, keep or observe any of the covenants contained in Sections 2.1.3, 5.2,
5.3, 5.9, 5.11, 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12,
6.13, 6.17 or 6.18, or any of the financial covenants contained in Section 7 of
this Agreement; or
8.1.4 BREACH OF REPRESENTATIONS OR WARRANTIES. Any representation or
warranty made by or on behalf of such Borrower or FSI in this Agreement or any
statement or certificate at any time given in writing pursuant hereto or in
connection herewith shall be false, misleading or incomplete in any material
respect when made; or
8.1.5 FAILURE TO CURE. Except as provided in Sections 8.1.1 and 8.1.3,
such Borrower, FSI, any Marine Subsidiary of such Borrower, or any Owner Trustee
holding record title to any Eligible Inventory for the beneficial interest of
such Borrower (or jointly with one or more other Borrowers) fails or neglects to
perform, keep or observe any covenant or provision of this Agreement or of any
of the other Loan Documents or any other document or agreement executed by such
Borrower, FSI, any Marine Subsidiary of such Borrower, or any Owner Trustee
holding record title to any Eligible Inventory for the beneficial interest of
such Borrower (or jointly with one or more other Borrowers) in connection
therewith, and the same has not been cured to Requisite Lenders' satisfaction
within thirty (30) calendar days after such Borrower, FSI, such Marine
Subsidiary of such Borrower, or such Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower (or jointly with
one or more other Borrowers) shall become aware thereof, whether by written
notice from Agent or any Lender or otherwise; or
8.1.6 INSOLVENCY. Such Borrower, any Marine Subsidiary of such
Borrower, Acquisub, any other Borrower (but only for so long as Obligations of
such other Borrower remain or Commitments to such other Borrower are available
under this Agreement), FSI, TEC, PLMI or any Owner Trustee holding record title
to any Eligible Inventory for the beneficial interest of such Borrower (or
jointly with one or more other Borrowers) or any other guarantor of any of such
Borrower's or FSI's obligations to Lenders shall (a) cease to be Solvent, (b)
admit in writing its inability to pay its debts as they mature, (c) make an
assignment for the benefit of creditors, (d) apply for or consent to the
appointment of a receiver, liquidator, custodian or trustee for it or for a
substantial part of its Properties or business, or such a receiver, liquidator,
custodian or trustee otherwise shall be appointed and shall not be discharged
within sixty (60) days after such appointment; or
8.1.7 BANKRUPTCY PROCEEDINGS. Bankruptcy, insolvency, reorganization
or liquidation proceedings or other proceedings for relief under any bankruptcy
law or any law for the relief of debtors shall be instituted by or against such
Borrower, any Marine Subsidiary of such Borrower, Acquisub, any other Borrower
(but only for so long as Obligations of such other Borrower remain or
Commitments to such other Borrower are available under this Agreement), FSI,
TEC, PLMI or any Owner Trustee holding record title to any Eligible Inventory
for the beneficial interest of such Borrower (or jointly with one or more other
Borrowers) or any other guarantor of any of such Borrower's or FSI's obligations
to Lenders or any order, judgment or decree shall be entered against such
Borrower, any Marine Subsidiary of such Borrower, Acquisub, any other Borrower
(but only for so long as Obligations of such other Borrower remain or
Commitments to such other Borrower are available under this Agreement), FSI,
TEC, PLMI or any Owner Trustee holding record title to any Eligible Inventory
for the beneficial interest of such Borrower (or jointly with one or more other
Borrowers) or any other guarantor of any of such Borrower's or FSI's obligations
to Lenders decreeing its dissolution or division; provided, however, with
respect to an involuntary petition in bankruptcy, such petition shall not have
been dismissed within sixty (60) days after the filing of such petition; or
8.1.8 MATERIAL ADVERSE EFFECT. There shall have been a change in the
assets, liabilities, financial condition, operations, affairs or prospects of
such Borrower, any Marine Subsidiary of such Borrower, Acquisub, FSI, TEC, PLMI
or any Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower (or jointly with one or more other
Borrowers) or any other guarantor of any of such Borrower's or FSI's obligations
to Lenders which, in the reasonable determination of Requisite Lenders has,
either individually or in the aggregate, had a Material Adverse Effect; or
8.1.9 JUDGMENTS, WRITS AND ATTACHMENTS. There shall be a money
judgment, writ or warrant of attachment or similar process entered or filed
against such Borrower, any Marine Subsidiary of such Borrower, Acquisub, FSI,
TEC or any Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower (or jointly with one or more other
Borrowers) which (net of insurance coverage) remains unvacated, unbonded,
unstayed or unpaid or undischarged for more than sixty (60) days (whether or not
consecutive) or in any event later than five (5) calendar days prior to the date
of any proposed sale thereunder, which, together with all such other unvacated,
unbonded, unstayed, unpaid and undischarged judgments or attachments against
such Borrower or any Marine Subsidiary of such Borrower exceeds in the aggregate
$1,000,000; against Acquisub or any Marine Subsidiary of Acquisub in any amount;
against FSI exceeds in the aggregate $500,000; against TEC exceeds in the
aggregate $500,000; or against any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower (or jointly with
one or more other Borrowers) exceeds in the aggregate $1,000,000; or against any
combination of the foregoing Persons exceeds in the aggregate $1,000,000; or
8.1.10 LEGAL OBLIGATIONS. Any of the Loan Documents shall for any
reason other than the full, complete and indefeasible satisfaction of the
Obligations thereunder cease to be, or be asserted by such Borrower, Acquisub,
FSI, any Marine Subsidiary of such Borrower or Owner Trustee holding record
title to any Eligible Inventory for the beneficial interest of such Borrower (or
jointly with one or more other Borrowers), or any other Loan Party (other than a
Borrower) not to be, a legal, valid and binding obligation of such Borrower,
Acquisub, FSI, such Marine Subsidiary of such Borrower or Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower (or jointly with one or more other Borrowers), or such other Loan
Party, respectively, enforceable against such Person in accordance with its
terms; or
8.1.11 CHANGE OF GENERAL PARTNER OR MANAGER. FSI shall cease to be the
sole general partner or the sole manager of such Borrower, as applicable,
whether due to the voluntary or involuntary withdrawal, substitution, removal or
transfer of FSI from or of all or any portion of FSI's general partnership
interest or capital contribution in such Borrower; or Acquisub shall cease to be
a wholly-owned Subsidiary of FSI, or TEC shall cease to be a wholly-owned
Subsidiary of FSI, or FSI shall cease to be a wholly-owned Subsidiary of PLMI;
or
8.1.12 PLMI CHANGE OF CONTROL. There occurs any Change of Control; or
8.1.13 CHANGE OF PURCHASER. Requesting Borrower, Acquisub, FSI or
their Subsidiaries shall cease to be the purchaser of Eligible Inventory for
such Requesting Borrower; or
8.1.14 CRIMINAL PROCEEDINGS. A criminal proceeding shall have been
filed in any court naming any Borrower, FSI or any Marine Subsidiary of such
Borrower or Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower (or jointly with one or more other
Borrowers) as a defendant for which forfeiture is a potential penalty under
applicable federal or state law which, in the reasonable determination of
Requisite Lenders, may have a Material Adverse Effect; or
8.1.15 ACTION BY GOVERNMENTAL AUTHORITY. Any Governmental Authority
enters a decree, order or ruling ("Government Action") which will materially and
adversely affect any Borrower's, any Marine Subsidiary of such Borrower's,
FSI's, TEC's, Acquisub's or PLMI's financial condition, operations or ability to
perform or pay such party's obligations arising under this Agreement or any
instrument or agreement executed pursuant to the terms of this Agreement or
which will similarly affect any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower (or jointly with
one or more other Borrowers). Such Borrower or FSI shall have thirty (30) days
from the earlier of the date (a) Borrower or FSI, as applicable, first discovers
it is the subject of Government Action or (b) a Lender or any agency gives
notice of Government Action to take such steps as are necessary to obtain relief
from the Government Action. For the purpose of this paragraph, "relief from
Government Action" means to discharge or to obtain a dismissal of or release or
relief from (i) any Government Action so that the affected party or parties do
not incur (A) any monetary liability in the case of Acquisub or any Marine
Subsidiary of Acquisub, (B) monetary liability of more than $1,000,000 in the
case of any other Borrower or any Marine Subsidiary of such other Borrower, (C)
monetary liability of more than $500,000 in the case of FSI, (D) monetary
liability of more than $500,000 in the case of TEC, (E) monetary liability of
more than $1,000,000 in the case of PLMI, or (F) monetary liability of more than
$1,000,000, in the aggregate, in the case of any combination of the foregoing
Persons, or (ii) any disqualification of or other limitation on the operation of
any Borrower, any Marine Subsidiary of such Borrower, FSI, TEC, Acquisub and
PLMI, or any of them, which in the reasonable determination of Requisite Lenders
may have a Material Adverse Effect; or
8.1.16 GOVERNMENTAL DECREES. Any Governmental Authority, including,
without limitation, the SEC, shall enter a decree, order or ruling prohibiting
the Equipment Growth Funds from releasing or paying to FSI any funds in the form
of management fees, profits or otherwise which, in the reasonable determination
of Requisite Lenders, may have a Material Adverse Effect; or
8.1.17 COLLATERAL.
(i) (A) Any material provision of any Security Document shall for
any reason cease to be valid and binding on or enforceable in any material
respect against any Loan Party or (B) any Loan Party shall state that any
material provision of any Security Document shall for any reason cease to be
valid and binding on or enforceable against such Loan Party in writing or bring
an action to limit its obligations or liabilities thereunder; or
(ii) any Security Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in any
portion of the Collateral purported to be covered thereby or such security
interest shall for any reason cease to be a perfected and first priority
security interest with respect to any item of Collateral subject only to
Permitted Liens; or
8.1.18 OTHER LOAN DOCUMENTS. Any Loan Party (other than a Borrower,
any Marine Subsidiary, any Owner Trustee, or FSI) shall fail to perform or
observe any term, covenant or agreement contained in any Loan Document to which
it is a party.
8.2 WAIVER OF DEFAULT. An Event of Default may be waived only with the
written consent of Requisite Lenders, or if expressly provided, of all Lenders.
Any Event of Default so waived shall be deemed to have been cured and not to be
continuing; but no such waiver shall be deemed a continuing waiver or shall
extend to or affect any subsequent like default or impair any rights arising
therefrom.
8.3 REMEDIES. Upon the occurrence and during the continuance of any Event
of Default or Potential Event of Default, Lenders shall have no further
obligation to advance money or extend credit to or for the benefit of the
defaulting Borrower or any other Borrower, regardless of whether such Event of
Default or Potential Event of Default has occurred with respect to such Borrower
or another Borrower.
In addition, upon the occurrence and during the continuance of an Event of
Default, Lenders or Agent, on behalf of Lenders, may, as to such defaulting
Borrower, or as to all Borrowers should such Event of Default result from the
actions or inactions of FSI, at the option of Requisite Lenders, do any one or
more of the following, all of which are hereby authorized by each Borrower and
FSI:
8.3.1 Declare all or any of the Obligations of such Borrower under
this Agreement, the Notes of such Borrower, the other Loan Documents and any
other instrument executed by such Borrower pursuant to the Loan Documents to be
immediately due and payable, and upon such declaration such obligations so
declared due and payable shall immediately become due and payable; provided that
if such Event of Default is under part 8.1.6 or 8.1.7 of Section 8.1, then all
of the Obligations of each Borrower shall become immediately due and payable
forthwith without the requirement of any notice or other action by Lenders or
Agent;
8.3.2 Terminate this Agreement as to any future liability or
obligation of Agent or Lenders as to such Borrower or as to each Borrower if
such Event of Default results from the actions, inactions or violation of any
covenant of or by FSI (excluding, as to FSI, Events of Default under Section
8.1.2 arising in relation to Contingent Obligation of FSI arising solely as a
result of FSI's status as a general partner of any Person other than such
Borrower); and
8.3.3 Exercise in addition to all other rights and remedies granted
hereunder, any and all rights and remedies granted under the Loan Documents or
otherwise available at law or in equity.
8.4 SET-OFF.
8.4.1 During the continuance of an Event of Default, any deposits or
other sums credited by or due from any Lender to any Borrower, FSI or any
Guarantor (exclusive of deposits in accounts expressly held in the name of third
parties or held in trust for benefit of third parties) may be set-off against
the Obligations of such Borrower and any and all other liabilities, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising of such Borrower, FSI or any Guarantor to Lenders. Each Lender
agrees to notify promptly Borrowers, FSI, Guarantors, and Agent of any such
set-off; provided, that the failure to give such notice shall not affect the
validity of any such set-off.
8.4.2 Each Lender agrees that if it shall, whether by right of
set-off, banker's lien or similar remedy pursuant to Section 8.4.1, obtain any
payment as a result of which the outstanding and unpaid principal portion of the
Commitments of such Lender shall be less than such Lender's Pro Rata Share of
the outstanding and unpaid principal portion of the aggregate of all
Commitments, such Lender receiving such payment shall simultaneously purchase
from each other Lender a participation in the Commitments held by such Lenders
so that the outstanding and unpaid principal amount of the Commitments and
participations in Commitments of such Lender shall be in the same proportion to
the unpaid principal amount of the aggregate of all Commitments then outstanding
as the unpaid principal amount under the Commitments of such Lender outstanding
immediately prior to receipt of such payment was to the unpaid principal amount
of the aggregate of all Commitments outstanding immediately prior to such
Lender's receipt of such payment; provided, however, that if any such purchase
shall be made pursuant to this Section 8.4.2 and the payment giving rise thereto
shall thereafter be recovered, such purchase shall be rescinded to the extent of
such recovery and the purchase price restored without interest. Each Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Commitment deemed to have been so purchased may
exercise any and all rights of set-off, banker's lien or similar remedy with
respect to any and all moneys owing by Borrower to such Lender as fully as if
such Lender held a Commitment in the amount of such participation.
8.5 RIGHTS AND REMEDIES CUMULATIVE. The enumeration of the rights and
remedies of Agent and Lenders set forth in this Agreement is not intended to be
exhaustive and the exercise by Agent and Lenders of any right or remedy shall
not preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of Agent and Lenders in exercising any right, power or privilege shall
operate as a waiver hereof, nor shall any single or partial exercise of any such
right, power or privilege preclude other or further exercise thereof or the
exercise of any other right, power or privilege or shall be construed to be a
waiver of any Event of Default or Potential Event of Default. No course of
dealing between any Borrower, FSI, Agent, or any Lender or their respective
agents or employees shall be effective to change, modify or discharge any
provision of this Agreement or any of the Loan Documents or to constitute a
waiver of any Event of Default or Potential Event of Default.
SECTION 9. AGENT.
9.1 APPOINTMENT. Each of the Lenders hereby irrevocably designates and
appoints Imperial Bank as the Agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes Imperial Bank
as the Agent for such Lender to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement and such other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement or such other Loan Documents, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against Agent. To the extent any provision of this Agreement
permits action by Agent, Agent shall, subject to the provisions of this Section
9, take such action if directed in writing to do so by Requisite Lenders.
9.2 DELEGATION OF DUTIES. Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Loan Documents (except
for its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any Lender for any recitals, statements,
representations or warranties made by any Borrower or any officer thereof
contained in this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by Agent under or in connection with, this Agreement or the other Loan Documents
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for any failure of
any Borrower to perform its obligations hereunder or thereunder. Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the Properties, books or records of any
Borrower.
9.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrowers), independent accountants and other experts
selected by Agent. Agent may deem and treat the payee of any promissory note
issued pursuant to this Agreement as the owner thereof for all purposes unless
such promissory note shall have been transferred in accordance with Section
11.10 hereof. Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of Requisite Lenders as it deems appropriate
or it shall first be indemnified to its satisfaction by Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
Requisite Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Lenders.
9.5 NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Potential Event of Default
hereunder unless Agent has received written notice from a Lender or any Borrower
referring to this Agreement, describing such Event of Default or Potential Event
of Default and stating that such notice is a "notice of default". In the event
that Agent receives such a notice, Agent shall promptly give notice thereof to
Lenders. The Agent shall take such action with respect to such Event of Default
or Potential Event of Default as shall be reasonably directed by Requisite
Lenders; provided that unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Potential Event of Default as it shall deem advisable in the best interests of
Lenders.
9.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly
acknowledges that neither Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by Agent hereinafter taken, including any
review of the affairs of Borrower, shall be deemed to constitute any
representation or warranty by Agent to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of each
Borrower and FSI and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of each Borrower and FSI.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by Agent hereunder or by the other Loan Documents,
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of each Borrower and FSI which
may come into the possession of Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates. Notwithstanding anything
contained in the preceding sentence to the contrary, Agent agrees to promptly
provide Lenders with (i) copies of all financial statements, reports and
certificates delivered by Borrowers to Agent hereunder, (ii) copies of all
notices and other communications deemed by Agent to be material, relating to the
transactions contemplated by this Agreement, that are sent or received by Agent,
and (iii) any other information, financial or otherwise, deemed by Agent to be
material, relating to any Borrower's financial condition or ability to perform
its obligations hereunder, furnished to, or obtained by, Agent hereunder.
9.7 INDEMNIFICATION. Each Lender agrees to indemnify Agent in its capacity
as such (to the extent not reimbursed by Borrowers and without limiting the
obligation of Borrowers to do so), ratably according to the respective amounts
of their Pro Rata Share of the Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent under or
in connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from Agent's bad faith, gross negligence or willful misconduct.
The agreements in this Section 9.7 shall survive the repayment of the Loans and
all other amounts payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Borrower or FSI as though Agent were not Agent hereunder. With respect to
Advances made or renewed by it, Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not Agent, and the terms "Lender" and "Lenders" shall
include Agent in its individual capacity.
9.9 RESIGNATION AND APPOINTMENT OF SUCCESSOR AGENT. Agent may resign at any
time by giving thirty (30) days' prior written notice thereof to Lenders and
Borrowers; provided, however, that the retiring Agent shall continue to serve
until a successor Agent shall have been selected and approved pursuant to this
Section 9.9. Upon any such notice, Agent shall have the right to appoint a
successor Agent; provided, however, that if such successor shall not be a
signatory to this Agreement, such appointment shall be subject to the consent of
Requisite Lenders. Agent may be replaced by Requisite Lenders, with or without
cause; provided, however, that any successor agent shall be subject to
Borrowers' consent, which consent shall not be unreasonably withheld. Upon the
acceptance of any appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
SECTION 10. EXPENSES AND INDEMNITIES.
10.1 EXPENSES. Borrowers and Lenders agree that, as the following costs,
expenses, charges and other disbursements benefit each Borrower and as such
costs, expenses, charges and other disbursements cannot easily be ratably
allocated to the account of any Borrower or Borrowers, each Borrower, unless
otherwise specified in this Section 10.1, shall pay, as its Obligation, promptly
on demand, and in any event within thirty (30) days of the invoice date
therefor, (a) all costs, expenses, charges and other disbursements (including,
without limitation, all reasonable attorneys' fees and allocated expenses of
outside counsel and in-house legal staff) incurred by or on behalf of Agent or
any Lender in connection with the preparation of the Loan Documents and all
amendments and modifications thereof, extensions thereto or substitutions
therefor, and all costs, expenses, charges or other disbursements incurred by or
on behalf of Agent or any Lender (including, without limitation all reasonable
attorney's fees and allocated expenses of outside counsel and in-house legal
staff) in connection with the furnishing of opinions of counsel (including,
without limitation, any opinions requested by Lenders as to any legal matters
arising hereunder) and of Borrowers' performance of and compliance with all
agreements and conditions contained herein or in any of the other Loan Documents
on its part to be performed or complied with; (b) all other costs, expenses,
charges and other disbursements incurred by or on behalf of Agent or any Lender
in connection with the negotiation, preparation, execution, administration,
continuation and enforcement of the Loan Documents, and the making of the Loans
hereunder, including without limitation the cost of UCC searches and filing
fees; (c) all costs, expenses, charges and other disbursements (including,
without limitation, all reasonable attorney's fees and allocated expenses of
outside counsel and in-house legal staff) incurred by or on behalf of Agent or
any Lender in connection with the assignment or attempted assignment to any
other Person of all or any portion of any Lender's interest under this Agreement
pursuant to Section 11.10; and (d) regardless of the existence of an Event of
Default or Potential Event of Default, all legal, appraisal, audit, accounting,
consulting or other fees, costs, expenses, charges or other disbursements
incurred by or on behalf of Agent or any Lender in connection with any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Lenders, Agent, any Borrower or any other Person) seeking to enforce any
Obligations of, or collecting any payments due from, any Borrower under this
Agreement and the Notes, all of which amounts shall be deemed to be part of the
Obligations; provided, however, that Lenders shall be entitled to collect the
full amount of such costs, expenses, charges and other disbursements only once.
Notwithstanding anything to the contrary contained in this Section 10.1, so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing, all appraisals of the Eligible Inventory shall be at the expense of
Lenders. If an Event of Default or Potential Event of Default shall have
occurred and be continuing, such appraisals shall be at the expense of the
Requesting Borrower.
10.2 INDEMNIFICATION. Whether or not the transactions contemplated hereby
shall be consummated:
10.2.1 GENERAL INDEMNITY. Each Borrower, as to itself, and FSI,
jointly and severally as to itself and each Borrower, shall pay, indemnify, and
hold each Lender, Agent and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including reasonable attorney's fees and the allocated cost of in-house
counsel) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby, and
with respect to any investigation, litigation or proceeding (including any case,
action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, dissolution or relief of
debtors or any appellate proceeding) related to this Agreement or the Loans or
the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that Borrowers and FSI shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
10.2.2 ENVIRONMENTAL INDEMNITY.
(a) Each Borrower, to the extent of its pro rata share of
ownership of Property involved in any investigation, litigation or proceeding,
as set forth below, and FSI hereby jointly and severally agree to indemnify,
defend and hold harmless each Indemnified Person, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including reasonable attorneys' fees
and the allocated cost of in-house counsel and of internal environmental audit
or review services), which may be incurred by or asserted against such
Indemnified Person in connection with or arising out of any pending or
threatened investigation, litigation or proceeding, or any action taken by any
Person, with respect to any Environmental Claim arising out of or related to any
Property owned, leased or operated by such Borrower. No action taken by legal
counsel chosen by Agent or any Lender in defending against any such
investigation, litigation or proceeding or requested remedial, removal or
response action shall (except for actions which constitute fraud, willful
misconduct, gross negligence or material violations of law) vitiate or in any
way impair Borrowers' or FSI's obligation and duty hereunder to indemnify and
hold harmless Agent and each Lender. Agent and all Lenders agree to use
reasonable efforts to cooperate with Borrowers respecting the defense of any
matter indemnified hereunder, except insofar as and to the extent that their
respective interests may be adverse to Borrowers' or FSI's interests, in Agent's
or such Lender's sole discretion.
(b) In no event shall any site visit, observation, or testing by
Agent or any Lender be deemed a representation or warranty that Hazardous
Materials are or are not present in, on, or under the site, or that there has
been or shall be compliance with any Environmental Law. Neither Borrowers, FSI
nor any other Person is entitled to rely on any site visit, observation, or
testing by Agent or any Lender. Except as otherwise provided by law, neither
Agent nor any Lender owes any duty of care to protect Borrowers, or any one of
them, or any other Person against, or to inform Borrowers or any other party of,
any Hazardous Materials or any other adverse condition affecting any site or
Property. Neither Agent nor any Lender shall be obligated to disclose to
Borrowers, FSI or any other Person any report or findings made as a result of,
or in connection with, any site visit, observation, or testing by Agent or any
Lender.
10.2.3 SURVIVAL; DEFENSE. The obligations in this Section 10.2 shall
survive payment of all other Obligations. At the election of any Indemnified
Person, Borrowers shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at the
sole cost and expense of Borrowers, which cost and expense shall be allocated to
Borrowers according to such Borrower's pro rata share of ownership of any
Property in relation to which such obligations arise. All amounts owing under
this Section 10.2 shall be paid within thirty (30) days after written demand.
SECTION 11. MISCELLANEOUS.
11.1 SURVIVAL. All covenants, agreements, representations and warranties
made herein shall survive the execution and delivery of the Loan Documents and
the making of the Loans hereunder.
11.2 NO WAIVER BY AGENT OR LENDERS. No failure or delay on the part of
Agent or any Lender in the exercise of any power, right or privilege under this
Agreement, the Notes or any of the other Loan Documents shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
11.3 NOTICES. Except as otherwise provided in this Agreement, any notice or
other communication herein required or permitted to be given shall be in writing
and may be delivered in person, with receipt acknowledged, or sent by telex,
facsimile, telecopy, computer transmission or by United States mail, registered
or certified, return receipt requested, or by Federal Express or other
nationally recognized overnight courier service, postage prepaid and
confirmation of receipt requested, and addressed as set forth on the signature
pages to this Agreement or at such other address as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which the same
shall have been personally delivered, with receipt acknowledged, or sent by
telex, facsimile, telecopy or computer transmission (with appropriate
answerback), three (3) Business Days after the same shall have been deposited in
the United States mail or on the next succeeding Business Day if the same has
been sent by Federal Express or other nationally recognized overnight courier
service. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
11.4 HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
11.5 SEVERABILITY. Whenever possible, each provision of this Agreement,
each Note and each of the other Loan Documents shall be interpreted in such a
manner as to be valid, legal and enforceable under the applicable law of any
jurisdiction. Without limiting the generality of the foregoing sentence, in case
any provision of this Agreement, any Note or any of the other Loan Documents
shall be invalid, illegal or unenforceable under the applicable law of any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provision in any other jurisdiction, shall not in any way
be affected or impaired thereby.
11.6 ENTIRE AGREEMENT; CONSTRUCTION; AMENDMENTS AND WAIVERS.
11.6.1 This Agreement, the Notes and each of the other Loan Documents
dated as of the date hereof, taken together, constitute and contain the entire
agreement among Borrowers, Lenders and Agent and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof.
11.6.2 This Agreement is the result of negotiations between and has
been reviewed by each Borrower, FSI, and each Lender executing this Agreement as
of the Closing Date and Agent and their respective counsel; accordingly, this
Agreement shall be deemed to be the product of the parties hereto, and no
ambiguity shall be construed in favor of or against Borrowers, FSI, Lenders or
Agent. Borrowers, FSI, Lenders and Agent agree that they intend the literal
words of this Agreement and the other Loan Documents and that no parol evidence
shall be necessary or appropriate to establish Borrowers', FSI's any Lender's or
Agent's actual intentions.
11.6.3 No amendment, modification, discharge or waiver of or consent
to any departure by any Borrower or FSI from, any provision in this Agreement or
any of the other Loan Documents relating to (a) the definition of "Borrowing
Base" or "Requisite Lenders," (b) any increase of the amount of any Commitment,
(c) any reduction of principal, interest or fees payable hereunder, (d) any
postponement of any date fixed for any payment or prepayment of principal or
interest hereunder or (e) this Section 11.6.3 shall be effective without the
written consent of all Lenders. Any and all other amendments, modifications,
discharges or waivers of, or consents to any departures from any provision of
this Agreement or of any of the other Loan Documents shall not be effective
without the written consent of Requisite Lenders. Any waiver or consent with
respect to any provision of the Loan Documents shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on any Borrower or FSI in any case shall entitle any Borrower or
FSI to any other or further notice or demand in similar or other circumstances.
Any amendment, modification, waiver or consent effected in accordance with this
Section 11.6 shall be binding upon each Lender then party hereto and each
subsequent Lender, on Borrower, and on FSI.
11.7 RELIANCE BY LENDERS. All covenants, agreements, representations and
warranties made herein by each Borrower or FSI shall, notwithstanding any
investigation by Lenders or Agent, be deemed to be material to and to have been
relied upon by Lenders.
11.8 MARSHALING; PAYMENTS SET ASIDE. Lenders shall be under no obligation
to marshal any assets in favor of any Borrower or any other person or against or
in payment of any or all of the Obligations. To the extent that any Borrower
makes a payment or payments to Lenders or Agent, or Lenders or Agent, on behalf
of Lenders, enforce their or its Liens or exercises their or its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under Title 11 of the United States Code or under
any other similar federal or state law, common law or equitable cause, then to
the extent of such recovery the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred.
11.9 NO SET-OFFS BY BORROWERS. All sums payable by Borrowers or FSI
pursuant to this Agreement, any Note or any of the other Loan Documents shall be
payable without notice or demand and shall be payable in United States Dollars
without set-off or reduction of any manner whatsoever.
11.10 BINDING EFFECT, ASSIGNMENT.
11.10.1 This Agreement, the Notes and the other Loan Documents shall
be binding upon and shall inure to the benefit of the parties hereto and thereto
and their respective successors and assigns, except that no Borrower nor FSI
shall assign its rights hereunder or thereunder or any interest herein or
therein without the prior written consent of each Lender. Each Lender shall have
the right in accordance with this Section 11.10 (a) to sell and assign to any
Eligible Assignee all or any portion of its interest (provided that any such
partial assignment shall not be for a principal amount of less than Five Million
Dollars ($5,000,000)) under this Agreement, its respective Notes and the other
Loan Documents, subject to the prior written consent of the affected Borrower,
which consent shall not be unreasonably withheld, and (b) to grant any
participation or other interest herein or therein, except that each potential
participant to which a Lender intends to grant any rights under Sections 2.9,
2.10, 5.1 or 10.2 shall be subject to the prior written consent of the affected
Borrower, which consent shall not be unreasonably withheld; provided, however,
that no such sale, assignment or participation grant shall result in requiring
registration under the Securities Act of 1933, as amended, or qualification
under any state securities law.
11.10.2 Subject to the limitations of this Section 11.10.2, each
Lender may sell and assign, from time to time, all or any portion of its Pro
Rata Share of the Commitments to any of its Affiliates or, with the approval of
the affected Borrower and FSI (which approval shall not be unreasonably
withheld), to any other financial institution acceptable to Agent, subject to
the assumption by such assignee of the share of the Commitments so assigned. The
assignment to such Affiliate or other financial institution shall be evidenced
by an Assignment and Acceptance in the form of Exhibit G ("Assignment and
Acceptance") executed by the assignor Lender (hereinafter from time to time
referred to as the "Assignor Lender") and such Affiliate or other financial
institution (which, upon such assignment shall become a Lender hereunder
(hereinafter from time to time referred to as the "Assignee Lender")). The
Assignment and Acceptance need not include any of the economic or financial
terms upon which such Assignee Lender receives the assignment from the Assignor
Lender, and such terms need not be disclosed to or approved by such Borrower or
FSI; provided only that such terms do not diminish the obligations undertaken by
such Assignee Lender in the Assignment and Acceptance or increase the
obligations of Borrowers or FSI under this Agreement. Upon execution of such
Assignment and Acceptance, (a) the definition of "Commitments" in Section 1
hereof and the Pro Rata Shares set forth therein shall be deemed to be amended
to reflect each Lender's share of the Commitments, after giving effect to the
assignment and (b) the Assignee Lender shall, from the effective date of the
Assignment And Acceptance, be subject to all of the obligations, and entitled to
all of the rights, of a Lender hereunder, except as may be expressly provided to
the contrary in the Assignment and Acceptance. To the extent the obligations
hereunder of the Assignor Lender are assumed by the Assignee Lender, the
Assignor Lender shall be relieved of such obligations. Upon the assignment of
any interest by any Assignor Lender pursuant to this Section 11.10.2, such
Assignor Lender agrees to supplement Schedule 1.1 to show the date of such
assignment, the Assignor Lender, the Assignee Lender, the Assignee Lender's
address for notice purposes and the amount of the Commitments so assigned. In
connection and as a condition to each assignment hereunder, the Assignor Lender
agrees to pay or to cause the Assignee Lender to pay to Agent a processing fee
of $3,500; provided that no processing fee shall be charged for any assignment
to a Lender or a Lender Affiliate.
11.10.3 Subject to the limitations of this Section 11.10.3, any Lender
may also grant, from time to time, participation interests in the interests of
such Lender under this Agreement, the Notes and the other Loan Documents to any
other financial institution without notice to, or approval of, any Borrower or
FSI. The grant of such a participation interest shall be on such terms as the
granting Lender determines are appropriate, provided only that (a) the holder of
such participation interest shall not have any of the rights of a Lender under
this Agreement except, if the participation agreement expressly provides, rights
under Sections 2.9, 2.10, 5.1 and 10.2, and (b) the consent of the holder of
such a participation interest shall not be required for amendments or waivers of
provisions of the Loan Documents other than, if the participation agreement
expressly provides, those which (i) increase the monetary amount of any
Commitment, (ii) decrease any fee or any other monetary amount payable to
Lenders, or (iii) extend the date upon which any monetary amount is payable to
Lenders.
11.11 COUNTERPARTS. This Agreement and any amendments, waivers, consents or
supplements hereto 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, but all such counterparts
together shall constitute but one and the same instrument. Each such agreement
shall become effective upon the execution of a counterpart hereof or thereof by
each of the parties hereto or thereto, delivery of each such counterpart to
Agent.
11.12 EQUITABLE RELIEF. Borrowers and FSI recognize that, in the event any
Borrower or FSI fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any Note or any of the other Loan Documents,
any remedy at law may prove to be inadequate relief to Lenders or Agent;
therefore, Borrowers and FSI agree that Lenders or Agent, if Lenders or Agents
so request, shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
11.13 WRITTEN NOTICE OF CLAIMS; CLAIMS BAR. EACH BORROWER AND FSI HEREBY
AGREE THAT EACH SHALL GIVE PROMPT WRITTEN NOTICE OF ANY CLAIM OR CAUSE OF ACTION
IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST ANY LENDER OR AGENT,
WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED TO THIS
AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS OR TO THE LOANS
CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR OMISSION TO ACT BY ANY LENDER OR
AGENT WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO GIVE SUCH
PROMPT NOTICE TO AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, IT
SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR
ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY
COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY.
11.14 WAIVER OF PUNITIVE DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT, EACH BORROWER AND FSI HEREBY AGREE THAT EACH SHALL
NOT SEEK FROM LENDERS OR AGENT, UNDER ANY THEORY OF LIABILITY, INCLUDING,
WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY PUNITIVE DAMAGES.
11.15 RELATIONSHIP OF PARTIES. The relationship between Borrowers and FSI,
on the one hand, and Lenders and Agent, on the other, is, and at all time shall
remain solely that of a borrower and lenders. Neither Lenders nor Agent shall
under any circumstances be construed to be partners or joint venturers of
Borrowers or FSI or any of their Affiliates; nor shall Lenders nor Agent under
any circumstances be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrowers or FSI or any of their Affiliates, or to
owe any fiduciary duty to any Borrower or any of its Affiliates. Lenders and
Agent do not undertake or assume any responsibility or duty to Borrowers or FSI
or any of their Affiliates to select, review, inspect, supervise, pass judgment
upon or otherwise inform Borrowers or any of their Affiliates of any matter in
connection with its or their Property, any collateral held by Agent or any
Lender or the operations of Borrowers or FSI or any of their Affiliates.
Borrowers and each of their Affiliates shall rely entirely on their own judgment
with respect to such matters, and any review, inspection, supervision, exercise
of judgment or supply of information undertaken or assumed by any Lender or
Agent in connection with such matters is solely for the protection of Lenders
and Agent and neither Borrowers nor any Affiliate is entitled to rely thereon.
11.16 OBLIGATIONS OF EACH BORROWER. Each Borrower and FSI agrees that its
liability hereunder shall be the immediate, direct, and primary obligation of
such Borrower or FSI, as the case may be, and shall not be contingent upon the
Agent's or any Lender's exercise or enforcement of any remedy it may have
against any other Borrower, FSI or any other person, or against any collateral
or any security for the Obligations. Without limiting the generality of the
foregoing, the Obligations shall remain in full force and effect without regard
to and shall not be impaired or affected by, nor shall such Borrower or FSI be
exonerated or discharged by, any of the following events:
11.16.1 Insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors, death,
liquidation, winding up or dissolution of any Borrower or any guarantor of the
Obligations of any Borrower;
11.16.2 Any limitation, discharge, or cessation of the liability of
any other Borrower or any guarantor for the Obligations of such other Borrower
due to any statute, regulation or rule of law, or any invalidity or
unenforceability in whole or in part of the documents evidencing the Obligations
of such other Borrower or any guaranty of the Obligations of such other
Borrower;
11.16.3 Any merger, acquisition, consolidation or change in structure
of any Borrower or any guarantor of the Obligations of any Borrower or any sale,
lease, transfer or other disposition of any or all of the assets, shares or
interests in or of any Borrower or any guarantor of the Obligations of any
Borrower;
11.16.4 Any assignment or other transfer, in whole or in part, of any
Lender's interests in and rights under this Agreement or any of the other Loan
Documents, including, without limitation, any assignment or other transfer, in
whole or in part, of Lenders' interests in and to any collateral;
11.16.5 Any claim, defense, counterclaim or setoff, other than that of
prior performance, that any Borrower or any guarantor of the Obligations of any
Borrower may have or assert, including, but not limited to, any defense of
incapacity or lack of corporate or other authority to execute any documents
relating to the Obligations of any Borrower or any collateral;
11.16.6 Agent's or any Lender's amendment, modification, renewal,
extension, cancellation or surrender of any agreement, document or instrument
relating to this Agreement, the Obligations of any Borrower or any collateral,
or any exchange, release, or waiver of any collateral;
11.16.7 Agent's or any Lender's exercise or nonexercise of any power,
right or remedy with respect to the Obligations of any Borrower or any
collateral, including, but not limited to, the compromise, release, settlement
or waiver with or of any Borrower or any other person;
11.16.8 Agent's or any Lender's vote, claim, distribution, election,
acceptance, action or inaction in any bankruptcy case related to the Obligations
of any Borrower or any collateral; and 11.16.9 Any impairment or invalidity of
any collateral or any failure to perfect any of Agent's liens thereon.
11.17 CO-BORROWER WAIVERS. Each Borrower and FSI hereby expressly waives
(a) diligence, presentment, demand for payment and protest affecting any other
Borrower's or FSI's liability under the Loan Documents; (b) discharge due to any
disability of any Borrower or FSI; (c) any defenses of any other Borrower or FSI
to obligations under the Loan Documents not arising under the express terms of
the Loan Documents or from a material breach thereof by Agent or any Lender
which under applicable law has the effect of discharging any other Borrower from
the Obligations of any Borrower as to which this Agreement is sought to be
enforced; (d) the benefit of any act or omission by Agent or any Lender which
directly or indirectly results in or aids the discharge of any other Borrower
from any of the Obligations of any such Borrower by operation of law or
otherwise; (e) all notices whatsoever, including, without limitation, notice of
acceptance of the incurring of the Obligations of any Borrower; (f) any right it
may have to require Agent or any Lender to disclose to it any information that
Agent or Lenders may now or hereafter acquire concerning the financial condition
or any circumstances that bear on the risk of nonpayment by any other Borrower,
including the release of such other Borrower from its Obligations hereunder; (g)
any requirement that Agent and Lenders exhaust any right, power or remedy or
proceed against any other Borrower or any other security for, or any guarantor
of, or any other party liable for, any of the Obligations of any Borrower, or
any portion thereof; and (h) without limiting the foregoing, the benefit of
California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850,
2899 and 1432. Each Borrower specifically agrees that it shall not be necessary
or required, and Borrowers shall not be entitled to require, that Agent or any
Lender (i) file suit or proceed to assert or obtain a claim for personal
judgment against any other Borrower for all or any part of the Obligations of
any Borrower; (ii) make any effort at collection or enforcement of all or any
part of the Obligations of any Borrower from any Borrower; (iii) foreclose
against or seek to realize upon any collateral or any other security now or
hereafter existing for all or any part of the Obligations of any Borrower; (iv)
file suit or proceed to obtain or assert a claim for personal judgment against
any Borrower or any guarantor or other party liable for all or any part of the
Obligations of any Borrower; (v) exercise or assert any other right or remedy to
which Agent or any Lender is or may be entitled in connection with the
Obligations of any Borrower or any security or guaranty relating thereto to
assert; or (vi) file any claim against assets of one Borrower before or as a
condition of enforcing the liability of any other Borrower under this Agreement
or the Notes.
11.18 GOVERNING LAW. Except as otherwise expressly provided in any of the
Loan Documents, in all respects, including all matters of construction, validity
and performance, this Agreement and the Obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws, and any
applicable laws of the United States of America.
11.19 JUDICIAL REFERENCE.
(b) Other than (a) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (b) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement or the other Loan Documents, which controversy,
dispute or claim is not settled in writing within thirty (30) days after the
"Claim Date" (defined as the date on which a party subject to this Agreement
gives written notice to all other parties that a controversy, dispute or claim
exists), will be settled by a reference proceeding in California in accordance
with the provisions of Section 638 et seq. of the California Code of Civil
Procedure, or their successor sections ("CCP"), which shall constitute the
exclusive remedy for the settlement of any controversy, dispute or claim
concerning this Agreement and the other Loan Documents, including whether such
controversy, dispute or claim is subject to the reference proceeding and except
as set forth above, the parties waive their rights to initiate any legal
proceedings against each other in any court or jurisdiction other than the
Superior Court in the County where the real property, if any, is located or San
Francisco County, if none (the "Court"). The referee shall be a retired Judge of
the Court selected by mutual agreement of the parties, and if they cannot so
agree within forty-five (45) days after the Claim Date, the referee shall be
promptly selected by the Presiding Judge of the Court (or his/her
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection shall take and subscribe to the oath of office as provided for in Rule
244 of the California Rules of Court (or any subsequently enacted Rule). Each
party shall have one peremptory challenge pursuant to CCP ss. 170.6. The referee
shall (x) be requested to set the matter for hearing within sixty (60) days
after the date of selection of the referee and (y) try any and all issues of law
or fact and report a statement of decision upon them, if possible, within ninety
(90) days of the Claim Date. Any decision rendered by the referee will be final,
binding and conclusive and judgment shall be entered pursuant to CCP ss. 644 in
any court in the State of California having jurisdiction. Any party may apply
for a reference proceeding at any time after thirty (30) days following notice
to any other party of the nature of the controversy, dispute or claim, by filing
a petition for a hearing and/or trial. All discovery permitted by this Agreement
or any other Loan Document shall be completed no later than fifteen (15) days
before the first hearing date established by the referee. The referee may extend
such period in the event of a party's refusal to provide requested discovery for
any reason whatsoever, including, without limitation, legal objections raised to
such discovery or unavailability of a witness due to absence or illness. No
party shall be entitled to "priority" in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice, and request for
production or inspection of documents shall be responded to within ten (10) days
after service. All disputes relating to discovery which cannot be resolved by
the parties shall be submitted to the referee whose decision shall be final and
binding upon the parties. Pending appointment of the referee as provided herein,
the Court is empowered to issue temporary and/or provisional remedies, as
appropriate.
(c) Except as expressly set forth in this Agreement, the referee shall
determine the manner in which the reference proceeding is conducted including
the time and place of all hearings, the order of presentation of evidence, and
all other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(d) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding that shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
(e) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, ss. 1280 through ss. 1294.2 of the CCP, as
amended from time to time. The limitations with respect to discovery as set
forth hereinabove shall apply to any such arbitration proceeding.
11.20 WAIVER OF JURY TRIAL. WITHOUT LIMITING THE INTENTION OF THE PARTIES
THAT THE PROCEDURES SET FORTH IN SECTION 11.19 APPLY TO THE MAXIMUM EXTENT
CONTEMPLATED THEREIN, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER
AND FSI, BY EXECUTION HEREOF, AND THE AGENT AND EACH LENDER, BY ACCEPTANCE
HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
AGENT AND EACH LENDER TO ACCEPT THIS AGREEMENT AND THE NOTES EXECUTED AND
DELIVERED BY EACH BORROWER PURSUANT TO THIS AGREEMENT.
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
BORROWERS PLM EQUIPMENT GROWTH FUND VI
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
------------------------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
By
------------------------------------------------------
Xxxxxxx X Xxxxx
Vice President of Finance and Chief Financial Officer
PLM EQUIPMENT GROWTH & INCOME FUND VII
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
------------------------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
By
------------------------------------------------------
Xxxxxxx X Xxxxx
Vice President of Finance and Chief Financial Officer
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
BY PLM FINANCIAL SERVICES, INC.,
ITS MANAGER
By
------------------------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
By
------------------------------------------------------
Xxxxxxx X Xxxxx
Vice President of Finance and Chief Financial Officer
ACQUISUB, LLC
BY PLM FINANCIAL SERVICES, INC.
ITS MANAGER
By
------------------------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
By
------------------------------------------------------
Xxxxxxx X Xxxxx
Vice President of Finance and Chief Financial Officer
Notice to any Borrower to be sent to:
[Insert name of Borrower]
c/o PLM Financial Services, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X Xxxxx
Vice President of Finance
and Chief Financial Officer
Telephone: 415/000-0000
Telecopy: 415/882-0860
With a copy to:
Acquisub, LLC
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: 415/000-0000
Facsimile: 415/882-0860
FSI PLM FINANCIAL SERVICES, INC.
By
------------------------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
By
------------------------------------------------------
Xxxxxxx X Xxxxx
Vice President of Finance and Chief Financial Officer
Notice to be sent to:
PLM Financial Services, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X Xxxxx
Vice President of Finance
and Chief Financial Officer
Telephone: 415/000-0000
Telecopy: 415/882-0860
AGENT IMPERIAL BANK
By
------------------------------------------------------
Xxxxxx Xxxx
Vice President
Notice to be sent to:
Imperial Bank
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx, Vice President
Telephone: 415/000-0000
Facsimile: 415/954-5020
LENDERS IMPERIAL BANK
By
------------------------------------------------------
Xxxxxx Xxxx
Vice President
Notice to be sent to:
Imperial Bank
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx, Vice President
Telephone: 415/000-0000
Facsimile: 415/954-5020
PFF BANK & TRUST
By
------------------------------------------------------
Printed Name: Xxxxx Xxxxx
Title: Vice President
Notice to be sent to:
PFF Bank & Trust
0000 Xxxxxxxx Xxx.
X.X. Xxx 0000
Xxxxxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SCHEDULE A
(COMMITMENTS)
Pro Rata
Lender Commitment Share
Imperial Bank $10,000,000 66-2/3%
PFF Bank & Trust $ 5,000,000 33-1/3%
WAREHOUSING CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.....................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Accounting Terms...............................................................................19
1.3 Other Terms....................................................................................20
1.4 Schedules And Exhibits.........................................................................20
SECTION 2. AMOUNT AND TERMS OF CREDIT.....................................................................20
2.1 Commitment To Lend.............................................................................20
2.1.1 Revolving Facility....................................................................20
(a) Facility Commitments.........................................................20
(b) Each Loan....................................................................21
(c) Fees.........................................................................22
2.1.2 Funding...............................................................................22
2.1.3 Utilization Of The Loans..............................................................23
2.2 Repayment And Prepayment; Reduction or Termination of Commitments..............................23
2.2.1 Repayment.............................................................................23
2.2.2 Voluntary Prepayment..................................................................23
2.2.3 Mandatory Prepayments.................................................................23
2.2.4 Termination of Commitments............................................................24
2.3 Calculation Of Fees and Interest; Post-Maturity Interest.......................................24
2.4 Manner Of Payments.............................................................................24
2.5 Payment On Non-Business Days...................................................................24
2.6 Application Of Payments........................................................................24
2.7 Procedure For The Borrowing Of Loans...........................................................25
2.7.1 Notice Of Borrowing...................................................................25
2.7.2 Unavailability Of LIBOR Loans.........................................................25
2.8 Conversion And Continuation Elections..........................................................25
2.8.1 Election..............................................................................25
2.8.2 Notice Of Conversion..................................................................26
2.8.3 Interest Period.......................................................................26
2.8.4 Unavailability Of LIBOR Loans.........................................................26
2.9 Discretion Of Lenders As To Manner Of Funding..................................................26
2.10 Distribution Of Payments.......................................................................27
2.11 Agent's Right To Assume Funds Available For Advances...........................................27
2.12 Agent's Right To Assume Payments Will Be Made By Borrower......................................27
2.13 Capital Requirements...........................................................................27
2.14 Taxes..........................................................................................28
2.14.1 No Deductions.........................................................................28
2.14.2 Miscellaneous Taxes...................................................................28
2.14.3 Indemnity.............................................................................28
2.14.4 Required Deductions...................................................................28
2.14.5 Evidence of Payment...................................................................29
2.14.6 Foreign Persons.......................................................................29
2.14.7 Income Taxes..........................................................................29
2.14.8 Reimbursement Of Costs................................................................30
2.14.9 Jurisdiction..........................................................................30
2.15 Illegality.....................................................................................30
2.15.1 LIBOR Loans...........................................................................30
2.15.2 Prepayment............................................................................30
2.15.3 Base Rate Borrowing...................................................................31
2.16 Increased Costs................................................................................31
2.17 Inability To Determine Rates...................................................................31
2.18 Prepayment Of LIBOR Loans......................................................................31
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT AND THE MAKING OF LOANS................32
3.1 Conditions to Effectiveness of This Agreement..................................................32
3.1.1 Partnership, Company And Corporate Documents..........................................32
3.1.2 Notes.................................................................................32
3.1.3 Opinion Of Counsel....................................................................32
3.1.4 Guaranty..............................................................................32
3.1.5 Subordination Agreements..............................................................32
3.1.7 PLMI Letter...........................................................................33
3.1.8 Bringdown Certificate.................................................................33
3.1.9 Material Adverse Effect...............................................................33
3.1.10 Other Documents.......................................................................33
3.2 Conditions to Initial Advance..................................................................33
3.2.1 UCC Termination Statements............................................................33
3.2.2 Security Documents (Acquisub).........................................................33
3.2.3 Security Documents (PLMI).............................................................33
3.2.4 Lockbox Agreement.....................................................................34
3.3 Conditions to Each Advance.....................................................................34
3.3.1 Notice Of Borrowing, Borrowing Base Certificate, etc..................................34
3.3.2 Invoices..............................................................................34
3.3.3 Title to Equipment....................................................................34
3.3.4 Approval of Loan......................................................................35
3.3.5 Leases................................................................................35
3.3.6 No Event Of Default...................................................................35
3.3.7 Officer's Certificate.................................................................35
3.3.8 Officer's Certificate - Leases........................................................35
3.3.9 Insurance.............................................................................36
3.3.10 Other Instruments.....................................................................36
3.4 Conditions to Each Advance to Acquisub.........................................................36
3.4.1 Financing Statements, etc.............................................................36
3.5 Conditions to Each Advance to EGF VI...........................................................37
3.5.1 Security Agreement (EGF VI)...........................................................37
3.5.2 Security Agreement Supplement (EGF VI)................................................37
3.5.3 Financing Statements, etc.............................................................37
3.6 Conditions to Each Advance to Income Fund I....................................................37
3.6.1 Security Agreement (Income Fund I)....................................................37
3.6.2 Security Agreement Supplement (Income Fund I).........................................38
3.6.3 Financing Statements, etc.............................................................38
3.6.4 Keyport Consent.......................................................................38
3.7 Further Conditions To All Loans................................................................38
3.7.1 General Partner Or Manager............................................................38
3.7.2 Removal Of General Partner Or Manager.................................................38
3.7.3 Purchaser.............................................................................39
SECTION 4. BORROWERS' AND FSI'S REPRESENTATIONS AND WARRANTIES............................................39
4.1 General Representations And Warranties.........................................................39
4.1.1 Existence And Power...................................................................39
4.1.2 Loan Documents And Notes Authorized; Binding Obligations..............................39
4.1.3 No Conflict; Legal Compliance.........................................................39
4.1.4 Financial Condition...................................................................40
4.1.5 Executive Offices.....................................................................40
4.1.6 Litigation............................................................................40
4.1.7 Material Contracts....................................................................40
4.1.8 Consents And Approvals................................................................41
4.1.9 Other Agreements......................................................................41
4.1.10 Employment And Labor Agreements.......................................................41
4.1.11 ERISA.................................................................................41
4.1.12 Labor Matters.........................................................................41
4.1.13 Margin Regulations....................................................................42
4.1.14 Taxes.................................................................................42
4.1.15 Environmental Quality.................................................................42
4.1.16 Trademarks, Patents, Copyrights, Franchises And Licenses..............................43
4.1.17 Full Disclosure.......................................................................43
4.1.18 Other Regulations.....................................................................43
4.1.19 Solvency..............................................................................43
4.2 Representations And Warranties At Time Of First Advance........................................43
4.2.1 Power And Authority...................................................................43
4.2.2 No Conflict...........................................................................44
4.2.3 Consents And Approvals................................................................44
4.3 Survival Of Representations And Warranties.....................................................44
SECTION 5. BORROWERS' AND FSI'S AFFIRMATIVE COVENANTS.....................................................44
5.1 Records And Reports............................................................................44
5.1.1 Quarterly Statements..................................................................44
5.1.2 Annual Statements.....................................................................45
5.1.3 Borrowing Base Certificate............................................................45
5.1.4 Compliance Certificate................................................................45
5.1.5 Reports...............................................................................45
5.1.6 Insurance Reports.....................................................................45
5.1.7 Certificate Of Responsible Officer....................................................46
5.1.8 Employee Benefit Plans................................................................46
5.1.9 ERISA Notices.........................................................................46
5.1.10 Pension Plans.........................................................................46
5.1.11 SEC Reports...........................................................................46
5.1.12 Tax Returns...........................................................................46
5.1.13 Additional Information................................................................47
5.2 Existence; Compliance With Law.................................................................47
5.3 Insurance......................................................................................47
5.4 Taxes And Other Liabilities....................................................................48
5.5 Inspection Rights; Assistance..................................................................48
5.6 Maintenance Of Facilities; Modifications; Performance of Leases................................48
5.6.1 Maintenance Of Facilities.............................................................48
5.6.2 Certain Modifications To The Equipment................................................48
5.6.3 Performance of Leases.................................................................48
5.7 Supplemental Disclosure........................................................................48
5.8 Further Assurances.............................................................................49
5.9 Lockbox........................................................................................49
5.10 Environmental Laws.............................................................................49
5.11 Equipment Purchase Agreement...................................................................49
5.12 Operating Relationship.........................................................................50
SECTION 6. BORROWER'S AND FSI'S NEGATIVE COVENANTS........................................................50
6.1 Liens; Negative Pledges; And Encumbrances......................................................50
6.2 Acquisitions...................................................................................51
6.3 Limitations On Indebtedness....................................................................51
6.4 Use Of Proceeds................................................................................52
6.5 Disposition Of Assets..........................................................................52
6.6 Restriction On Fundamental Changes.............................................................52
6.7 Transactions With Affiliates...................................................................52
6.8 No Loans to Affiliates.........................................................................53
6.9 No Investment..................................................................................53
6.10 Maintenance Of Business........................................................................53
6.11 No Modification to Leases......................................................................53
6.12 No Subsidiaries................................................................................53
6.13 No Distributions...............................................................................53
6.14 Events Of Default..............................................................................53
6.15 ERISA..........................................................................................53
6.16 No Use Of Any Lender's Name....................................................................54
6.17 Certain Accounting Changes.....................................................................54
6.18 Amendments Of Limited Partnership Agreement Or Operating Agreement.............................54
SECTION 7. FINANCIAL COVENANTS OF EQUIPMENT GROWTH FUNDS..................................................54
7.1 Minimum Operating Cash Flow Coverage Ratio.....................................................55
7.2 Minimum Total Cash Flow Coverage Ratio.........................................................55
7.3 Maximum Leverage Ratio.........................................................................55
7.4 Cash Balances..................................................................................55
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.................................................................55
8.1 Events Of Default..............................................................................55
8.1.1 Failure To Make Payments..............................................................55
8.1.2 Other Agreements......................................................................55
8.1.3 Breach Of Covenants...................................................................56
8.1.4 Breach Of Representations Or Warranties...............................................56
8.1.5 Failure To Cure.......................................................................56
8.1.6 Insolvency............................................................................56
8.1.7 Bankruptcy Proceedings................................................................56
8.1.8 Material Adverse Effect...............................................................57
8.1.9 Judgments, Writs And Attachments......................................................57
8.1.10 Legal Obligations.....................................................................57
8.1.11 Change Of General Partner Or Manager..................................................58
8.1.12 PLMI Change of Control................................................................58
8.1.13 Change Of Purchaser...................................................................58
8.1.14 Criminal Proceedings..................................................................58
8.1.15 Action By Governmental Authority......................................................58
8.1.16 Governmental Decrees..................................................................58
8.1.17 Collateral............................................................................59
8.1.18 Other Loan Documents..................................................................59
8.2 Waiver Of Default..............................................................................59
8.3 Remedies.......................................................................................59
8.4 Set-Off........................................................................................60
8.5 Rights And Remedies Cumulative.................................................................60
SECTION 9. AGENT..........................................................................................61
9.1 Appointment....................................................................................61
9.2 Delegation Of Duties...........................................................................61
9.3 Exculpatory Provisions.........................................................................61
9.4 Reliance By Agent..............................................................................61
9.5 Notice Of Default..............................................................................62
9.6 Non-Reliance On Agent And Other Lenders........................................................62
9.7 Indemnification................................................................................63
9.8 Agent In Its Individual Capacity...............................................................63
9.9 Resignation And Appointment Of Successor Agent.................................................63
SECTION 10. EXPENSES AND INDEMNITIES.......................................................................63
10.1 Expenses.......................................................................................64
10.2 Indemnification................................................................................64
10.2.1 General Indemnity.....................................................................64
10.2.2 Environmental Indemnity...............................................................65
10.2.3 Survival; Defense.....................................................................65
SECTION 11. MISCELLANEOUS..................................................................................66
11.1 Survival.......................................................................................66
11.2 No Waiver By Agent Or Lenders..................................................................66
11.3 Notices........................................................................................66
11.4 Headings.......................................................................................66
11.5 Severability...................................................................................66
11.6 Entire Agreement; Construction; Amendments And Waivers.........................................67
11.7 Reliance By Lenders............................................................................67
11.8 Marshaling; Payments Set Aside.................................................................67
11.9 No Set-Offs By Borrowers.......................................................................68
11.10 Binding Effect, Assignment.....................................................................68
11.11 Counterparts...................................................................................69
11.12 Equitable Relief...............................................................................69
11.13 Written Notice Of Claims; Claims Bar...........................................................69
11.14 Waiver Of Punitive Damages.....................................................................70
11.15 Relationship Of Parties........................................................................70
11.16 Obligations Of Each Borrower...................................................................70
11.17 Co-Borrower Waivers............................................................................71
11.18 Governing Law..................................................................................72
11.19 Judicial Reference.............................................................................72
11.20 Waiver Of Jury Trial...........................................................................73
INDEX OF EXHIBITS
Exhibit A.........Form of Revolving Promissory Note
Exhibit B.........Form of Borrowing Base Certificate
Exhibit C.........Form of Opinion of Counsel
Exhibit D.........Form of Compliance Certificate
Exhibit E.........Form of Notice of Borrowing
Exhibit F.........Form of Notice of Conversion/Continuation
Exhibit G.........Form of Assignment and Acceptance
Exhibit H.........Form of Guaranty
Exhibit I-1.......Form of Subordination Agreement (EGF VI)
Exhibit I-2.......Form of Subordination Agreement (EGF VII)
Exhibit I-3.......Form of Subordination Agreement (Income Fund I)
Exhibit I-4.......Form of Subordination Agreement (Acquisub)
Exhibit J.........Form of Lockbox Agreement
Exhibit K.........Form of PLMI Letter
Exhibit L.........Form of Security Agreement (Acquisub)
Exhibit M.........Form of Security Agreement (PLMI)
Exhibit N.........Form of Security Agreement (EGF VI)
Exhibit O.........Form of Security Agreement (Income Fund I)
INDEX OF SCHEDULES
Schedule A Commitments
Schedule 1.1 Amendments to Schedule A
Schedule 3.2.1 UCC Termination Statements
Schedule 4.1.5 Executive Offices and Principal Places of Business
Schedule 4.1.6 Litigation
Schedule 4.1.7 Material Contracts
Schedule 4.1.8 Consent and Approvals
Schedule 4.1.15 Environmental Disclosures
Schedule 6.1 Existing Liens
Schedule 6.3(a) Existing Indebtedness
Schedule 6.3(b) Anticipated Indebtedness
