EXHIBIT 10.71
AMENDED AND RESTATED WAREHOUSING
CREDIT AGREEMENT
By and Among
LEASING SOLUTIONS, INC.
The LENDERS herein named as the LENDERS
AND
THE FIRST NATIONAL BANK OF BOSTON, as Agent
SEPTEMBER 13, 1996
INDEX OF EXHIBITS AND SCHEDULES
-------------------------------
Exhibit A-1 Form of Note
Exhibit A-2 Form of Swingline Note
Exhibit B Form of Security Agreement
Exhibit C Form of Opinion of Borrower's Counsel
Exhibit D Form of Compliance Certificate
Exhibit E Form of Lease
Exhibit F Form of Borrowing Base Certificate
Exhibit G Form of Sybase, Inc. lease
Exhibit H Form of Permitted Amendment
Schedule 1 Commitments
Schedule 6.7 ERISA Plans
TABLE OF CONTENTS
PAGE
Section 1. Definitions. ...................................... 2
Section 2. AMOUNT AND TERMS OF CREDIT......................... 16
2.1 Commitment to Lend................................. 16
(a) Commitment to Make Revolving Loans....... 16
(b) Commitment to Make Swingline Loans....... 18
(c) Increased Costs.......................... 20
(d) Illegality or Impossibility.............. 21
(e) Capital Requirements..................... 22
(f) Special Notice Requirements.............. 23
(g) Notice of Swingline Loans................ 24
(h) Notice of Mandatory Borrowings........... 24
(i) Conversion and Continuation of Loans..... 24
(j) Limitation on Types of Loans............. 25
2.2 Prepayment......................................... 26
(a) Voluntary Prepayment..................... 26
(b) Payments Not at End of Interest Period... 26
2.3 Fees and Commissions............................... 27
(a) Commitment Fee........................... 27
(b) Agent's Fee.............................. 27
2.4 Calculation of Interest; Post-Default Interest..... 27
2.5 Payments........................................... 27
2.6 Payment on Non-Business Days....................... 28
2.7 Application of Payments............................ 28
2.8 Distribution of Payments........................... 29
2.9 Agent's Right to Assume Funds Available for
Advances........................................... 29
2.10 Agent's Right to Assume Payments Will be Made by
Borrower........................................... 30
2.11 Conditions Precedent to Loans...................... 30
(a) First Loan............................... 30
(b) All Loans................................ 31
2.12 Funding Sources.................................... 32
2.13 Sharing of Payments, Etc. ......................... 33
Section 3. Collateral Security................................ 33
Section 4. Borrower's Representations And Warranties.......... 33
4.1 Organization and Qualification..................... 33
4.2 Corporate Authority................................ 33
4.3 Valid Obligations.................................. 34
4.4 Consents or Approvals.............................. 34
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TABLE OF CONTENTS
(continued)
PAGE
4.5 Title to Collateral; Absence of Encumbrances....... 34
4.6 Financial Statements............................... 34
4.7 Changes............................................ 35
4.8 Defaults........................................... 35
4.9 Taxes.............................................. 35
4.10 Litigation......................................... 35
4.11 Use of Proceeds.................................... 35
4.12 Investment Company Act............................. 35
4.13 Compliance with ERISA.............................. 35
4.14 Environmental Matters.............................. 36
Section 5. Borrower's Affirmative Covenants................... 37
5.1 Records and Reports................................ 37
(a) Audited Financial Statements............. 37
(b) Unaudited Financial Statements........... 37
(c) Compliance Certificates.................. 37
(d) Borrowing Base Certificates.............. 38
(e) Collateral Report........................ 38
(f) Other Financial Reports.................. 38
(g) Other Data............................... 38
(h) Credit Policy Manual..................... 39
5.2 Corporate Rights; Facilities; Conduct of Business. 39
5.3 Insurance.......................................... 39
5.4 Taxes and Other Liabilities........................ 39
5.5 Certain Notices.................................... 39
5.6 Inspection Rights.................................. 40
5.7 Conversations With Management...................... 40
5.8 Periodic Audits.................................... 40
5.9 Use of Proceeds.................................... 40
5.10 Compliance With Laws............................... 40
5.11 Punctual Payment................................... 41
5.12 Designated Deposit Account......................... 41
5.13 Imposition of More Restrictive Covenants. ......... 41
5.14 Agreements......................................... 41
5.15 Location of Collateral............................. 41
5.16 Notices to and Consents from Lessees............... 41
5.17 Copies of Leases................................... 42
5.18 Post-Closing Documents............................. 42
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TABLE OF CONTENTS
(continued)
PAGE
Section 6. Borrower's Negative Covenants...................... 42
6.1 Liens and Encumbrances............................. 42
6.2 Employee Loans..................................... 42
6.3 Dividends.......................................... 43
6.4 Restriction on Fundamental Changes................. 43
6.5 Transactions with Affiliates....................... 43
6.6 Maintenance of Business............................ 44
6.7 ERISA.............................................. 44
6.8 No Use of Lenders' Name............................ 44
6.9 Fiscal Year........................................ 44
Section 7. Financial Covenants Of Borrower.................... 44
7.1 Minimum Interest Coverage Ratio.................... 45
7.2 Minimum Tangible Net Worth......................... 45
7.3 Maximum Recourse Debt Ratio........................ 45
7.4 Profitability...................................... 45
Section 8. Events Of Default And Remedies..................... 45
8.1 Events of Default.................................. 45
8.2 Remedies........................................... 47
(a) Exercise of Remedies..................... 47
(b) Deficiency............................... 47
(c) Set-Off.................................. 48
(d) Rights and Remedies Cumulative........... 48
Section 9. Agent.............................................. 48
9.1 Appointment........................................ 48
9.2 Powers; General Immunity, etc. .................... 48
9.3 Representations and Warranties; No Responsibility
for inspection..................................... 49
9.4 Reliance by Agent.................................. 50
9.5 Delegation of Duties............................... 50
9.6 Right to Indemnity................................. 50
9.7 Moneys to be Held.................................. 51
9.8 Agent's Reimbursement.............................. 51
9.9 Resignation or Removal of Agent and Appointment of
Successor Agent.................................... 51
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TABLE OF CONTENTS
(continued)
PAGE
9.10 Conflicts.......................................... 51
9.11 Communications..................................... 52
9.12 No Obligations of Borrower......................... 52
Section 10. Expenses And Indemnities........................... 52
10.1 Expenses........................................... 52
10.2 Taxes, etc. ....................................... 53
10.3 Indemnification.................................... 53
Section 11. Miscellaneous...................................... 53
11.1 Survival........................................... 53
11.2 No Waiver by Agent or Lenders...................... 53
11.3 Notices............................................ 53
11.4 Severability....................................... 54
11.5 Construction....................................... 54
11.6 Entire Agreement; Amendments and Waivers........... 54
11.7 No Set-Offs by Borrower............................ 55
11.8 Headings........................................... 56
11.9 Governing Law...................................... 56
11.10 Waiver of Jury Trial............................... 56
11.11 Subsequent Holders................................. 56
11.12 Assignability...................................... 56
11.13 Confidentiality.................................... 57
11.14 Counterparts....................................... 57
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AMENDED AND RESTATED WAREHOUSING CREDIT
AGREEMENT
THIS AMENDED AND RESTATED WAREHOUSING CREDIT AGREEMENT is entered into as of
September 13, 1996, by and among LEASING SOLUTIONS, INC., a California
corporation ("Borrower"), THE FIRST NATIONAL BANK OF BOSTON, in its individual
capacity ("FNBB"), each other lender whose name is set forth on the signature
pages hereof or which may hereafter execute and deliver an instrument of
assignment with respect to this Agreement pursuant to Section 11.12 or otherwise
become a party to this Agreement (any one of FNBB or such other lenders being
referred to individually as, a "Lender," and collectively, "Lenders"), FNBB in
its capacity as the Swingline Lender (defined below), and FNBB, as agent on
behalf of the Lenders and the Swingline Lender (not in its individual capacity,
but solely as agent, "Agent").
RECITALS
A. Borrower, FNBB, the Lenders whose names are set forth on the signature
pages thereof, and Agent are parties to that certain Amended and Restated
Warehousing Credit Agreement, dated as of September 15, 1995, as amended by that
certain First Amendment to Credit Agreement, dated as of December 15, 1995, that
certain Second Amendment to Credit Agreement, dated as of May 31, 1996, that
certain Third Amendment to Credit Agreement, dated as of June 28, 1996, that
certain Fourth Amendment to Credit Agreement, dated as of July 3, 1996, and that
certain Fifth Amendment to Credit Agreement, dated as of August 1, 1996
(collectively, the "Existing Agreement"), pursuant to which the Lenders agreed
to make secured revolving credit advances to Borrower of up to One Hundred
Thirty-Two Million Five Hundred Thousand Dollars ($132,500,000.00) in the
aggregate principal amount outstanding at any one time.
B. Borrower has requested Lenders to make secured revolving credit
advances to Borrower of up to One Hundred Fifty-Five Million Dollars
($155,000,000.00) (or, subject to the terms and conditions of this Agreement, at
Borrower's option, One Hundred Seventy-Five Million Dollars ($175,000,000)) in
the aggregate principal amount outstanding at any one time, which Borrower will
use to refinance existing warehousing credit facilities with certain of the
Lenders, including under the Existing Agreement, and to warehouse equipment
leases prior to permanent financing thereof.
C. Borrower and Lenders wish to amend and restate the Existing Agreement
to increase the Commitments and to add additional Lenders, all upon the terms
and subject to the conditions hereinafter set forth and in reliance on the
representations and warranties set forth herein.
AGREEMENT
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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:
1. DEFINITIONS.
As used herein, the following terms have the following meanings:
"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:
Adjusted LIBOR = 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" has the meaning given to such term in Section 2.1(a)(i)(A).
"Affiliate" means with respect to any Person (a) each Person that, directly
or indirectly, owns or controls, whether beneficially or as a trustee, guardian
or other fiduciary, twenty percent (20%) or more of the Stock having ordinary
voting power in the election of directors of such Person, (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 and partners; provided, however, that in no case shall any Lender or
Agent be deemed to be an Affiliate of Borrower 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 FNBB solely when acting in its capacity as the Agent under any
of the Loan Documents, and any successor Agent.
"Agent's Fee Letter" means that letter of even date herewith between
Borrower and Agent.
"Agent's Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 11.3.
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"Agent's Reimbursement" means all reasonable out-of-pocket amounts paid or
expenses incurred by Agent in connection with the enforcement of the rights and
remedies granted to Agent and Lenders under this Agreement and the other Loan
Documents, including, without limitation, all attorneys' fees, reasonable
allocated costs of inhouse counsel, court costs and other allocated expenses and
disbursements of any outside counsel and fees and expenses of other advisors
retained by Agent.
"Agreement" means this Warehousing Credit Agreement, including all
amendments, modifications and supplements hereto and any appendices, exhibits or
schedules to any of the foregoing, and shall refer to the Agreement as the same
may be in effect at the time such reference becomes operative.
"Applicable Percentage" means one hundred percent (100%); provided, that the
Applicable Percentage shall be reduced to ninety-five percent (95%) if either
(i) the aggregate Net Present Value of Leases in the Borrowing Base with lessees
who have an internal credit rating of B+ or better (based upon the monthly
Collateral Report delivered pursuant to Section 5.1(e)) is less than fifty
percent (50%) of the aggregate Net Present Value of all Leases in the Borrowing
Base or (ii) the Default Ratio is greater than Two Tenths of One percent
(0.20%); provided further, that in the case of a reduction of the Applicable
Percentage under paragraph (i) above, such reduction shall not be effective if
(a) such reduction was a direct result of a closing of a refinancing, sale, or
securitization of Leases, and (b) within three (3) weeks after delivery of the
original Collateral Report Borrower shall have provided Agent with a new
Collateral Report demonstrating that the aggregate Net Present Value of Leases
in the Borrowing Base with lessees who have an internal credit rating of B+ or
better is greater than or equal to fifty percent (50%) of the aggregate Net
Present Value of all Leases in the Borrowing Base.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto.
"Base Rate" means at any time FNBB's floating commercial loan rate publicly
announced from time to time by FNBB at its head office as its base rate, which
rate may not be FNBB's lowest domestic rate.
"Base Rate Loan" in the singular and "Base Rate Loans" in the plural means
any and all Loans with respect to which Borrower elects an interest rate based
upon the Base Rate.
"Board of Directors" means the Board of Directors of Borrower or any
committee of the Board of Directors of Borrower authorized with respect to any
particular matter to exercise the power of the Board of Directors of Borrower.
"Borrowing Base" means, at the relevant time of reference thereto, an amount
determined by Agent by reference to the most current Borrowing Base Certificate
delivered to Lenders and Agent pursuant to Section 5.1(d), which is equal to the
sum of the Loan Amounts with respect to each Eligible Lease which is Collateral
for the Loans.
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"Borrowing Base Certificate" means a certificate with appropriate insertions
setting forth the components of the Borrowing Base, which certificate shall be
substantially in the form set forth in EXHIBIT F and certified by a Responsible
Officer.
"Business Day" means any day which is not a Saturday, Sunday or a legal
holiday under the laws of the States of Massachusetts, New York or California or
is not a day on which banking institutions located in the States of
Massachusetts, New York or California are authorized or permitted by law or
other governmental action to close; except that if any determination of a
"Business Day" shall relate to a LIBOR Loan, the term "Business Day" shall in
addition exclude any day which is not a Eurodollar Banking Day.
"Capital Requirement Change" has the meaning given to such term in SECTION
2.1(e).
"Capital Requirement Change Effective Date" has the meaning given to such
term in SECTION 2.1(e).
"Closing Date" means the date on which all of the conditions precedent set
forth in Section 2.11 to making the first Loan hereunder shall have been duly
satisfied by Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations proposed or adopted thereunder, as the same may be in effect from
time to time.
"Collateral" means the "Collateral", as defined in the Security Agreement
and any other property, real or personal, tangible or intangible, now existing
or hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of Agent, Swingline Lender or Lenders to secure the
full and complete payment and performance of Borrower's Obligations hereunder
and under the other Loan Documents.
"Commitment" means, with respect to each Lender, the amount set forth on
Schedule 1 for such Lender and "Commitments" means, with respect to each Lender,
all such amounts collectively, as amended from time to time upon the execution
and delivery of an instrument of assignment pursuant to SECTION 11.12 or as
otherwise amended pursuant to the terms hereof.
"Commitment Fee" means the fee referred to in Section 2.3(a).
"Commitment Percentage" means, for any Lender, the proportion such Lender's
Commitment bears to the aggregate of all Commitments.
"Commitment Termination Date" means September 11, 1997.
"Compliance Certificate" means a certificate signed by a Responsible Officer
of Borrower, substantially in the form set forth in EXHIBIT D, with such changes
therein as
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Requisite Lenders or 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 Net Worth" means, on a consolidated basis, the common
stockholders' equity capital plus surplus plus retained earnings, as determined
and computed according to GAAP.
"Default" means a Potential Event of Default or an Event of Default.
"Default Ratio" means, as of the end of each fiscal quarter of Borrower, the
quotient of (A) the aggregate net charge-offs over the immediately preceding
four (4) consecutive fiscal quarters of Borrower, divided by (B) the sum of the
"Net Investment in Operating Leases" plus the "Net Investment in Direct Finance
Leases," taken from the balance sheet of Borrower as of the end of such fiscal
quarter.
"Defaulting Lender" has the meaning given to such term in SECTION 2.9.
"Default Rate" means the default rate of interest set forth in SECTION 2.4.
"Designated Deposit Account" means the demand deposit account maintained by
Borrower with FNBB pursuant to SECTION 5.12.
"Effective Date" has the meaning given to such term in SECTION 2.1(c).
"Eligible Lease" means any Lease, excluding, however, each of the following:
(a) all Leases in respect of which payments are more than sixty (60)
but less than ninety (90) days past due, to the extent that the aggregate
present value of the balance of the monthly rental payments under such Leases
exceeds $1,500,000, using a discount rate equal to the lower of the then current
(i) Base Rate plus the Rate Spread or (ii) Adjusted LIBOR (assuming a two month
Interest Period) plus the Rate Spread;
(b) in the case of Leases under which the lessee has an internal
credit rating of B or better as determined by Borrower in accordance with the
"Leasing Solutions, Inc. Credit Policy," dated August 12, 1996, all such Leases
with any such lessee (including any affiliate of such lessee) as to which any
payments are more than ninety (90) days past due (i) with respect to ten percent
(10%) of the aggregate Net Present Value of all Leases with such lessee
(including any affiliate of such lessee), whether or not such Leases are
otherwise Eligible Leases, or (ii) under any such Leases with such lessee
(including any affiliate of such lessee) with an aggregate Net Present Value
equal to or greater than One Million Dollars ($1,000,000);
(c) in the case of Leases under which the lessee has an internal
credit rating of less than B as determined by Borrower in accordance with the
"Leasing Solutions, Inc. Credit Policy," dated August 12, 1996, all such Leases
with any such lessee (including any affiliate of
5
such lessee) as to which any payments are more than ninety (90) days past due
with respect to any such Lease;
(d) all Leases which have been previously financed under any
warehouse facility other than this facility (each a "Previously Financed
Lease"); provided, that a Previously Financed Lease which is being held for
consolidation with other leases in connection with a securitization shall not be
excluded under this PARAGRAPH (D) for up to ninety (90) days after otherwise
becoming an Eligible Lease, or such longer period as may be approved by Agent,
in its sole discretion;
(e) all Leases as to which the lessee is subject to insolvency,
bankruptcy or receivership proceedings or has made an assignment for the benefit
of creditors;
(f) each Lease which Requisite Lenders in their reasonable
discretion shall deem not to qualify as an Eligible Lease for reasons unrelated
to the lessee's credit standing and for which Requisite Lenders have provided an
explanation, in reasonable detail, for such failure to qualify;
(g) each Lease with respect to which (i) a Lease Default shall have
occurred and be continuing at the time a Schedule is executed by Borrower to
pledge such Lease as Collateral or (ii) a Lease Default shall have occurred and
be continuing for more than ninety (90) days after such Lease has been included
in the Borrowing Base;
(h) all Eligible Software Leases to the extent that the aggregate
Loan Amount with respect to such Eligible Software Leases exceeds ten percent
(10%) of the aggregate Commitments;
(i) each Lease (other than a Lease under which the lessee is the
State of California) which requires that (i) consent to assignment of such Lease
be obtained from the lessee or (ii) the lessee acknowledge notice of any
assignment, if such consent or acknowledgement is not obtained from such lessee
in writing by Borrower within one hundred and twenty (120) days after the date
on which such Lease was first included in the Borrowing Base;
(j) each Lease (other than a Lease under which the lessee is the
State of California) which requires that (i) consent to assignment of such Lease
be obtained from the lessee or (ii) the lessee acknowledge notice of any
assignment, to the extent that such consent or acknowledgement is not obtained
in writing by Borrower and the aggregate Loan Amount for all such Leases (where
such consent or acknowledgement was not obtained) with such lessee (including
any affiliate of such lessee) exceeds Five Million Dollars ($5,000,000);
(k) each Lease (other than a Lease under which the lessee is the
State of California) which requires that (i) consent to assignment of such Lease
be obtained from the lessee or (ii) the lessee acknowledge notice of any
assignment, to the extent that such consent or
6
acknowledgement is not obtained in writing by Borrower and the aggregate Loan
Amount for all such Leases (where such consent or acknowledgement was not
obtained) with all lessees exceeds Fifteen Million Dollars ($15,000,000);
(l) each Lease with the State of California or any agency or
subdivision thereof which requires that (i) consent to assignment of such Lease
be obtained from the lessee or (ii) the lessee acknowledge notice of any
assignment, to the extent that such consent or acknowledgement is not obtained
in writing by Borrower and the aggregate Loan Amount for all such Leases (where
such consent or acknowledgement was not obtained) with such lessee (including
the State of California and any agency or subdivision thereof) exceeds Ten
Million Dollars ($10,000,000); and
(m) Each Lease with respect to which any of Borrower's
representations or warranties made in any Loan Document or any statement or
certificate at any time given in writing pursuant hereto or in connection
herewith shall be false or misleading in any material respect when made.
"Eligible Software Lease" means any Lease (i) generated under Borrower's
vendor program with Sybase, Inc., (ii) under which the property financed is
software owned by Sybase, Inc., (iii) in substantially the form of Exhibit G and
(iv) the lessee or obligor under which has an internal credit rating of B or
better as determined by Borrower.
"Employee Plan" means all employee pension benefit plans within the meaning
of Section 3(2) of ERISA.
"Environmental Laws" means any and all applicable foreign, federal, state
and local environmental, health or safety statutes, laws, regulations, rules,
ordinances, policies and rules or common law (whether now existing or hereafter
enacted or promulgated) of all governmental agencies, bureaus or departments
which may now or hereafter have jurisdiction over Borrower or any of its
Subsidiaries and all applicable judicial and administrative and regulatory
decrees, judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal property or human
health or the environment, including, without limitation, all requirements
pertaining to reporting, licensing, permitting, investigation, remediation and
removal of emissions, discharges, releases or threatened releases of Hazardous
Materials, chemical substances, pollutants or contaminants, whether solid,
liquid or gaseous in nature, into the environment, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of such Hazardous Materials, chemical substances,
pollutants or contaminants.
"Equipment" means the equipment, software and other property covered by a
particular Lease.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, as the same may be in effect from time to time.
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"Eurodollar Banking Day" means any day on which dealings in dollar deposits
are conducted by and among banks in the London-Interbank Market.
"Eurodollar Reserve Percentage" means the reserve percentage, if any,
(expressed as a decimal, rounded upward to the nearest 1/100th of one percent
(0.01%)) in effect on the date LIBOR for such Interest Period is determined
(whether or not applicable to any Lender) under regulations issued from time to
time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities") having a term comparable to such Interest Period.
"Event of Default" means any of the events set forth in SECTION 8.1.
"Facility" means the revolving credit facility described in this Agreement
up to an aggregate principal amount outstanding at any one time of $155,000,000.
"Federal Funds Rate" means, for any period, 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. Quotations, 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.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"Financing Statements" means the UCC-1 financing statements to be executed
and delivered by Borrower pursuant to Section 2.11(b)(vi).
"First Funding Date" means the date funds are first advanced to Borrower for
the first Revolving Credit Loan hereunder.
"Funded Debt" of any Person means without duplication (i) all Indebtedness
for borrowed money, including, without limitation, all Indebtedness for borrowed
money outstanding under this Agreement, (ii) all guaranties of such Indebtedness
of others, and (iii) the present value of all Long-Term Lease obligations (such
present value to be calculated using a discount rate equal to
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the lower of (A) the then current Base Rate plus the Rate Spread, if any, and
(B) the then current Adjusted LIBOR (assuming an Interest Period of two months)
plus the Rate Spread.
"Funding Date" means with respect to any proposed borrowing the date funds
are advanced to Borrower for any Loan.
"GAAP" means generally accepted accounting principles as 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 in such
statements by such other entity as may be in general use by significant segments
of the U.S. accounting profession, as consistently applied. 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
Borrower's financial condition to substantially the same criteria as were
effective prior to such change in GAAP and (b) Borrower shall be deemed to be in
compliance with the covenants contained in the aforesaid Section during the
ninety (90) day period following any such change in GAAP if and to the extent
that Borrower would have been in compliance therewith under GAAP as in effect
immediately prior to such change.
"Governmental Agency" 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.
"Hazardous Material" means any substance, (i) the presence of which requires
or may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any Environmental Law or any amendments
thereto, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.); (iii)
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by
any governmental authority, agency, department, commission, board, agency or
instrumentality of any foreign country, the United States, any state of the
United States, or any political subdivision thereof to the extent any of the
foregoing has or had jurisdiction over Borrower or any of its Subsidiaries; or
(iv) without limitation, which contains gasoline, diesel fuel or other petroleum
products, asbestos or polychlorinated biphenyls ("PCBs").
"Indebtedness" means, with respect to any Person, all liabilities,
obligations and indebtedness of any and every kind and nature, including all
liabilities and all obligations to trade creditors, whether now or hereafter
owing, arising, due or payable, from such Person to any other Person and
howsoever evidenced, created, incurred, acquired or owing, whether primary,
9
secondary, direct, contingent, fixed or otherwise. Without in any way limiting
the generality of the foregoing, Indebtedness of Borrower shall specifically
include the following without duplication:
(i) all amounts outstanding under this Agreement, including amounts
outstanding under any and all Revolving Credit Loans or Swingline Loans;
(ii) all obligations or liabilities of any Person that are secured
by any Lien upon property owned by Borrower, even though Borrower shall not have
assumed or otherwise be liable for the payment thereof; and
(iii) all guaranty obligations, obligations under letters of credit,
then financially measurable recourse obligations in connection with a
securitization transaction, and other similar contingent obligations of
Borrower.
"Indemnitees" has the meaning set forth in SECTION 10.3.
"Intangible Assets" means the value, as stated on the consolidated balance
sheets of Borrower, of all intangible assets of Borrower as determined and
computed in accordance with GAAP, including, without limitation, goodwill.
"Interest Coverage Ratio" means, on a consolidated basis, as measured
quarterly as of the last day of each fiscal quarter of Borrower and its
Subsidiaries for the preceding four (4) fiscal quarters, including the quarter
in which such measurement date occurs, the quotient obtained by dividing (a) the
sum of Borrower's and Borrower's Subsidiaries Net Income plus tax expense plus
----
interest expense ("EBIT") by (b) interest expense, as determined and computed in
accordance with GAAP.
"Interest Period" means, as to any LIBOR Loan, the period commencing on the
date of such LIBOR Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is one (1), two (2) or three (3) months thereafter, in each case as
Borrower may elect; provided, however, that (a) no Interest Period with respect
to any LIBOR Loan shall end later than the date which is thirty (30) days after
the Commitment Termination Date, (b) if an Interest Period would end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day and (c) interest shall accrue from and including the
first Business Day of an Interest Period to but excluding the last Business Day
of such Interest Period.
"Interest Rate Determination Date" The Interest Rate Determination Date
shall be the second Business Day prior to the first day of the related Interest
Period for a LIBOR Loan.
"Lease" means a lease agreement (including any and all schedules,
supplements and amendments thereto and modifications thereof) between Borrower
as lessor and a third party as lessee, substantially in the form of EXHIBIT E;
provided, that any material changes in the form
10
attached hereto as EXHIBIT E must be approved by Requisite Lenders and Agent; or
such other form as Requisite Lenders and Agent may approve in their sole
discretion; provided further, that if a lease agreement is a "master lease
agreement," the term "Lease" shall mean a particular equipment schedule or
supplement under such "master lease agreement" together with such "master lease
agreement" to the extent that it relates to such equipment schedule or
supplement. In the case of an Eligible Software Lease, the term "Lease" includes
all of the documentation set forth in EXHIBIT G together with all related
documentation, including, without limitation, a term note or lease agreement and
lease schedule, any guarantees, and all assignment documentation assigning the
Lease to Borrower.
"Lease Default" means an "Event of Default" as defined in each Lease against
which a Loan is made hereunder.
"Lender Default" shall mean (i) the refusal (which has not been retracted)
of a Lender to make available its portion of any incurrence of Loans or any
Mandatory Borrowing or (ii) a Lender having notified Agent and/or Borrower that
it does not intend to comply with the obligations under SECTION 2.1(a) or
2.1(b)(ii), in either case as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.
"LIBOR" means, with respect to any LIBOR Loan, the London Inter-Bank Offered
Rate (determined solely by Agent) at which United States Dollar deposits are
offered to FNBB by prime banks in London, England at or about 11:00 a.m., London
Time, on the Interest Rate Determination Date with respect to such LIBOR Loan in
an aggregate amount approximately equal to the amount of such LIBOR 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" in the singular and "LIBOR Loans" in the plural means any and
all Loans with respect to which Borrower elects an interest rate based upon
Adjusted LIBOR.
"Lien" means any mortgage, pledge, security interest, encumbrance, deed of
trust, lien, levy or charge of any kind, whether voluntary or involuntary.
"Loan" or "Loans" means the Revolving Credit Loans and the Swingline Loans.
"Loan Amount" means:
(a) with respect to a particular Eligible Lease (other than an
Eligible Software Lease), an amount equal to the lesser of:
(i) the Applicable Percentage of Net Present Value of such
Eligible Lease and
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(ii) ninety percent (90%) of the original cost of the equipment
subject to such Eligible Lease; and
(b) with respect to a particular Eligible Lease which is an Eligible
Software Lease, an amount equal to the lesser of:
(i) ninety percent (90%) of the present value of (1) in the
case of a lease, the remaining firm term periodic rental (excluding
residuals) for such Eligible Lease or (2) in the case of a note, the
remaining firm combined payments of principal and interest for such
Eligible Lease, in each case discounted at a rate equal to the lower
of (A) the then current Base Rate plus the Rate Spread, if any, and
(B) the then current Adjusted LIBOR (assuming an Interest Period of
two months) plus the Rate Spread and
(ii) ninety percent (90%) of the original cost of the
equipment and software subject to such Eligible Lease.
"Loan Documents" mean this Agreement, the Security Agreement, the Schedules
executed under the Security Agreement, the Note, the Swingline Note, the
Financing Statements, the Agent's Fee Letter and any other agreements, documents
or instruments executed by Borrower to Lenders or Agent or its authorized
designee evidencing or otherwise relating to the Loans and/or the Liens granted
to Lenders or Agent with respect to the Loans, as the same may from time to time
be amended, modified, supplemented or renewed.
"Long-Term Lease" means any lease of real or personal property having an
original term, including any period for which the lease may be renewed or
extended at the option of the lessor, of more than one year.
"Mandatory Borrowing" shall have the meaning provided in SECTION
2.1(b)(ii).
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Borrower and its Subsidiaries taken as a whole, (b) Borrower's ability to pay
the Obligations in accordance with the terms of this Agreement and the other
Loan Documents or (c) the Collateral or Lenders' Liens on the Collateral or the
priority of any such Lien.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans (other than
Mandatory Borrowings), $1,000,000, (ii) for LIBOR Loans, $1,000,000, (iii) for
Swingline Loans, $50,000, (iv) for Mandatory Borrowings if no Default has
occurred and is continuing, $1,000,000, and (v) for Mandatory Borrowings if a
Default has occurred and is continuing, $0.
"Net Income" means, on a consolidated basis, as at any date of
determination, for any period, net income (or loss) as determined and computed
in accordance with GAAP; provided, however, that there shall be excluded from
the determination of Net Income the income (or loss)
12
of any Person accrued prior to the date it becomes a Subsidiary of Borrower or
is merged into or consolidated with Borrower or any of its Subsidiaries or that
Person's assets are acquired by Borrower or any of its Subsidiaries.
"Net Present Value" means
(a) with respect to a particular Eligible Lease which is not an
Eligible Software Lease, the present value of the remaining firm
term periodic rental (excluding residuals) for such Eligible Lease
discounted at a rate equal to the lower of (A) the then current Base
Rate plus the Rate Spread, if any, and (B) the then current Adjusted
LIBOR (assuming an Interest Period of two months) plus the Rate
Spread.
(b) with respect to a particular Eligible Lease which is an Eligible
Software Lease, the present value of (1) in the case of a lease, the
remaining firm term periodic rental (excluding residuals) for such
Eligible Lease or (2) in the case of a note, the remaining firm
combined payments of principal and interest for such Eligible Lease,
in each case discounted at a rate equal to the lower of (A) the then
current Base Rate plus the Rate Spread, if any, and (B) the then
current Adjusted LIBOR (assuming an Interest Period of two months)
plus the Rate Spread.
For purposes of this Agreement, the Net Present Value of an Eligible Lease shall
be the amount set forth in the most recent Borrowing Base Certificate,
calculated in accordance with paragraphs (a) and (b) above.
"New Equity" means the sum of (i) the net cash proceeds of any sale of
Stock of Borrower by Borrower, less (ii) the net cash proceeds received by
Borrower in connection with the sale of Stock under Borrower's employee stock
option plans or Borrower's employee stock purchase plan, approved by Borrower's
shareholders.
"Note" means the promissory note executed pursuant to Section 2.1(a)(i)(A),
and any and all replacements, extensions, substitutions and renewals thereof.
"Obligations" means all loans, advances, debts, liabilities and
obligations, for monetary amounts (whether or not such amounts are liquidated or
determinable) owing by Borrower to any Lender, Swingline Lender or Agent,
arising under any of the Loan Documents, including, without limitation, all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note(s), agreement or other instrument.
This term includes, without limitation, all principal, interest, closing fees,
prepayment fees, charges, expenses, attorneys' fees and any other sum chargeable
to Borrower under any of the Loan Documents.
"Permitted Liens" has the meaning set forth in SECTION 6.1.
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"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, limited liability partnership, institution, public benefit
corporation, entity or government (whether Federal, state, county, city,
municipal or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Potential Event of Default" means a condition or event which, after notice
or lapse of time or both, would constitute an Event of Default.
"Rate Spread" means:
(a) in the case of a Revolving Credit Loan which is a Base Rate Loan,
zero percent (0%);
(b) in the case of a Revolving Credit Loan which is a LIBOR Loan, one
and thirty-five hundredths percent (1.35%); and
(c) in the case of a Swingline Loan which is a Base Rate Loan, zero
percent (0%).
"Recourse Debt Ratio" means the quotient obtained by dividing (a) on a
consolidated basis, the total of Borrower's and Borrower's Subsidiaries'
Indebtedness on a recourse basis by (b) Tangible Net Worth.
"Regulatory Change" has the meaning given to such term in SECTION 2.1(c).
"Requisite Lenders" means at any time Lenders then holding at least sixty-
six and two-thirds percent (66 2/3%) of all amounts then outstanding under this
Agreement, or, in the event there are no amounts then outstanding, Lenders then
having at least sixty-six and two-thirds percent (66 2/3%) of the Commitments.
"Responsible Officer" means any of the President, Chief Financial Officer,
Treasurer or other employee of Borrower having authority to request Loans or
execute certificates on behalf of Borrower hereunder.
"Revolving Credit Loan" in the singular and "Revolving Credit Loans" when
used in the plural means any and all of the Revolving Credit Loans made pursuant
to Section 2.1(a).
"Schedule" means each Lease and Equipment Schedule executed by Borrower and
Agent under the Security Agreement.
"Security Agreement" means the Security Agreement to be entered into as of
the date hereof by and among Borrower and Agent on behalf of Lenders,
substantially in the form of EXHIBIT B, including all amendments, modifications
and supplements thereto, and shall refer to
14
the Security Agreement as the same may be in effect at the time such reference
becomes operative.
"Stock" means all shares, options, warrants, interests, participations or
other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including, without limitation,
common stock, preferred stock, or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended).
"Subsidiary" means, with respect to any Person, any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation 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.
"Swingline Commitment" means Five Million Dollars ($5,000,000.00).
"Swingline Lender" means The First National Bank of Boston.
"Swingline Loans" shall have the meaning provided in SECTION 2.1(b)(i).
"Swingline Maturity Date" means the date which is five Business Days prior
to the Commitment Termination Date.
"Swingline Note" means the promissory note executed pursuant to Section
2.1(b)(iii), and any and all replacements, extensions, substitutions and
renewals thereof.
"Tangible Net Worth" means, on a consolidated basis, Borrower's Consolidated
Net Worth, less all (a) Intangible Assets and (b) amounts receivable from
shareholders of Borrower.
"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 Lenders' security interest in 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.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided
15
herein, in accordance with GAAP consistently applied. 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.
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. 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.
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. The term "including" shall not be limiting or
exclusive, unless specifically indicated to the contrary.
2. AMOUNT AND TERMS OF CREDIT.
2.1 COMMITMENT TO LEND
(a) COMMITMENT TO MAKE REVOLVING LOANS. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Borrower set forth herein, Lenders hereby severally agree to make
advances of immediately available funds to Borrower, 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
which, when added to the outstanding principal amount of the Swingline Loans,
does not exceed the lesser of (i) the Commitments or (ii) the Borrowing Base
(the "Maximum Availability"), as more fully set forth in this Section 2.1(a).
16
(i) Advances by Lenders.
(A) From time to time, but not more frequently
than three times in any calendar week, on the Funding Date requested by Borrower
in a Borrowing Notice delivered to Agent in accordance with SECTION 2.1(f),
after Borrower shall have satisfied all applicable conditions precedent set
forth in SECTION 2.11, each Lender severally shall make immediately available
funds available to Agent (each such advance being an "Advance") at the account
designated by Agent in writing in the amount of such Lender's Commitment
Percentage of one or more Base Rate Loans or LIBOR Loans specified in such
Borrowing Notice, each of which shall constitute a Revolving Credit Loan
hereunder and shall be in an amount equal to or greater than the Minimum
Borrowing Amount. Agent shall immediately advance such funds to Borrower at the
Designated Deposit Account on the Funding Date with respect to such Revolving
Credit Loan. The Revolving Credit Loans shall be evidenced by a promissory note
of Borrower in substantially the form of Exhibit A-1 (the "Note"), dated as of
the Closing Date and completed with appropriate insertions.
(B) The obligation of Lenders to make the
Revolving Credit Loans hereunder shall be limited at any time to the 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 of the date set forth in the most recent Borrowing Base
Certificate required to have been delivered pursuant to SECTION 5.1(d). Nothing
contained in this Agreement shall under any circumstance be deemed to require
any Lender to make any Advance in the aggregate principal amount, taking into
account the making of such Advance, which when added to such Lender's Commitment
Percentage of the outstanding principal amount of Revolving Credit Loans and
Swingline Loans, exceeds the lesser of (A) such Lender's Commitment and (B) such
Lender's Commitment Percentage of the Borrowing Base.
(C) If at any time and for any reason the sum
of (x) the aggregate principal outstanding under Revolving Credit Loans and (y)
the aggregate principal outstanding under Swingline Loans, shall exceed the
Maximum Availability (the amount of such excess, if any, being an
"Overadvance"), Borrower shall within two (2) Business Days (or five (5)
Business Days in the case of an Overadvance resulting from the removal of a
Lease from the Borrowing Base calculation upon the exercise by Requisite Lenders
of their rights under paragraph (e) of the definition of Eligible Lease) (i)
repay the full amount of such Overadvance, together with all interest accrued
thereon (with the amount of such repayment being applied first to Swingline
Loans and then to Revolving Credit Loans) or (ii) pledge additional Eligible
Leases to Agent, Swingline Lender and Lenders as Collateral for the Loans so as
to increase the Borrowing Base and eliminate the Overadvance, provided, that in
no event shall the sum of (x) the aggregate principal outstanding under
Revolving Credit Loans and (y) the aggregate principal outstanding under
Swingline Loans, exceed the aggregate Commitments and any remaining Overadvance
shall be immediately due and payable under clause (i) above. All Overadvances
shall be deemed to constitute Base Rate Loans.
17
(D) Amounts borrowed by Borrower hereunder may
be repaid and, prior to the Commitment Termination Date and subject to the
applicable terms and conditions precedent to borrowings set forth in SECTION
2.11, reborrowed; provided, however, that Borrower may not repay or reborrow
more than three times in any calendar week.
(E) Each request for a Revolving Credit Loan
hereunder shall constitute a reaffirmation by Borrower and the Responsible
Officer requesting the same in his or her capacity as such Responsible Officer
that the representations and warranties contained in this Agreement are true and
correct 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 and correct in all material respects as of such earlier date.
(F) The obligation of each Lender to make
Advances hereunder shall be several in proportion to such Lender's respective
Commitment Percentage, it being understood that no Lender shall be responsible
for any default by any other Lender in failing to advance funds hereunder, and
that no Lender's Commitment shall be affected by any such default by any other
Lender.
(ii) THE REVOLVING CREDIT LOANS. Subject to the terms and
conditions of this Agreement, Borrower may utilize the Commitments to request
one or more of the following types of Revolving Credit Loans (except that no
more than eight (8) LIBOR Loans shall be outstanding at any one time):
(A) BASE RATE LOANS. Each Base Rate Loan shall
be in an amount equal to or greater than the Minimum Borrowing Amount and shall
bear interest on the sum of the unpaid principal balance thereof outstanding on
each day until such Base Rate Loan shall have been fully repaid at a rate per
annum equal to the sum of (1) the Base Rate plus (2) the Rate Spread, as each
may fluctuate from time to time.
(B) LIBOR LOANS. Each LIBOR Loan shall be in
an amount equal to or greater than the Minimum Borrowing Amount and shall bear
interest on the sum of the unpaid principal balance thereof outstanding on each
day until such LIBOR Loan shall have been fully repaid at a rate per annum equal
to the sum of (1) Adjusted LIBOR applicable as at the Interest Rate
Determination Date with respect to such LIBOR Loan plus (2) the Rate Spread.
(C) INTEREST PAYMENT. Interest on each Base
Rate Loan outstanding hereunder shall be due and payable monthly in arrears on
the last day of each calendar month with all accrued and unpaid interest being
due and payable on the Commitment Termination Date. Interest on each LIBOR Loan
shall be due and payable on the last day of the applicable Interest Period.
18
All Revolving Credit Loans, all conversions and continuations of Loans
permitted under SECTION 2.1(i) and all repayments of principal with respect to
the Revolving Credit Loans shall be evidenced by notations made by Agent in its
books and records regarding the date, amount and maturity of each Revolving
Credit Loan made by Lenders and the amount of each payment of principal made by
Borrower with respect thereto; provided, however, that the failure by Agent to
make such notations shall not limit or otherwise affect the obligations of
Borrower with respect to the repayments of principal or payments of interest on
the Revolving Credit Loans. The aggregate unpaid amount of the Revolving Credit
Loans set forth on the books and records of Agent shall be presumptive evidence
of the principal amount owing and unpaid hereunder and under the Note.
(iii) PRINCIPAL REPAYMENT. The aggregate principal amount
outstanding as of the Commitment Termination Date under Revolving Credit Loans
shall be due and payable in full on such Commitment Termination Date, including,
without limitation, the aggregate principal amount outstanding under any LIBOR
Loans with respect to which the Interest Period extends beyond the Commitment
Termination Date.
(b) COMMITMENT TO MAKE SWINGLINE LOANS.
(i) Subject to and upon the terms and conditions herein set
forth, the Swingline Lender severally agrees, at any time and from time to time
on and after the Closing Date and prior to the Swingline Maturity Date, to make
a loan or loans (each a "Swingline Loan" and, collectively, the "Swingline
Loans") to the Borrower, which Swingline Loans:
(A) shall be Base Rate Loans;
(B) shall have the benefit of the provisions of
SECTION 2.1(b)(ii);
(C) shall not exceed in the aggregate at any one
time outstanding the Swingline Commitment at
such time;
(D) shall not exceed in the aggregate for all
Swingline Loans at any one time outstanding,
when combined with the aggregate principal
amount of all Revolving Credit Loans then
outstanding, the Maximum Availability then in
effect; and
(E) may be repaid and reborrowed in accordance with
the provisions hereof.
On the Swingline Maturity Date, all Swingline Loans shall be repaid in full. The
Swingline Lender will not make a Swingline Loan after it has received written
notice from the Requisite Lenders that one or more of the applicable conditions
precedent set forth in SECTION 2.11 are not then satisfied. In addition, at any
time when a Lender Default exists, the Swingline Lender shall
19
not be required to make a Swingline Loan exceeding the aggregate unused
Commitments of the non-defaulting Lenders, unless the Swingline Lender has
entered into arrangements satisfactory to it and Borrower to eliminate the
Swingline Lender's risk with respect to the participation in Mandatory
Borrowings by the Defaulting Lender or Lenders, including by cash
collateralizing same.
(ii) On any Business Day, either the Borrower or the
Swingline Lender may, in its sole discretion, give notice to Agent pursuant to
Section 2.1(f) that all then outstanding Swingline Loans shall be funded with a
borrowing of Revolving Credit Loans (provided that such notice shall be deemed
to have been automatically given by the Swingline Lender upon the occurrence of
a Default), in which case a borrowing of Revolving Credit Loans constituting
Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be made on
the Funding Date set forth in the Borrowing Notice, by all Lenders with
Commitments pro rata based on each Lender's Commitment Percentage, and the
proceeds thereof shall be applied directly to repay the Swingline Lender for all
outstanding Swingline Loans. Without limitation of the foregoing, each request
by Borrower for a Revolving Credit Loan pursuant to a Borrowing Notice shall be
deemed to include a request by Borrower pursuant to the preceding sentence to
fund all then outstanding Swingline Loans with a borrowing of Revolving Credit
Loans of the same type requested in such Borrowing Notice, in addition to any
Revolving Credit Loans requested in such Borrowing Notice. Each Lender hereby
irrevocably agrees to make Revolving Credit Rate Loans pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the date specified in writing by the Swingline Lender
notwithstanding:
(A) whether any conditions specified in Section 2.11
are then satisfied;
(B) whether a Default has occurred and is
continuing;
(C) the date of such Mandatory Borrowing; and
(D) any reduction in the Commitments after any such
Swingline Loans were made.
In the event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of Borrower),
each Lender with a Commitment (other than the Swingline Lender) hereby agrees
that it shall forthwith purchase from the Swingline Lender (without recourse or
warranty) such assignment of its outstanding Swingline Loans as shall be
necessary to cause the Lenders with Commitments to share in such Swingline Loans
ratably based upon their respective Commitment Percentages, provided that all
interest payable on such Swingline Loans shall be for the account of the
Swingline Lender until the date the respective assignment is purchased and, to
the extent attributable to the purchased assignment, shall be payable to the
Lender purchasing same from and after such date of purchase. Each Lender's
obligations under this SECTION 2.1(b)(ii) shall be absolute and unconditional.
20
(iii) The Swingline Loans shall be evidenced by a
promissory note of Borrower in substantially the form of EXHIBIT A-2 (the
"Swingline Note"), dated as of the Closing Date and completed with appropriate
insertions. The aggregate unpaid amount of the Swingline Loans set forth on the
books and records of Swingline Lender shall be presumptive evidence of the
principal amount owing and unpaid under the Swingline Note.
(iv) The Swingline Note issued to the Swingline Lender
shall: (i) be executed by Borrower; (ii) be payable to the order of the
Swingline Lender and be dated the Closing Date; (iii) be in a stated principal
amount equal to the Swingline Commitment and be payable in the principal amount
of Swingline Loans evidenced thereby; (iv) mature on the Swingline Maturity
Date; (v) bear interest on the sum of the unpaid principal balance thereof
outstanding on each day until the Swingline Loans shall have been fully repaid
at a rate per annum equal to the sum of (1) the Base Rate plus (2) the Rate
Spread, as each may fluctuate from time to time; (vi) be subject to mandatory
prepayment as provided in Section 2.1(a)(i)(C); and (vii) be entitled to the
benefits of this Agreement and the other Loan Documents.
(c) INCREASED COSTS. From time to time within thirty
(30) days of written notice, in reasonable detail, thereof from any Lender to
Borrower (with a copy to Agent), Borrower shall pay to Agent, on behalf of such
Lender, such amounts as such Lender may determine to be necessary to compensate
such Lender for any costs incurred by such Lender which such Lender determines
are attributable to its making or maintaining its Commitment Percentage of any
LIBOR Loan, or any reduction in any amount receivable by such Lender under this
Agreement or the Note in respect of such Loans or such obligation (such
increases in costs and reduction in amounts receivable being the "Additional
Costs"), resulting from any change after the date of this Agreement in any
federal, state, local or foreign law or regulation (including, without
limitation, Regulation D), the adoption or making after such date of any
interpretation, directive or requirement applying to a class of banks or
financial institutions, including such Lender, of or under any federal, state,
local or foreign law or regulation (whether or not having the force of law) by
any monetary authority or Governmental Agency charged with the interpretation or
administration thereof or from any other such regulatory development
(collectively, a "Regulatory Change"), which (a) adversely changes the basis of
taxation of any amounts payable to such Lender under this Agreement or the Note
in respect of such LIBOR Loans (other than taxes imposed on the overall net
income of such Lender), (b) imposes or modifies any reserve, special deposit or
similar requirement relating to any extension of credit or other assets of, or
any deposits with or other liabilities of, such Lender or (c) imposes any other
condition affecting this Agreement or the Note (or any of such extensions of
credit or liabilities). Such Additional Costs shall accrue commencing on the
"Effective Date" which shall be the earlier of (i) the date which is ten (10)
Business Days prior to the date of the written notice with respect to such
Additional Costs delivered from Lender to Borrower under this section or (ii)
the effective date of any such Regulatory Change that is applied retroactively;
provided, that in no event shall Borrower be obligated for any Additional Costs
under this SECTION 2.1(c) (x) relating to a period prior to the Effective Date,
or (y) if such Additional Costs, or substantially the same type of costs, are
not also imposed on other borrowers of such Lender who entered into similar
credit facilities with a similar pricing, taken as a whole, who have agreed to
pay such costs, at
21
the same time. Determinations by any Lender for purposes of this Section 2.1(c)
of the amount of such Additional Costs shall be presumptive evidence of the
same, provided that such determinations are made in good faith and on a
reasonable basis. Without affecting its rights under this Section 2.1(c) or any
other provision of this Agreement, each Lender agrees that if there is any
increase in any cost to or reduction in any amount receivable by such Lender
with respect to which Borrower would be obligated to compensate Lender pursuant
to this Section 2.1(c), such Lender shall use reasonable efforts to select an
alternative lending office which would not result in any such increase in any
cost to or reduction in any amount receivable by such Lender; provided, however,
that such Lender shall not be obligated to select an alternative lending office
if such Lender determines that (A) as a result of such selection such Lender
would be in violation of any applicable law, regulation, treaty, or guideline,
or would incur additional costs or expenses or (B) such selection would be
inadvisable for regulatory reasons or inconsistent with the interests of such
Lender. In the event any Lender is unable to select an alternative lending
office which would not result in any such increase in any cost to or a reduction
in any amount receivable by such Lender, and in the event such Lender demands
additional compensation pursuant to this Section 2.1(c), Borrower may (upon 30
days' prior written notice to Agent and such Lender) elect (1) to terminate the
Commitments of such Lender and prepay on the date of such termination any
outstanding Loans made by such Lender, together with accrued interest on any
such Loans, subject to payment of any amounts required pursuant to Section
2.2(b), or (2) to cause such Lender to assign its Loans and Commitments in full
to an assignee (so long as such Lender receives payment in full of the principal
amount of all Loans outstanding, together with all interest on such Loans and
other amounts payable to such Lender hereunder to the date of such assignment,
and such assignee agrees (pursuant to documentation in form and substance
reasonably acceptable to Agent and such Lender) to assume all of the obligations
of such Lender and, if requested by Agent, all of the obligations of Agent,
hereunder and release such Lender and Agent, if applicable, from all such
obligations); provided that the assignee shall be either (i) a Lender or (ii)
such other assignee as shall be consented to in writing by Agent and Requisite
Lenders, which consent shall not be unreasonably withheld. After such
assignment, such assignee bank shall be a "Lender" for all purposes hereunder
and under the other Loan Documents.
(d) ILLEGALITY OR IMPOSSIBILITY. Notwithstanding any
other provision of this Agreement, in the event Agent determines in good faith
that (a) the introduction of, any change in, or any change in the interpretation
or administration of any law or regulation after the date hereof by any
Governmental Agency charged with the interpretation or administration thereof
shall make it unlawful for any Lender to fund or maintain or charge interest
with respect to any LIBOR Loan, (b) by reason of circumstances affecting the
interbank markets, adequate and reasonable methods do not exist for determining
the LIBOR or (c) deposits of United States Dollars in the relevant amount for
the applicable term of a given LIBOR Loan are not available in the relevant
interbank markets (collectively, the "Affected Loans"), then Agent shall
promptly give notice of such determination to Borrower (which notice shall be
and binding). Upon such notification by Agent, Lenders shall have no obligation
to make any further Affected Loans unless the circumstances giving rise to such
determination no longer exist.
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(e) CAPITAL REQUIREMENTS. Notwithstanding any other
provision of this Agreement, in the event that any Lender or Swingline Lender
determines in good faith that either (a) the introduction of, any change in, or
any change in the interpretation or administration of, any law or regulation by
any governmental authority charged with the interpretation or administration
thereof or (b) compliance with any guideline or request from any such
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,
Swingline Lender or any corporation controlling such Lender or Swingline Lender
as a consequence of or with reference to such Lender's or Swingline Lender's
making or maintaining any commitment, credit, advance or other transaction
hereunder below the rate which such Lender, Swingline Lender or such other
corporation could have achieved but for such introduction, change or compliance
(taking into account the policies of such Lender, Swingline Lender or
corporation with regard to capital) (collectively, a "Capital Requirement
Change"), then Borrower shall from time to time, within thirty (30) days written
notice from such Lender or Swingline Lender, in reasonable detail describing
such Capital Requirement Change, pay to Agent, for the benefit of such Lender or
Swingline Lender, additional amounts sufficient to compensate such Lender,
Swingline Lender or such other corporation for such reduction ("Capital
Charges"). Each Lender and Swingline Lender agrees that it will provide Borrower
with written notice of any Capital Charge with respect to such Lender or
Swingline Lender arising under this SECTION 2.1(e). Such Capital Charges shall
accrue commencing on the "Capital Requirement Change Effective Date" which shall
be the earlier of (i) the date which is ten (10) Business Days prior to the date
of the written notice with respect to such Capital Charges delivered from Lender
or Swingline Lender to Borrower under this section or (ii) the effective date of
any such Capital Requirement Change that is applied retroactively; provided,
that in no event shall Borrower be obligated for any Capital Charges under this
SECTION 2.1(e) (x) relating to a period prior to the Capital Requirement Change
Effective Date, or (y) if such Capital Charges, or substantially the same type
of charges, are not also imposed on all borrowers of such Lender or Swingline
Lender, who have agreed to pay such charges, at the same time. Determinations by
any Lender or Swingline Lender for purposes of this SECTION 2.1(e) of the amount
of such Capital Charges shall be presumptive evidence of the same, provided that
such determinations are made in good faith and on a reasonable basis. Without
affecting its rights under this SECTION 2.1(e) or any other provision of this
Agreement, each Lender and Swingline Lender agrees that if in its good faith
determination there is any increase in any cost to or reduction in any amount
receivable by such Lender or Swingline Lender with respect to which Borrower
would be obligated to compensate such Lender or Swingline Lender pursuant to
this Section 2.1(e), Lender or Swingline Lender, as the case may be, shall use
reasonable efforts to select an alternative lending office which would not
result in any such increase in any cost to or reduction in any amount receivable
by such Lender or Swingline Lender; provided, however, that such Lender or
Swingline Lender shall not be obligated to select an alternative lending office
if such Lender or Swingline Lender determines that (A) as a result of such
selection such Lender or Swingline Lender would be in violation of any
applicable law, regulation, treaty, or guideline, or would incur additional
costs or expenses or (B) such selection would be inadvisable for regulatory
reasons or inconsistent with the interests of such Lender or Swingline Lender.
In the event any Lender or Swingline Lender is unable to select an alternative
lending office which would not result in any such
23
increase in any cost to or a reduction in any amount receivable by such Lender
or Swingline Lender, and in the event such Lender or Swingline Lender demands
additional compensation pursuant to this SECTION 2.1(e), Borrower may (upon 30
days' prior written notice to Agent and such Lender or Swingline Lender) elect
(1) to terminate the Commitments of such Lender or Swingline Lender and prepay
on the date of such termination any outstanding Loans made by such Lender or
Swingline Lender, together with accrued interest on any such Loans, subject to
payment of any amounts required pursuant to SECTION 2.2(b), or (2) to cause such
Lender or Swingline Lender to assign its Loans, Swingline Commitment and
Commitments in full to an assignee (so long as such Lender or Swingline Lender
receives payment in full of the principal amount of all Loans outstanding,
together with all interest on such Loans and other amounts payable to such
Lender or Swingline Lender hereunder to the date of such assignment, and such
assignee agrees (pursuant to documentation in form and substance reasonably
acceptable to Agent and such Lender or Swingline Lender) to assume all of the
obligations of such Lender or Swingline Lender hereunder, and, if requested by
Agent, all of the obligations of Agent, hereunder and release such Lender,
Swingline Lender, if applicable, and Agent, if applicable, from all such
obligations); provided that the assignee shall be either (i) a Lender or (ii)
such other assignee as shall be consented to in writing by Agent and Requisite
Lenders, which consent shall not be unreasonably withheld. After such
assignment, such assignee bank shall be a "Lender" and "Swingline Lender," if
applicable, for all purposes hereunder and under the other Loan Documents.
(f) SPECIAL NOTICE REQUIREMENTS. Whenever
Borrower desires to utilize the Commitment hereunder, Borrower shall give
written notice or telephonic notice promptly confirmed in writing (each such
notice, together with each notice of the incurrence of Swingline Loans pursuant
to SECTION 2.1(g), a "Borrowing Notice") to Agent at 000 Xxxxx Xxxxxx, Xxxxx
000, Xxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxxx or Xxxxxxxxx
Xxxxxxxx (phone: (000) 000-0000, fax: (000) 000-0000), and which notice shall
comply with the following requirements:
(i) For Base Rate Loans other than Swingline
Loans, a Borrowing Notice specifying that a Base Rate Loan is requested, the
amount thereof and the proposed Funding Date, must be received by Agent no later
than 1:00 p.m., California time, two (2) Business Days prior to the Funding Date
for such Loan.
(ii) For LIBOR Loans, a Borrowing Notice must be
received by Agent no later than 11:00 a.m., California time, four (4) Business
Days preceding the Funding Date for such Loan, specifying that a LIBOR Loan is
requested, the amount and Interest Period thereof and the proposed Funding Date.
(iii) For all Loans, the Borrowing Notice may be
accompanied by, at Borrower's election, an updated Borrowing Base Certificate.
Promptly following receipt of notice as provided in this SECTION 2.1(f),
Agent shall notify by telephone, facsimile or telex each Lender of the principal
amount (including such Lender's
24
Commitment Percentage thereof), and type and Funding Date of the Loan being
requested by Borrower. For purposes of this SECTION 2.1(f), notice received by
Agent from Borrower after 1:00 p.m., California time, on any day shall be deemed
to be received on the next succeeding Business Day. Not later than 11:00 a.m.,
California time, on the Funding Date for such Loan, each Lender shall make
advances to Agent for the account of Borrower in the amount of its Commitment
Percentage of the Loan being requested by Borrower. Provided that the applicable
conditions precedent set forth in SECTION 2.11 have been satisfied, not later
than 3:00 p.m. California time on such Funding Date, Agent shall advance to the
Designated Deposit Account all such advances received from Lenders. In the event
that the applicable conditions precedent are not satisfied within two (2)
Business Days, then Agent shall return to each Lender any such advances made by
such Lender to Agent and Agent shall pay on its own behalf, interest at the
Federal Funds Rate.
(g) NOTICE OF SWINGLINE LOANS. Whenever Borrower desires
to incur Swingline Loans hereunder, it shall give Agent written notice (or
telephonic notice promptly confirmed in writing) of each borrowing of Swingline
Loans prior to 1:00 p.m. (California time) one (1) Business Day prior to the
date of such borrowing. Each such notice shall be irrevocable and shall specify
(i) the aggregate principal amount of the Swingline Loans to be made pursuant to
such borrowing and (ii) the date of borrowing (which shall be a Business Day).
Agent shall promptly give the Swingline Lender written notice (or telephonic
notice promptly confirmed in writing) of each proposed borrowing of Swingline
Loans and of the other matters covered by the Borrowing Notice.
(h) NOTICE OF MANDATORY BORROWINGS. Mandatory Borrowings
shall be made upon the notice specified in Section 2.1(b)(ii), with Borrower
irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of
Mandatory Borrowings as set forth in such Section.
(i) CONVERSION AND CONTINUATION OF LOANS. Borrower
shall have the right on prior irrevocable written notice to Agent to (a) convert
any LIBOR Loan to a Base Rate Loan; (b) convert any Base Rate Loan (other than
Swingline Loans), or a portion thereof, to a LIBOR Loan, specifying the Interest
Period applicable thereto; (c) convert the Interest Period with respect to any
LIBOR Loan to another permissible Interest Period; and (d) continue any LIBOR
Loan into a subsequent Interest Period of the same or a different permitted
duration, in each case subject to the satisfaction of the following conditions:
(i) The notice required to be received by Agent
from Borrower hereunder prior to the conversion or continuation of any Loan
shall have been received no later than the time required for receipt of notice
by Agent for the making of the Loan (A) being continued or (B) into which
another Loan is being converted;
(ii) Accrued interest on a Loan (or portion
thereof) being converted or continued shall continue to be paid quarterly in
arrears, except that such amounts shall be paid by Borrower at the time of
conversion or continuation if Agent shall so specify;
25
(iii) LIBOR Loans may be converted or continued
only on the last day of the applicable Interest Period except with the payment
of such fees as may be due pursuant to Section 2.2(b);
(iv) LIBOR Loans may not be converted or
continued into an Interest Period having a maturity date occurring after the
Commitment Termination Date;
(v) LIBOR Loans may not be converted or
continued if more than eight (8) LIBOR Loans would be outstanding as a result of
such conversion or continuation;
(vi) Each Base Rate Loan being converted into a
LIBOR Loan and each Loan being continued into another LIBOR Loan shall be in the
minimum principal outstanding amount of at least $1,000,000;
(vii) Any conversion or continuation of any Loan
shall be subject to the satisfaction of the conditions precedent to all Loans
set forth in Sections 2.11(b)(i), (ii), (iii), (iv), (vii) and (viii) at the
time of conversion or continuation; and
(viii) Any conversion or continuation of any Loan
under this Section 2.1(i) shall be made according to each Lender's Commitment
Percentage.
The Interest Period applicable to any LIBOR Loan resulting from a conversion
shall be specified by Borrower in the notice delivered pursuant to this Section;
provided, however, that if no such Interest Period shall be specified, Borrower
shall be deemed to have selected an Interest Period of one (1) month's duration.
(j) LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of an interest
rate for any LIBOR Loans for any Interest Period therefor, Requisite Lenders
determine (which determination shall be conclusive, provided that such
determination shall be made in good faith upon a reasonable basis) that the
rates of interest referred to in the definition of "LIBOR" upon the basis of
which the rate of interest on any LIBOR Loans for such period is determined do
not accurately reflect the cost to Requisite Lenders of making or maintaining
such Loans for such period, then Agent shall give Borrower prompt notice thereof
(and shall thereafter give Borrower prompt notice of the cessation, if any, of
such condition), and so long as such condition remains in effect, Lenders shall
be under no obligation to make LIBOR Loans or to convert Base Rate Loans into
LIBOR Loans and Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding LIBOR Loans either prepay such LIBOR Loans in
accordance with Section 2.2(a) hereof (subject to SECTION 2.2(b) hereof) or
convert such LIBOR Loans into Base Rate Loans in accordance with SECTION 2.1(i)
hereof.
2.2 PREPAYMENT.
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(a) VOLUNTARY PREPAYMENT. Loans that are LIBOR Loans
may be prepaid without premium or penalty on the last day of any Interest Period
applicable thereto and, subject to payment of amounts required pursuant to
SECTION 2.2(b), may be prepaid at any other time, in each case upon three
Business Days' irrevocable notice. Loans that are Base Rate Loans may be prepaid
at any time, without premium or penalty, upon one Business Day's irrevocable
notice. If such notice is given by Borrower, Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 2.2(b), in
immediately available funds delivered to Agent not later than 11:00 a.m.,
California time.
(b) PAYMENTS NOT AT END OF INTEREST PERIOD. If Borrower
for any reason makes any payment of principal with respect to any LIBOR Loan on
any day other than the last day of an Interest Period applicable to such LIBOR
Loan, including, without limitation, the payment of principal due on the
Commitment Termination Date with respect to any LIBOR Loan where the Interest
Period with respect to such LIBOR Loan extends beyond the Commitment Termination
Date, or fails to borrow or continue or convert to a LIBOR Loan after giving a
Borrowing Notice or notice of conversion pursuant to Section 2.1(i), promptly
upon written notice thereof from Agent, Borrower shall pay to Agent for the
account of each Lender an amount computed pursuant to the following formula:
L = (R - T) x P x D
---------------
360
L = amount payable to Agent for the account of the Lenders
R = interest rate on such Loan
T = effective interest rate per annum at which any readily marketable
bond or other obligation of the United States, selected at FNBB's
sole discretion, maturing on or near the last day of the then
applicable Interest Period of such Loan and in approximately the
same amount as such Loan can be purchased by FNBB on the day of
such payment of principal or failure to borrow or continue or
convert
P = the amount of principal prepaid or the amount of the requested
Loan
D = the number of days remaining in the Interest Period as of the date
of such payment or the number of days of the requested Interest
Period
Borrower shall pay such amount promptly upon presentation by Agent of a
statement setting forth the amount and Agent's calculation thereof pursuant
hereto, which statement shall be deemed true and correct absent manifest error.
27
2.3 FEES AND COMMISSIONS
(a) COMMITMENT FEE. In consideration of Lenders'
agreement to commit to make the Loans available to Borrower, Borrower agrees to
pay to Agent on behalf of Lenders a commitment fee from the Closing Date until
the Commitment Termination Date in an amount equal to one-quarter of one percent
(0.25%) per annum of the average daily difference between (a) the Commitments
and (b) the sum of the aggregate outstanding principal amount of Loans. All such
fees shall be due and payable each quarter in arrears, commencing September 30,
1996, with the final such payment due and payable on the Commitment Termination
Date.
(b) AGENT'S FEE. Borrower shall pay to Agent for Agent's
own account an agency fee in the amount and at the times set forth in the
Agent's Fee Letter.
2.4 CALCULATION OF INTEREST; POST-DEFAULT INTEREST. Interest on
the Loans shall be computed on the basis of a 360-day year and the actual number
of days elapsed in the period during which it 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; provided, however, that if a Loan is repaid on the
same day on which it is made, such day shall be included in computing interest
on such Loan. Each change in the interest rate of the Loans based on changes in
the Base Rate or Adjusted LIBOR, as the case may be, shall be effective on the
effective date of such change and to the extent of such change. Agent shall give
Borrower notice of any such change in the Base Rate or Adjusted LIBOR; provided,
however, that any failure by Agent to provide Borrower with notice hereunder
shall not affect Lenders', Swingline Lender's, or Agent's right to make changes
in the interest rate applicable to the Loans based on changes in the Base Rate
or Adjusted LIBOR, as the case may be. Upon the occurrence and during the
continuation of an Event of Default, the Loans shall thereafter bear interest
payable upon demand at a rate which is two percent (2.0%) above the rate of
interest otherwise applicable thereto (the "Default Rate").
2.5 PAYMENTS.
(a) All payments of principal, interest and fees hereunder
and under the Note and the Swingline Note shall be in lawful money of the United
States of America in immediately available funds and shall be debited from the
Designated Deposit Account by Agent, for the account of Lenders and Swingline
Lender, on the date the same shall become due and payable. Borrower hereby
authorizes Agent, and irrevocably constitutes and appoints Agent (and any
officer or agent thereof, with full power of substitution) as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Borrower and in the name of Borrower or in its own name (which
appointment is coupled with an interest), to debit directly from the Designated
Deposit Amount, the full amount (or any portion thereof) of the Obligations of
Borrower to Lenders, Swingline Lender and Agent hereunder (including all
principal, accrued interest, commitment and other fees, and other amounts
chargeable to Borrower under this Agreement) when and as the same shall become
due and payable. Agent shall provide prompt notice to Borrower of any such
debit.
28
(b) All payments by Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes (except as set forth below),
levies, imposts, duties, charges, fees, deductions, withholdings (except as set
forth below), compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political subdivision
thereof or taxing or other authority therein unless Borrower is compelled by law
to make such deduction or withholding. If any such obligation is imposed upon
Borrower with respect to any amount payable by it hereunder or under any of the
other Loan Documents, Borrower will pay to Agent, for the account of Lenders or
(as the case may be) Swingline Lender or Agent, on the date on which such amount
is due and payable hereunder or under such other Loan Document, such additional
amount in dollars as shall be necessary to enable Lenders, Swingline Lender or
Agent to receive the same net amount which Lenders, Swingline Lender or Agent
would have received on such due date had no such obligation been imposed upon
Borrower. Borrower will deliver promptly to Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by Borrower hereunder or under such other Loan Document. Borrower
shall not be liable for taxes paid by Agent, Swingline Lender or Lenders which
are based upon Agents's, Swingline Lender's or any Lender's net income or for
any withholding required to made pursuant to applicable law which are credited
against taxes based on Agent's, Swingline Lender's or a Lender's net income. If
any Lender or Swingline Lender shall obtain a credit with respect to all or part
of any tax indemnified by Borrower pursuant to this SECTION 2.5(b), then, to the
extent such items have not previously been taken into account in computing the
amount of any payment pursuant to this sentence or the amount of indemnification
payable under this SECTION 2.5(b), such Lender or Swingline Lender shall
promptly pay to Borrower an amount equal to the amount of such credit, reduced
by the amount of any prior payments by such Lender or Swingline Lender to, or
for the benefit of, Borrower arising from the same claim. All computations
required hereunder shall be made by such Lender or Swingline Lender, acting
reasonably and in good faith and the results of such computations shall be
delivered to Borrower. At the request and expense of Borrower the accuracy of
such computations shall be verified by such Lender's or Swingline Lender's
independent accountants. The computations of such accounting firm shall be
firmly binding and conclusive on Borrower and such Lender or Swingline Lender.
Borrower shall have no right to examine or otherwise have access to the books
and records of such Lender or Swingline Lender or otherwise have access to its
tax returns.
2.6 PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder, under the Note, or under the Swingline Note 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 hereunder, under the
Note, or under the Swingline Note.
2.7 APPLICATION OF PAYMENTS. Borrower irrevocably waives the right
to direct the application of any and all payments at any time hereafter received
by Agent from or on behalf of Borrower, and Borrower irrevocably agrees that
Agent on behalf of Lenders and Swingline
29
Lender shall have the continuing exclusive right to apply any and all such
payments against the then due and owing Obligations of Borrower as Agent may
deem advisable. In the absence of a specific determination by Agent with respect
thereto, the same shall be applied in the following order: (a) then due and
payable fees and expenses of Swingline Lender (in its capacity as Swingline
Lender), then due and payable interest payments and mandatory prepayments on
Swingline Loans, and then due and payable principal payments and optional
prepayments on Swingline Loans; (b) then due and payable fees and expenses of
Agent and Lenders; (c) then due and payable interest payments and mandatory
prepayments on Revolving Credit Loans; and (d) then due and payable principal
payments and optional prepayments on Revolving Credit Loans. Agent is authorized
to, and at its sole option may, make advances on behalf of Borrower for payment
of all fees, expenses, charges, costs, principal and interest incurred hereunder
or under the other Loan Documents. To the extent permitted by law, all amounts
advanced by Agent or any Lender hereunder or under other provisions of the Loan
Documents shall be deemed for the purpose of accruing interest thereon, as
constituting a Base Rate Loan.
2.8 DISTRIBUTION OF PAYMENTS. Agent shall immediately distribute
to each Lender and Swingline Lender, at such address as each Lender and
Swingline Lender shall designate, its respective interest in all repayments and
prepayments of principal and all payments of interest, fees, expenses and costs
received by Agent on the same day and in the same type of funds as payment was
received.
2.9 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 any Loan that such Lender does not
intend to make available to Agent immediately available funds equal to such
Lender's Commitment Percentage 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 Borrower
a corresponding Advance. If Agent has made funds available to 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 (the "Defaulting Lender") does not
promptly pay such corresponding amount upon Agent's demand, Agent shall (a) to
the extent that there is availability under the Commitments of the Lenders other
than the Defaulting Lender, notify such Lenders and each such Lender severally
shall make immediately available funds available to Agent at the account
designated by Agent in writing in an amount equal to the lesser of such Lender's
Commitment Percentage of such corresponding amount and such Lender's remaining
Commitment, which amounts advanced shall be deemed to be Advances under this
Agreement; provided, that for purposes of this Section, the Commitment
Percentage of each Lender shall be calculated without regard to the Commitment
of the Defaulting Lender; provided further, that nothing herein shall be deemed
to increase the Commitment of any Lender; and (b) to the extent that (i) there
is no further availability under the Commitments or (ii) Agent is not promptly
reimbursed under SECTION 2.9(a), Agent shall notify Borrower and Borrower shall
repay such Advance to Agent. Agent also shall be entitled to recover from the
Defaulting Lender interest on such Advance in respect of each day from the date
such Advance was made by Agent to Borrower to the date such
30
corresponding amount is recovered by Agent at the Federal Funds Rate. Nothing in
this Section 2.9 shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments or to prejudice any rights which Agent, any other Lender
or Borrower may have against such Defaulting Lender as a result of any default
by such Defaulting Lender under this Agreement.
2.10 AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY BORROWER.
Unless Agent shall have been notified by Borrower prior to the date on which any
payment to be made by Borrower hereunder is due that Borrower does not intend to
remit such payment, Agent may, in its discretion, assume that Borrower has
remitted such payment when so due and Agent may, in its discretion and in
reliance upon such assumption, make available to each Lender on such payment
date an amount equal to such Lender's Commitment Percentage of such assumed
payment. If 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.
2.11 CONDITIONS PRECEDENT TO LOANS.
(a) FIRST LOAN. The obligation of Lenders or Swingline
Lender to make the first Loan hereunder is subject to the following conditions
precedent:
(i) Agent shall have received in form and
substance satisfactory to Requisite Lenders and Agent and their special counsel
the following:
(A) A certified copy of the records of
all actions taken by Borrower including resolutions of Borrower authorizing or
relating to the execution, delivery and performance of the Loan Documents and
the consummation of the transactions contemplated hereby;
(B) Articles of Incorporation and
Bylaws and any other charter or formation documents of Borrower certified by an
officer of Borrower as in full force and effect;
(C) Certificate of the Secretary of
State of California stating that Borrower is a corporation in good legal
standing under the laws of the State of California;
(D) Certificate of the California
Franchise Tax Board as to the tax good standing of Borrower; and
(E) Certificates of incumbency and
signature with respect to the authorized officers of Borrower executing the Loan
Documents.
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(ii) Agent shall have received the Note, duly
executed by Borrower, dated on or prior to the First Funding Date with
appropriate insertions.
(iii) Swingline Lender shall have received the
Swingline Note, duly executed by Borrower, dated on or prior to the First
Funding Date with appropriate insertions.
(iv) Agent shall have received an originally
executed opinion of counsel for Borrower, satisfactory to Lenders and Agent and
their special counsel, dated on or prior to the First Funding Date and addressed
to each Lender and Agent, which opinion shall be substantially in the form of
Exhibit C.
(v) Borrower shall have executed and delivered
to Agent on behalf of Lenders a Security Agreement substantially in the form of
EXHIBIT B.
(vi) Agent shall have received a certificate of
insurance of Borrower with respect to such insurance as is required to be
maintained by Borrower pursuant to SECTION 5.3 of the Agreement.
(vii) Agent shall have received financial
statements of recent date, in a form reasonably satisfactory to Agent, of
Borrower, which fairly present the financial position of Borrower as of such
date and the results of Borrower's operations for such period then ended, but
subject, however, to the absence of footnotes and to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount to Borrower.
(viii) Agent shall have received an executed
original of Agent's Fee Letter.
(ix) Agent shall have received a Borrowing Base
Certificate.
(x) Agent shall have received such other
documents, information and items from Borrower as reasonably requested by Agent.
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(b) ALL LOANS. The obligation of Lenders and Swingline
Lender to make any Loan is subject to the following further conditions precedent
hereunder that:
(i) Borrower shall have performed all of its
agreements under the Loan Documents to be performed on or before such Funding
Date.
(ii) No event shall have occurred and be
continuing or would result from the consummation of any Loans to be made on such
Funding Date which constitutes an Event of Default or Potential Event of
Default.
(iii) All representations and warranties contained
in the Loan Documents shall be true and correct 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 and correct as of such earlier
date).
(iv) The insurance required to be maintained by
Borrower pursuant to the Loan Documents shall be in full force and effect.
(v) Agent shall have received the following
documents pertaining to each Eligible Lease which is included in the Borrowing
Base calculation:
(A) A Schedule (in the form of SCHEDULE
1 to the Security Agreement) describing such Lease and the Equipment covered
thereby, duly executed by Borrower;
(B) As to any Lease for which any of
the Equipment is titled to the lessee prior to the time that title passes to
Borrower, an opinion of counsel to Borrower (or opinion of counsel for the
lessee, acceptable to Requisite Lenders) that such transfer does not constitute
a fraudulent conveyance or voidable transfer under the law of the relevant
jurisdiction, including without limitation, for Equipment located in California,
Section 3440 of the California Civil Code; provided, however, that this CLAUSE
(C) shall not apply to (i) the funding of Leases in respect of which the total
obligations thereunder of the lessee under such Leases to Borrower will not
exceed, in the aggregate, $5,000,000, or (ii) a transaction approved by
Requisite Lenders, which approval shall not be unreasonably withheld or delayed;
provided further, however, that notwithstanding the foregoing, in the case of a
funding of Leases in respect of which the total obligations of lessee to
Borrower thereunder will exceed, in the aggregate, $500,000, Borrower shall
comply with the requirements of Section 3440 of the California Civil Code in the
case of Equipment located in California or any similar legislation providing for
written notice of such a transaction, if any, in any other State where the
Equipment is located.
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(vi) On or before the Funding Date, such UCC
financing statements, amendments, termination statements, and other documents or
instruments shall have been executed and delivered, as Agent deems necessary or
appropriate to provide Agent, on behalf of Lenders, a first priority, perfected
security interest in the particular Leases included in the Borrowing Base
calculation and the Equipment subject to such Leases.
(vii) Agent shall have received such other
instruments and documents as Agent, on behalf of Lenders, may have reasonably
requested from Borrower in connection with the Loans to be made on such date.
(viii) There shall have been no material adverse
change in the financial condition, profits or business of Borrower, taken as a
whole, in the opinion of Requisite Lenders, in its sole discretion, between the
date of this Agreement and the Funding Date.
2.12 FUNDING SOURCES. Nothing contained herein shall be deemed to
obligate Lenders to fund any Loan hereunder in any particular place or manner
and nothing contained herein shall be deemed to constitute a representation of
any Lender or Agent that it has funded or will fund any Loan hereunder in any
particular place or manner.
2.13 SHARING OF PAYMENTS, ETC. If, other than as expressly
provided elsewhere herein, any Lender shall obtain on account of the Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Commitment Percentage of
payments on account of the Loans obtained by all the Lenders, such Lender shall
forthwith (a) notify Agent of such fact, and (b) purchase from the other Lenders
such participations in the Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid therefor, together with an amount equal to such paying
Lender's Commitment Percentage (according to the proportion of (i) the amount of
such paying Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this SECTION 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to SECTION 11.7) with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation. Agent
will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased pursuant to this SECTION 2.13 and
will in each case notify Lenders following any such purchases or repayments.
3. COLLATERAL SECURITY.
All of the Obligations of Borrower to Agent, Swingline Lender and
Lenders arising hereunder and under the other Loan Documents, including, without
limitation, all Obligations of
34
Borrower arising in respect of the Loans, shall be secured by the Collateral in
accordance with the terms of the Security Agreement.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES.
The Borrower hereby warrants and represents to Lenders and Swingline
Lender as follows, and agrees that each of said warranties and representations
shall be deemed to continue until full and complete payment and performance of
the Obligations and shall apply anew to each borrowing hereunder:
4.1 ORGANIZATION AND QUALIFICATION. Borrower and each of its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as now
conducted and (c) is duly qualified and in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where the
nature of its properties or business requires such qualification except where
the failure to be so qualified would not have a Material Adverse Effect.
4.2 CORPORATE AUTHORITY. The execution, delivery and performance
of this Agreement and the Loan Documents and the transactions contemplated
hereby are within the corporate power and authority of the Borrower and have
been authorized by all necessary corporate proceedings, and do not and will not
(a) require any consent or approval of the shareholders of the Borrower, (b)
contravene any provision of the organizational or charter documents or by-laws
of the Borrower or any law, rule or regulation applicable to the Borrower
presently in effect and the contravention of which would result in the
occurrence of a Material Adverse Effect, (c) constitute an event of default or
event that, but for the requirement that time elapse or notice be given, or
both, would constitute an event of default under, any other agreement,
instrument, order or undertaking presently in effect and binding on the
Borrower, which event of default would have a Material Adverse Effect, or (d)
result in or require the imposition of any Liens on any of the properties,
assets or rights of the Borrower, other than pursuant to the Loan Documents.
4.3 VALID OBLIGATIONS. This Agreement and the Loan Documents and
all of their respective terms and provisions are the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting the enforcement of creditors' rights generally, and
except as the remedy of specific performance or of injunctive relief is subject
to the discretion of the court before which any proceeding therefor may be
brought.
4.4 CONSENTS OR APPROVALS. The execution, delivery and performance
of this Agreement and the Loan Documents and the transactions contemplated
herein do not require any approval or consent of, or filing or registration
with, any Governmental Agency, or any other party, the failure of which to
obtain would have a Material Adverse Effect.
35
4.5 TITLE TO COLLATERAL; ABSENCE OF ENCUMBRANCES. Borrower has
good and marketable title to all of the Collateral, free from all Liens except
Permitted Liens. Borrower has good and marketable title to all of the
properties, assets and rights as are reflected as being owned by Borrower in the
financial statements referred to in Section 4.6 (except such properties, assets
or rights as have been disposed of in the ordinary course of business since the
date thereof), free from any blanket Liens on all or substantially all of such
properties, assets and rights.
4.6 FINANCIAL STATEMENTS. Borrower has furnished Agent its
consolidated balance sheet as of December 31, 1995 and its consolidated
statements of income, changes in shareholders' equity and cash flow for the
fiscal year then ended, and related footnotes, audited and certified by Deloitte
& Touche LLP. Borrower has also furnished Agent its consolidated balance sheet
as of June 30, 1996 and its consolidated statements of income, changes in
stockholders' equity and cash flow for the six months then ended, which are
hereby certified by the principal financial officer of Borrower to present
fairly the financial position of Borrower and its Subsidiaries as of such dates
and the results of the operations of Borrower and its Subsidiaries for such
period, but subject, however, to the absence of footnotes and to normal,
recurring year-end adjustments that shall not in the aggregate be material in
amount to Borrower and its Subsidiaries taken as a whole. All such financial
statements were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods specified and
present fairly the financial position of Borrower and its Subsidiaries as of
such dates and the results of the operations of Borrower and its Subsidiaries
for such periods. There are no liabilities, contingent or otherwise, not
disclosed in such financial statements that involve an amount material to
Borrower and its Subsidiaries, taken as a whole.
4.7 CHANGES. Since the date of the most recent financial
statements referred to in Section 4.6, there have been no changes in the assets
and liabilities (taken as a whole), financial condition or business of the
Borrower and its Subsidiaries, taken as a whole, that have not been otherwise
disclosed to Lenders other than changes in the ordinary course of business, the
effect of which has not, in the aggregate, resulted in a Material Adverse
Effect.
4.8 DEFAULTS. As of the date of this Agreement and the Closing
Date, no Default exists.
4.9 TAXES. The Borrower and its Subsidiaries have filed all
foreign, federal, state and other tax returns required to be filed, and all
taxes, assessments and other governmental charges due from the Borrower and its
Subsidiaries have been fully paid or are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
established and are being maintained in accordance with GAAP, other than where a
failure to file or pay the same would not have a Material Adverse Effect.
4.10 LITIGATION. There is no litigation, arbitration, proceeding
or investigation pending, or, to the knowledge of the Borrower, threatened,
against Borrower or any of its Subsidiaries that, if adversely determined, could
result in a forfeiture of all or any substantial
36
part of the property of Borrower or Borrower and its Subsidiaries, taken as a
whole, or could otherwise have a Material Adverse Effect.
4.11 USE OF PROCEEDS. The Borrower does not own any "margin
security", as that term is defined in Regulations G and U of the Federal Reserve
Board, and the proceeds of the Loans under this Agreement will be used only for
purposes not prohibited 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 G, T, U and X. The Borrower will not
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.
4.12 INVESTMENT COMPANY ACT. Neither of the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended.
4.13 COMPLIANCE WITH ERISA. Borrower has fulfilled its obligations
under the minimum funding standards of ERISA and the Code with respect to each
of its Employee Plans and is in compliance in all material respects with the
applicable provisions of ERISA and the Code, and has not incurred any liability
to the PBGC or an Employee Plan under Title IV of ERISA. No "prohibited
transaction" or "reportable event" (as such terms are defined in ERISA) has
occurred with respect to any of its Employee Plans.
4.14 ENVIRONMENTAL MATTERS.
(i) Borrower and each of its Subsidiaries has obtained all
permits, licenses and other authorizations which are required under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a Material Adverse Effect. The Borrower
and each of its Subsidiaries are in compliance with the terms and conditions of
all such permits, licenses and authorizations, and are also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have a Material
Adverse Effect.
(ii) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed and served on Borrower or any Subsidiary, no penalty has been assessed and
no investigation or review is pending or, to the knowledge of Borrower,
threatened by any governmental or other entity with respect to any alleged
failure by the Borrower or any of its Subsidiaries to have any permit, license
or authorization required in connection with conduct of its business or with
respect to any Environmental Laws, including, without limitation, Environmental
Laws relating to the
37
generation, treatment, storage, recycling, transportation, disposal or release
of any Hazardous Materials, except to the extent that such notice, complaint,
penalty or investigation did not or could not result in the remediation of any
property owned or used by the Borrower or any of its Subsidiaries costing in
excess of $1,000,000 per occurrence or $1,000,000 in the aggregate.
(iii) To the knowledge of Borrower, no material oral or
written notification of a release of a Hazardous Material has been filed by or
on behalf of Borrower or any of its Subsidiaries and no real property now or
previously owned, leased or used by Borrower or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or on any similar state list of sites requiring investigation or clean-
up.
(iv) To the knowledge of Borrower there are no Liens
arising under or pursuant to any Environmental Laws on any of the real property
or properties owned, leased or used by Borrower or any of its Subsidiaries and
no governmental actions have been taken or are in process which could subject
any of such properties to such Liens or as a result of which Borrower or any of
its Subsidiaries would be required to place any notice or restriction relating
to the presence of Hazardous Materials at any property owned by it in any deed
to such property.
(v) Neither of the Borrower nor any of its Subsidiaries
nor, to the knowledge of Borrower, any previous owner, tenant, occupant or user
of any real property owned, leased or used by Borrower or any of its
Subsidiaries has (i) engaged in or permitted any operations or activities upon
or any use or occupancy of such property, or any portion thereof, for the
purpose of or in any way involving the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal
(whether legal or illegal, accidental or intentional) of any Hazardous Materials
on, under, in or about such property, except to the extent commonly used in the
business conducted on such property and, in such case, in compliance with all
Environmental Laws except to the extent failure to comply would not have a
Material Adverse Effect, or (ii) transported any Hazardous Materials to, from or
across such property except to the extent commonly used in the business
conducted on such property and, in such case, in compliance with all
Environmental Laws except to the extent failure to comply would not have a
Material Adverse Effect; nor to the knowledge of Borrower have any Hazardous
Materials migrated from other properties upon, about or beneath such property;
nor, to the knowledge of Borrower, are any Hazardous Materials presently
deposited, stored or otherwise located on, under, in or about such property
except to the extent commonly used in the business conducted on such property
and, in such case, in compliance with all Environmental Laws except to the
extent failure to comply would not have a Material Adverse Effect.
5. BORROWER'S AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any funds hereunder
shall be available for borrowing and until payment in full of the Note and the
Swingline Note, unless Requisite Lenders shall otherwise consent in writing,
Borrower shall do all of the following:
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5.1 RECORDS AND REPORTS. Maintain a system of accounting in
accordance with GAAP and furnish to Agent, Swingline Lender and Lenders:
(a) AUDITED FINANCIAL STATEMENTS. As soon as available
and in any event within ninety (90) days after the end of each fiscal year of
Borrower, a copy of the audited financial statements of Borrower, including a
balance sheet, a profit and loss statement, and statement of changes in
stockholders' equity and cash flow, as at the close of and for such fiscal year,
all in reasonable detail and in consolidated form, and stating in comparative
form the figures as at the close and for the previous fiscal year, together with
the unqualified opinion thereon of a nationally recognized accounting firm.
(b) UNAUDITED FINANCIAL STATEMENTS. As soon as available,
and in any event within forty-five (45) days after the close of each quarter
which is not the end of a fiscal year, a balance sheet, profit and loss
statement and a statement of source and application of funds as at the close of
such quarter and covering operations for the portion of Borrower's fiscal year
ending on the last day of such quarter, all in reasonable detail, in
consolidated form, all prepared in accordance with GAAP on a basis consistently
maintained by Borrower and certified by a Responsible Officer, subject, however,
to year-end audit adjustments.
(c) COMPLIANCE CERTIFICATES. As soon as available and in
any event within forty-five (45) days of the end of each quarter and at such
other times as shall be required hereunder, a Compliance Certificate (together
with a schedule of calculation of items reflected therein) in the form of
Exhibit D, certified by a Responsible Officer. Without limitation of the
foregoing, the Compliance Certificate shall include a representation and
warranty (i) as to any new Subsidiaries created since the date of the next
preceding Compliance Certificate, and (ii) as to any Liens on the stock owned by
Borrower of any Subsidiary.
(d) BORROWING BASE CERTIFICATES. As soon as available and
in any event within fifteen (15) days of the end of each month and at such other
times as shall be required hereunder, a Borrowing Base Certificate (together
with a schedule of calculation of items reflected therein) in the form of
Exhibit F, certified by a Responsible Officer. Without limitation of the
foregoing, if Borrower discovers that any of Borrower's representations or
warranties made in any Loan Document or any statement or certificate at any time
given in writing pursuant hereto or in connection herewith, which
representations or warranties relate solely to a particular Lease, shall be
false or misleading in any material respect when made, then Borrower shall
submit a new Borrowing Base Certificate to Agent within five (5) Business Days
of such discovery.
(e) COLLATERAL REPORT. A "Collateral Report" detailing
lease portfolio statistics (a) as of the end of each month, within fifteen (15)
days of the end of such month, for Leases financed hereunder, consisting of (i)
a listing of lessees by credit exposure by original funded dollar volume, lease
term and credit rating, (ii) the top five vendors of equipment subject to
financed Leases and the aggregate credit exposure by dollar volume of equipment
financed, (iii) bookings by equipment vendor by dollar volume of equipment
financed and (iv) a
39
receivables aging report on such Leases, (b) as of the end of each fiscal
quarter, rolling four quarter default statistics, and (c) as of the end of each
fiscal year, as soon as available, but in any event within ninety (90) days of
the end of such fiscal year, for the entire portfolio of Borrower, consisting of
(i) average equity contribution, (ii) realized residual/cash equity, (iii)
realized residual/book equity and (iv) lease charge-offs.
(f) OTHER FINANCIAL REPORTS.
(i) Copies of the management letters submitted by
certified independent accountants to Borrower in connection with any audit or
examination of Borrower, annual, interim or otherwise, all promptly upon receipt
in final form by Borrower.
(ii) As soon as available and in no event later
than fifteen (15) days after the same shall have been filed with the Securities
and Exchange Commission, a copy of each Form 8-K Current Report, Form 10-K
Annual Report, Form 10-Q Quarterly Report, Annual Report to Shareholders, and,
when distributed to Borrower's shareholders, each Proxy Statement and
Registration Statement of Borrower.
(g) OTHER DATA. Notices of any "prohibited transaction"
or "reportable event" (as such terms are defined in Section 4043 of ERISA) with
respect to any Employee Plan of Borrower that might constitute grounds for a
termination of such Employee Plan under Title IV of ERISA, and such other
information relating to the business, properties, condition, operations and
financial and other affairs of Borrower as Lenders or Agent may reasonably
request from time to time.
(h) CREDIT POLICY MANUAL. Borrower shall provide Agent
with a copy of Borrower's credit policy manual as in effect from time to time
and shall promptly provide Agent with any updates to the credit policy manual.
5.2 CORPORATE RIGHTS; FACILITIES; CONDUCT OF BUSINESS.
(i) Maintain and preserve in full force and effect its
corporate existence and all rights, licenses, leases, qualifications,
privileges, franchises and other authority (collectively, "Rights") adequate for
the conduct of its business, except where the lapsing of any such Right would
not have a Material Adverse Effect;
(ii) Maintain, preserve and protect its properties, assets,
equipment and facilities in working order and good repair and condition (taking
into consideration ordinary wear and tear) and from time to time make, or cause
to be made, all needful and proper repairs, renewals and replacements thereto,
except where the failure to do so would not have a Material Adverse Effect;
40
(iii) Maintain, preserve and protect all of its rights to
enjoy and use trademarks, trade names, service marks, patents, copyrights,
licenses, leases, franchise agreements and franchise registrations where the
failure to do so would have a Material Adverse Effect; and
(iv) Conduct its business in an orderly manner without
voluntary interruption.
5.3 INSURANCE. Maintain with financially sound and reputable
companies, such insurance in such amounts and subject to such deductibles and
other terms as is usual in the business conducted by Borrower, covering, without
limitation, fire, theft, public liability, property damage, product liability,
worker's compensation and extended coverage insurance covering Borrower's
properties and assets.
5.4 TAXES AND OTHER LIABILITIES. Promptly pay and discharge all
taxes, assessments, levies and other liabilities payable by Borrower when due
and payable except such as may be (a) paid thereafter without penalty or (b)
contested in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with GAAP. Borrower
shall promptly notify Lenders of any material challenge, contest or proceeding
pending by or against Borrower before any taxing authority.
5.5 CERTAIN NOTICES. Give prompt written notice to Lenders of (a)
the occurrence of any Event of Default or Potential Event of Default, (b) the
occurrence of a material adverse change in Borrower's business, operations or
financial condition or in any of those matters reflected in the reports and
records supplied to Lenders under Section 5.1, (c) the pendency or institution
of, or any adverse determination in, any litigation, arbitration proceeding or
governmental proceeding or investigation which would have a Material Adverse
Effect, and (d) institution of any proceeding to attach or otherwise levy
against any of the Collateral.
5.6 INSPECTION RIGHTS. After the occurrence of an Event of
Default, at any reasonable time and from time to time during normal business
hours, permit Agent or any Lender or any agent, representative or employee of
any of them, to examine and make copies of and abstracts from the financial
records and books of account of, and visit the properties of, Borrower.
5.7 CONVERSATIONS WITH MANAGEMENT. At any reasonable time upon
reasonable notice and from time to time during normal business hours, permit
Agent or any Lender or any agent, representative or employee thereof, to discuss
the affairs, finances and accounts of Borrower with any officer of any of them
to the extent any of the foregoing may be relevant to Borrower's obligations
under the Loan Documents.
5.8 PERIODIC AUDITS. At any reasonable time upon reasonable notice
and from time to time during normal business hours, permit Lenders, or any
agent, representative or employee thereof, to conduct periodic audits at
Lenders' expense of the Collateral and documentation
41
relating thereto, including, without limitation, all records of payments
received on account of the Collateral; provided, however, that notwithstanding
the foregoing, Borrower shall at any reasonable time upon reasonable notice and
during normal business hours, permit Agent, or any agent, representative or
employee thereof, to conduct up to two (2) audits within any twelve (12) month
period at Borrower's expense, not to exceed $5,500.00 per audit, of the
Collateral and documentation relating thereto, including, without limitation,
all records of payments received on account of the Collateral.
5.9 USE OF PROCEEDS. Use the proceeds of the Loans under the
Facility only for (a) (i) refinancing the amounts owing to Lenders and Agent
under the Existing Agreement; (ii) to the extent not previously paid, paying the
purchase price of Equipment leased by Borrower pursuant to Eligible Leases which
are Collateral for Loans; (iii) refinancing a Previously Financed Lease to the
extent permitted under paragraph (c) of the definition of Eligible Lease; (iv)
to the extent not previously paid, paying the purchase price for Eligible Leases
and the Equipment thereunder purchased from brokers, which Eligible Leases and
Equipment are Collateral for Loans; and (v) to the extent not previously paid,
paying the purchase price for Eligible Software Leases, which Eligible Software
Leases are Collateral for Loans; and (b) then for general corporate purposes.
5.10 COMPLIANCE WITH LAWS. Exercise all due diligence in order to
comply with the requirements of all applicable laws, rules, regulations, orders,
writs, judgments, decrees, determinations and awards of any Governmental Agency,
non-compliance with which would have a Material Adverse Effect; provided,
however, that Borrower may contest any act, regulation, order, decree or
direction in any reasonable manner which shall not, in the opinion of Requisite
Lenders, adversely affect Lenders' rights hereunder or adversely affect the
priority of Lenders' Liens in and on the Collateral.
5.11 PUNCTUAL PAYMENT. Duly and punctually pay or cause to be paid
the Obligations, including, without limitation, the principal outstanding and
interest accrued on the Note, the Swingline Note and all other amounts from time
to time owing hereunder, all in accordance with the terms of this Agreement, the
Note and the Swingline Note.
5.12 DESIGNATED DEPOSIT ACCOUNT. Borrower shall establish and
maintain with FNBB a demand deposit account, and shall deposit into such
Designated Deposit Account funds sufficient to make all payments due hereunder.
5.13 IMPOSITION OF MORE RESTRICTIVE COVENANTS. In the event that
Borrower enters into any agreement evidencing a substantially similar recourse
facility to that provided by this Agreement, including, without limitation, any
recourse loan agreement secured by a first priority security interest in
equipment or leases of Borrower, which agreement contains financial covenants
more restrictive on Borrower thereunder than are contained in SECTION 7 of this
Agreement the breach whereof would be a default permitting acceleration of such
Indebtedness, such covenants shall be deemed included in this Agreement so long
as such financial covenants are included in the other agreement and such
agreement remains in effect and Borrower shall
42
promptly notify Agent and Lenders of the same and shall execute such amendments
or other agreements with Agent and Lenders as Agent or Requisite Lenders shall
reasonably deem necessary to evidence such inclusion. For the purposes of this
Section 5.13, "financial covenants" shall mean any ratios or measurements
derived from information contained on Borrower's balance sheet, income statement
or cash flow statement.
5.14 AGREEMENTS. Borrower shall perform, within all required time
periods (after giving effect to any applicable grace periods), all of its
obligations and enforce all of its rights under each agreement to which it is a
party, including any leases to which it is a party, where the failure to so
perform and enforce would have a Material Adverse Effect. Borrower shall not
terminate or modify any provision of any agreement to which it is a party if
such termination or modification could have a Material Adverse Effect. If
Borrower obtains notice or knowledge of the occurrence of any Lease Default, or
any event which, with the passage of time or the giving of notice or both, would
become a Lease Default, Borrower will notify Agent immediately of such event,
and, upon request of Requisite Lenders, Borrower will enforce all of its rights
as lessor under the Lease as it deems reasonably necessary in the circumstances.
5.15 LOCATION OF COLLATERAL. Borrower shall maintain the lessor's
original of each Lease at its office at 00 Xxxxxxx Xxxx., Xxxxx 0000, Xxx Xxxx,
Xxxxxxxxxx, or such other location as Requisite Lenders shall approve in
writing. Borrower shall xxxx any duplicate original of a Lease provided to a
lessee after the date hereof as "duplicate," "lessee's original," or in a
similar fashion to distinguish it from the lessor's original.
5.16 NOTICES TO AND CONSENTS FROM LESSEES. Promptly after each
Funding Date, Borrower shall:
(i) send a notice by certified mail, return receipt requested, to
the lessee under any Lease which requires that notice of
assignment be given to such lessee; and
(ii) send a request by certified mail, return receipt requested, for
the written consent of the lessee under any Lease which
requires that consent to assignment of such Lease be obtained
from such lessee, other than a lease under which the lessee is
the State of California; and
(iii) comply with any notice requirements and obtain any required
consents under any vendor program agreement entered into in
connection with any Eligible Lease which is Collateral for
Loans, in connection with the grant to Agent, on behalf of
Lenders, of a security interest in Borrower's rights under such
vendor program agreement.
5.17 COPIES OF LEASES. Upon Agent's request, Borrower shall deliver
to Agent a copy of each Lease which is included in the Borrowing Base
calculation (including, in the case of a master lease agreement, a copy of the
particular equipment schedule or supplement being
43
financed and a copy of the related master lease agreement unless previously
delivered to Agent), certified as a true and complete copy of the original by a
Responsible Officer.
5.18 POST-CLOSING DOCUMENTS. Borrower shall deliver to Agent an
updated UCC search of the records of the California Secretary of State with
copies of financing statements, dated of as a date not more than fifteen days
prior to the date of this Agreement, within thirty (30) days after the date of
this Agreement, in form and substance satisfactory to Requisite Lenders.
6. BORROWER'S NEGATIVE COVENANTS.
From the date of execution of this Agreement and so long as funds
hereunder shall be available and until payment in full of the Loans, unless
Requisite Lenders shall otherwise consent in writing, Borrower covenants and
agrees as follows:
6.1 LIENS AND ENCUMBRANCES. Without the prior written approval of
Requisite Lenders, Borrower shall not create, assume or permit to exist any Lien
on any of the Collateral, except (collectively, the "Permitted Liens"):
(1) Liens granted to Agent and Lenders on and in
the Collateral;
(2) Liens for taxes, assessments or levies if
payment shall not at the time be required to be made in accordance with SECTION
5.4 and for which proper reserves are established; and
(3) Liens for mechanics', laborers' and
materialmen's and similar Liens not then delinquent and for which proper
reserves are established.
6.2 EMPLOYEE LOANS. Borrower shall not make or accrue any loans or
other advances of money to any officer or employee of Borrower during the term
of the Facility, other than (a) reimbursable advances incurred in the ordinary
course of Borrower's business, (b) promissory notes issued upon the exercise of
stock options, and (c) loans not to exceed $1,000,000 in the aggregate amount at
any time outstanding to such officers or employees.
6.3 DIVIDENDS. Borrower may declare but shall not make, pay or set
apart any funds for the payment of any dividends or any other distribution with
respect to its Stock, make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, retirement or
other acquisition of its Stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Borrower, except:
(i) dividends payable solely in shares of
Borrower's capital Stock; and
44
(ii) dividends payable in cash and/or property other
than shares of Borrower's capital Stock to the extent that such dividends do not
exceed, in the aggregate, twenty-five (25%) of Borrower's net income in that
fiscal year.
6.4 RESTRICTION ON FUNDAMENTAL CHANGES. Borrower shall not enter
into any transaction of merger or consolidation, directly or indirectly, whether
by operation of law or otherwise, if Borrower shall not be the continuing or
surviving corporation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or substantially
all of its business, property or assets, whether now owned or hereafter
acquired; provided, however, that notwithstanding the foregoing (a) Borrower may
reincorporate in Delaware, provided that (i) no Default has occurred and is
continuing or would occur, with the lapse of time or the giving of notice or
both, immediately after giving effect to such reincorporation, (ii) Borrower
gives Agent at least thirty (30) days' prior written notice of such
reincorporation, (iii) such reincorporation does not adversely affect the rights
of Lenders under this Agreement, (iv) all of Borrower's assets are transferred
to the surviving corporation (the "Survivor") in such reincorporation, (v) the
Survivor assumes all of Borrower's obligations under this Agreement and the
other Loan Documents pursuant to an agreement in form and substance reasonably
satisfactory to Agent, and (vi) the Survivor executes any financing statements
or amendments thereto reasonably requested by Agent to perfect Agent's security
interest, on behalf of Lenders and (b) Borrower may create new wholly-owned
Subsidiaries and sell, assign or otherwise transfer equipment and leases to such
Subsidiaries in connection with securitization transactions, provided, that
Borrower shall not sell, assign or otherwise transfer any Equipment or Leases
which are Collateral if the effect of such sale, assignment or transfer would be
to create an Overadvance.
6.5 TRANSACTIONS WITH AFFILIATES. Borrower shall not enter into or
be a party to any agreements or transactions with any Affiliate of Borrower
having a value in excess of $1,000,000 in the aggregate except (a) as otherwise
permitted hereunder, (b) with respect to the raising of new equity for Borrower;
provided, however, that any indebtedness incurred in connection therewith be
subordinated to the Obligations of Borrower to Lenders on terms and conditions
reasonably satisfactory to Requisite Lenders, (c) for securitization
transactions as contemplated by SECTION 6.4, (d) with respect to an Affiliate
other than a subsidiary, in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms that are approved by Borrower's board of directors, or (e) with respect to
a Subsidiary, pursuant to the reasonable requirements of Borrower's business and
upon fair and reasonable terms that are approved by Borrower's board of
directors.
6.6 MAINTENANCE OF BUSINESS. Borrower shall not engage in any
business materially different than the business of providing equipment lease
financing and services to manufacturers and users of equipment, including,
without limitation, asset management services relating to leases.
6.7 ERISA.
45
(i) Except as set forth on Schedule 6.7, neither Borrower
nor any Affiliate shall incur any obligation to contribute to an employee
pension benefit plan as defined in Section 3(2) of ERISA or subject to the
minimum funding standards under Section 412 of the Code (a "Plan"), including a
Plan required by a collective bargaining agreement or as a consequence of the
acquisition of an Affiliate, unless (i) Borrower or the Affiliate shall notify
Lenders in writing that it intends to incur such obligation and (ii) after
Lenders' receipt of such notice, Requisite Lenders consent to the establishment,
maintenance, or Borrower's incurring an obligation to contribute to, the Plan,
which consent may not be unreasonably withheld or unreasonably delayed, but may
be subject to such reasonable conditions as Requisite Lenders may require.
(ii) If Borrower or any Affiliate incurs any obligation to
contribute to any Plan, then Borrower shall not (i) terminate, or permit any
Affiliate to terminate, any Plan so as to result in any liability which will
have a Material Adverse Effect on Borrower or an Affiliate or (ii) make or
permit any 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 which will have a Material Adverse Effect on Borrower or any
Affiliate.
6.8 NO USE OF LENDERS' NAME. Borrower 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.
6.9 FISCAL YEAR. Borrower shall not change its fiscal year end
from December 31 of each year unless required to do so by law or Requisite
Lenders consent to such change.
7. FINANCIAL COVENANTS OF BORROWER.
Borrower covenants and agrees that, so long as the Commitment hereunder
shall be available, and until payment in full of the Note and the Swingline
Note, unless Requisite Lenders shall otherwise consent in writing, Borrower
shall perform all of the following financial covenants. In connection with
performance of Borrower's obligations under this Section 7, Borrower agrees and
understands that all covenants under this Section 7 shall be measured on the
last day of each fiscal quarter of Borrower, and in each case upon review by
Lenders of the respective quarter's consolidated financial statements.
7.1 MINIMUM INTEREST COVERAGE RATIO. Maintain from and after the
date hereof an Interest Coverage Ratio in excess of 1.20 to 1.
7.2 MINIMUM TANGIBLE NET WORTH. Maintain from and after the date
hereof a minimum Tangible Net Worth equal to or greater than the sum of (a)
$45,154,000, plus (b) seventy-five percent (75%) of Net Income (without regard
to net losses) after June 30, 1996, plus (c) seventy-five percent (75%) of New
Equity issued after June 30, 1996.
46
7.3 MAXIMUM RECOURSE DEBT RATIO. Maintain from and after the date
hereof a Recourse Debt Ratio not to exceed 4.5 to 1.
7.4 PROFITABILITY
(i) Borrower shall not have an operating loss and/or incur
negative Net Income on a consolidated basis in any two consecutive fiscal
quarters;
(ii) Borrower shall not have an operating loss and/or incur
negative Net Income on a consolidated basis greater than $500,000 in any fiscal
quarter; and
(iii) Borrower shall not have an operating loss and/or incur
negative Net Income on a consolidated basis, in any amount, in any fiscal year.
8. EVENTS OF DEFAULT AND REMEDIES.
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute an Event of Default:
(a) Failure to pay any installment of principal under this
Agreement, the Note, or the Swingline Note on the date such installment shall
become due and payable; or
(b) Failure to pay any installment of interest on the
Loans or any of the other Obligations of Borrower to Lenders, Swingline Lender
or Agent arising under this Agreement, the Note, the Swingline Note 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
within five (5) calendar days; or
(c) Borrower defaults on the payment of any principal of
or any interest on any recourse Funded Debt or Funded Debt under which the
lender acquires recourse for any reason, or breaches any term of any evidence of
such recourse Funded Debt or of any loan agreement, mortgage, indenture or other
agreement relating thereto if (i) the amount of such Funded Debt exceeds
$1,000,000 in principal amount, and (ii) the effect of such breach is to permit
acceleration under the applicable instrument or agreement, and such breach is
neither waived by the note holder or obligee nor cured, in each case within five
(5) calendar days of the date of such breach, or there is an acceleration under
the applicable instrument; or
(d) Subject to SECTION 8.1(c), Borrower defaults on the
payment of any principal of or any interest on any recourse Indebtedness or
Indebtedness under which the lender acquires recourse for any reason, or
breaches any term of any evidence of such recourse Indebtedness or of any loan
agreement, mortgage, indenture or other agreement relating thereto if (i) the
amount of such Indebtedness exceeds $5,000,000 in principal amount, and (ii)
there is an acceleration under the applicable instrument; or
47
(e) Borrower fails or neglects to perform, keep or observe
any of the financial covenants contained in Section 7 of this Agreement; or
(f) Subject to SECTIONS 8.1(a), (b), (c), (d) and (e),
Borrower 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 Borrower in connection therewith and the same has not been
cured to Requisite Lenders' satisfaction within ten (10) calendar days after
Borrower shall become aware thereof, whether by written notice from Agent or
Requisite Lenders or otherwise; or
(g) Any of Borrower's representations or warranties made
in any Loan Document or any statement or certificate at any time given in
writing pursuant hereto or in connection herewith, other than representations or
warranties that relate solely to a particular Lease, shall be false or
misleading in any material respect when made; or
(h) Borrower shall become insolvent; or
(i) Borrower or any Subsidiary of Borrower shall admit in
writing its inability to pay its debts as they mature; or make an assignment for
the benefit of creditors; or apply for or consent to the appointment of a
receiver, liquidator, custodian or trustee for it or for a substantial part of
its property 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
(j) 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 Borrower or any
Subsidiary of Borrower, or any order, judgment or decree shall be entered
against Borrower or any Subsidiary of Borrower 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
(k) There shall have been a change in the assets,
liabilities, financial condition, operations, or business of Borrower, other
than changes in the ordinary course of business, which in the reasonable
determination of Requisite Lenders has, either individually or in the aggregate,
had a Material Adverse Effect; or
(l) There shall be a money judgment, writ or warrant of
attachment or similar process entered or filed against Borrower which is not
fully covered by insurance in accordance with Section 5.3 or 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 judgments or attachments against Borrower exceeds in the aggregate
$1,000,000.
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8.2 REMEDIES.
(a) EXERCISE OF REMEDIES. Upon the occurrence and
continuance of an Event of Default, Agent and Requisite Lenders may at the
option of Requisite Lenders do any one or more of the following, all of which
are authorized by Borrower:
(i) Declare the Commitment of each Lender, and
the Swingline Commitment of Swingline Lender, to make Loans to be terminated,
whereupon such Commitments and Swingline Commitment shall forthwith be
terminated;
(ii) Declare all or any of the Obligations of the
Borrower under this Agreement, the Note, the Swingline Note, the other Loan
Documents and any other instrument executed by Borrower pursuant to such 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
and Requisite Lenders may exercise from time to time any and all rights and
remedies available to them under applicable law, provided that if such Event of
Default is under part (h), (i) or (j) of Section 8.1, then the Note and the
Swingline Note shall become immediately due and payable forthwith without the
requirement of any notice or other action by Lenders.
(iii) Without notice to or demand upon Borrower,
make such payments and do such acts as Requisite Lenders consider necessary or
commercially reasonable to protect their security interest in the Collateral;
(iv) Terminate this Agreement as to any future
liability or obligation of Requisite Lenders', but without affecting their
rights and security interest in the Collateral;
(v) Exercise all of Agent's and Lenders' rights
under the Security Agreement; and
(vi) 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.
(b) DEFICIENCY. Borrower shall remain liable for, and pay
immediately, any deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay all of the Obligations, Borrower also
being liable for the reasonable fees and expenses of any attorneys employed by
Lenders and Swingline Lender to collect such deficiency; and
(c) SET-OFF. In addition to any rights and remedies of
the Lenders and Swingline Lender provided by law, if an Event of Default exists,
each Lender and Swingline Lender is authorized at any time and from time to
time, without prior notice to Borrower, any
49
such notice being waived by Borrower to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing from, such Lender to or for the credit or the account of Borrower against
any and all Obligations owing to such Lender or Swingline Lender, then existing,
irrespective of whether or not Agent, Swingline Lender or such Lender shall have
made demand under this Agreement or any Loan Document. Each Lender and Swingline
Lender agrees promptly to notify Borrower and Agent after any such set-off and
application made by such Lender or Swingline Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and Swingline Lender under this Section
8.2(c) are in addition to the other rights and remedies (including other rights
of set-off) which Lender or Swingline Lender may have.
(d) RIGHTS AND REMEDIES CUMULATIVE. Lenders' and
Swingline Lender's rights and remedies under this Agreement shall be cumulative.
Lenders and Swingline Lender shall have all other rights and remedies not
inconsistent herewith as provided by law or in equity. No exercise by Lenders or
Swingline Lender of one right or remedy shall be deemed an election. No delay by
Lenders, Swingline Lender or Agent shall constitute a waiver, election or
acquiescence by such party.
9. AGENT.
9.1 APPOINTMENT. Each Lender and Swingline Lender hereby appoints
FNBB as Agent hereunder and under the other Loan Documents and each Lender and
Swingline Lender hereby irrevocably authorizes Agent to act hereunder and
thereunder as Agent of such Lender and Swingline Lender. Agent agrees to act as
such upon the express conditions contained in this SECTION 9. In performing its
functions and duties under this Agreement and under the other Loan Documents,
Agent shall act solely as Agent of Lenders and Swingline Lender and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Borrower.
9.2 POWERS; GENERAL IMMUNITY, ETC. Each Lender and Swingline
Lender irrevocably authorizes Agent to take such action on such Lender's and
Swingline Lender's behalf and to exercise such powers hereunder as are
specifically delegated to Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. Agent shall have only those duties which
are specified in this Agreement and it may perform such duties by or through its
agents, representatives or employees. In performing its duties hereunder on
behalf of Lenders and Swingline Lender, Agent shall exercise the same care which
it would exercise in dealing with loans made for its own account, but it shall
not be responsible to any Lender or Swingline Lender for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of all or any of the Loan Documents, or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents furnished or delivered in connection
herewith or therewith by Agent to any Lender or Swingline Lender or by or on
behalf of Borrower to Agent, Swingline Lender or any Lender, or be required to
ascertain
50
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans. Agent shall not be responsible for insuring the
Collateral or for the payment of any taxes, assessments, charges or any Liens of
any nature whatsoever upon the Collateral or otherwise for the maintenance of
the Collateral. Unless the officers of Agent acting in their capacity as
officers of Agent on Borrower's account have actual knowledge thereof or have
been notified in writing thereof by Lenders or Swingline Lender, Agent shall not
be required to ascertain or inquire as to the existence or possible existence of
any Event of Default or Potential Event of Default. Neither Agent nor any of its
officers, directors, employees, representatives or agents shall be liable to
Lenders or Swingline Lender for any action taken or omitted hereunder or under
any of the other Loan Document or in connection herewith or therewith unless
caused by its or their gross negligence or willful misconduct. No provision of
this Agreement or of any other Loan Document shall be deemed to impose any duty
or obligation on Agent to perform any act or to exercise any power in any
jurisdiction in which it shall be illegal, or shall be deemed to impose any duty
or obligation on Agent to perform any act or exercise any right or power if such
performance or exercise (a) would subject Agent to a tax in a jurisdiction where
it is not then subject to a tax or (b) would require Agent to qualify to do
business in any jurisdiction where it presently is not so qualified. Without
prejudice to the generality of the foregoing, no Lender or Swingline Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or (where so instructed) refraining from acting under this Agreement or
under any of the other Loan Documents in accordance with the instructions of
Requisite Lenders. Agent shall be entitled to refrain from exercising any power,
discretion or authority vested in it under this Agreement unless and until it
has obtained the written instructions of the Requisite Lenders. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon Agent in its individual capacity.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
INSPECTION. Each Lender and Swingline Lender represents and warrants that it has
made its own independent investigation of the financial condition and affairs of
Borrower in connection with the making of the Loans hereunder and has made and
shall continue to make its own appraisal of the creditworthiness of Borrower.
Agent shall have no duty or responsibility either initially or on a continuing
basis to make any such investigation or any such appraisal on behalf of Lenders
or Swingline Lender or to provide any Lender or Swingline Lender with any credit
or other information (other than information obtained under the provisions of
this Agreement which Agent shall make available to each Lender and Swingline
Lender upon request by such Lender or Swingline Lender) with respect thereto
whether coming into its possession before the Closing Date or any time or times
thereafter and shall further have no responsibility with respect to the accuracy
of or the completeness of the information provided to Lenders or Swingline
Lender. With respect to its participation in the Loans hereunder, Agent shall
have the same rights and powers hereunder as any other Lender or Swingline
Lender and may exercise the same rights and powers as though it were not
performing the duties and functions delegated to it hereunder and the term
"Lender," "Swingline Lender" or "Lenders" or any similar term shall unless the
context clearly indicates otherwise include Agent in its individual capacity.
Agent and each of its
51
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with Borrower as if it were not Agent.
9.4 RELIANCE BY AGENT.
(i) Agent may consult with counsel, and any opinion or
legal advice of such counsel who are not employees of Agent or Borrower or any
Affiliate of Borrower shall be full and complete authorization and protection
from and with respect to Lenders and Swingline Lender in respect of any action
taken or suffered by Agent hereunder or under any other Loan Documents in
accordance therewith. Agent shall have the right at any time to seek
instructions concerning the administration of the Collateral from any court of
competent jurisdiction.
(ii) Agent may rely, and shall be fully protected in
acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document that it
has no reason to believe to be other than genuine and to have been signed or
presented by the proper party or parties or, in the case of cables, telecopies
and telexes, to have been sent by the proper party or parties. In the absence of
its gross negligence or willful misconduct, Agent may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to Agent and conforming to
the requirements of this Agreement or any of the other Loan Documents.
(iii) Agent shall not be under any obligation to exercise
any of the rights or powers granted to Agent by this Agreement and the other
Loan Documents at the request or direction of Lenders or Swingline Lender unless
Agent shall have been provided by Lenders or Swingline Lender, as the case may
be, adequate security and indemnity against the costs, expenses and liabilities
that may be incurred by it in compliance with such request or direction.
9.5 DELEGATION OF DUTIES. Agent may execute any of the powers
hereof and perform any duty hereunder either directly or by or through agents or
attorneys-in-fact. Agent shall be entitled to advice of counsel concerning all
matters pertaining to such powers and duties. Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by it
without gross negligence or willful misconduct on the part of Agent.
9.6 RIGHT TO INDEMNITY. Each of Lenders severally, but not
jointly, agrees (a) to indemnify and hold Agent (and any Person acting on behalf
of Agent) harmless from and against and (b) promptly on receipt by each Lender
of Agent's statement, to reimburse Agent, according to such Lender's Commitment
Percentage of the Commitments, to the extent Agent shall not otherwise have been
reimbursed by Borrower on account of and for, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, the fees and disbursements of counsel
and other advisors) or disbursements of any kind of nature whatsoever with
respect to Agent's performance of its duties under this Agreement and the other
Loan Documents (collectively, "Losses"), including, without limitation, any
Losses arising under SECTIONS 2.9 or 2.10, except to the extent that such Losses
are caused
52
by Agent's gross negligence or willful misconduct. Such reimbursement shall not
in any respect release Borrower from any liability or obligation. If any
indemnity furnished to Agent for any purpose shall, in the opinion of Agent, be
insufficient or become impaired, Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
9.7 MONEYS TO BE HELD. All moneys received by Agent under or
pursuant to any provision of this Agreement or any other Loan Document (except
Agent's Reimbursement) shall be held for the purposes for which they were paid
or are held and shall be distributed in accordance with this Agreement for the
benefit of Agent, Swingline Lender and Lenders as their respective interests may
appear.
9.8 AGENT'S REIMBURSEMENT. Borrower agrees to pay to Agent, within
thirty days of the date of an invoice submitted therefor to Borrower, the
Agent's Reimbursement. Any demand for payment of Agent's Reimbursement submitted
to Borrower by or on behalf of Agent shall be accompanied by such invoices or
other documentation evidencing the expenses incurred for which payment is
demanded as are available to Agent. All unpaid amounts owing by Borrower in
respect of the Agent's Reimbursement shall be added to the Obligations and shall
be secured by, and entitled to the rights and benefits in respect of, the Loan
Documents. The obligations of Borrower under this Section 9.8 shall survive the
termination of the other provisions of this Agreement and shall survive the
commencement of a case under Title 11 of the United States Code on behalf of or
against Borrower as debtor, or any other proceeding for the reorganization,
arrangement, adjustment of debt, dissolution or liquidation on behalf of or
against Borrower as debtor.
9.9 RESIGNATION OR REMOVAL OF AGENT AND APPOINTMENT OF SUCCESSOR
AGENT. Agent (a) may resign at any time by giving thirty (30) days' prior
written notice thereof to Lenders and Borrower or (b) shall resign upon thirty
(30) days' prior written notice, requesting resignation, from Borrower and
Requisite Lenders; 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 Lender
on the Closing Date, such appointment shall be subject to the consent of
Borrower, which consent shall not be unreasonably withheld, and Lenders. 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 any of its future 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.
9.10 CONFLICTS. FNBB and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, act as merchant banker in any
transaction for, and generally engage in any kind of business with, Borrower and
any Person who may do business with or own securities of Borrower, all as if
FNBB were not Agent and without any duty to account
53
therefor to Lenders or to disclose to Lenders confidential information which
FNBB may receive from Borrower in connection with such other activity or
business.
9.11 COMMUNICATIONS. Agent will promptly notify each Lender of any
Event of Default or Potential Event of Default of which it becomes aware. Agent
will promptly upon receipt thereof furnish copies to each Lender of all
financial statements and other documents provided to Agent by Borrower pursuant
to Section 5.1. Lenders agree that written communications from Agent to Borrower
on behalf of Lenders shall be binding on Lenders.
9.12 NO OBLIGATIONS OF BORROWER. Nothing contained in this Section
9 shall be deemed to impose upon Borrower any obligation in respect of the due
and punctual performance by Agent of its obligations to Lenders or Swingline
Lender under any provision of this Agreement, and Borrower shall have no
liability to Agent, Swingline Lender or any Lender in respect of any failure by
Agent, Swingline Lender or any Lender to perform any of their respective
obligations to each other under this Agreement. Without limiting the generality
of the foregoing sentence, where any provision of this Agreement relating to the
payment of any amounts due and owing under the Loan Documents provides that such
payments shall be made by Borrower to Agent for the account of Lenders,
Borrower's obligations to Lenders in respect of such payments shall be deemed to
be satisfied upon the making of such payments to Agent in the manner provided by
this Agreement.
10. EXPENSES AND INDEMNITIES.
10.1 EXPENSES. Borrower agrees to pay within thirty days of the
date of an invoice submitted to Borrower (a) all actual and reasonable costs and
expenses (including, without limitation, all reasonable attorneys' fees and
allocated expenses of Agent's in-house legal staff or outside counsel) of
preparation of the Loan Documents and all amendments, modifications and
substitutions thereto, all costs of furnishing all opinions of counsel for
Borrower (including, without limitation, any opinions requested by Agent or
Requisite Lenders as to any legal matters arising hereunder) and of Borrower's
performance of and compliance with all agreements and conditions contained
herein on its part to be performed or complied with; (b) all other actual and
reasonable out-of-pocket expenses (including, without limitation, all reasonable
attorneys' fees and allocated expenses of the Person to be reimbursed's in-house
legal staff or outside counsel) incurred by (i) Agent in connection with the
negotiation, preparation, execution and enforcement of the Loan Documents and
(ii) if an Event of Default has occurred and is continuing, Lenders in
connection with the enforcement of the Loan Documents; and (c) regardless of the
existence of an Event of Default, all legal, appraisal, audit, accounting,
consulting or other fees, costs or expenses incurred in connection with any
litigation, contest, dispute, suit, proceeding or action in which (i) Borrower
is a party and (ii) any Lender or Agent shall be the prevailing party (whether
instituted by Lenders, Agent, Borrower or any other Person) in any way relating
to the Loan Documents, or any other agreement to be executed or delivered in
connection herewith. Borrower shall be liable for all fees, costs and expenses
listed in this Section 10.1 whether or not the transactions contemplated by this
Agreement are completed, unless the failure to complete
54
such transactions is due solely to Lenders' or Agent's failure to comply with
the terms and conditions of this Agreement.
10.2 TAXES, ETC. Borrower agrees to pay all governmental
assessments, charges or taxes (except income, gross receipts, ad valorem,
intangibles, franchise or other similar taxes imposed on Agent or any Lender),
including any interest or penalties thereon, at any time payable or ruled to be
payable in respect of the existence, execution or delivery of the Loan Documents
or the issuance of the Note or the Swingline Note by reason of any existing or
hereafter enacted federal, state or local statute, and to indemnify and hold
each Lender, Swingline Lender and Agent and each and every other holder of any
Note or Swingline Note harmless against liability in connection with any such
assessments, charges or taxes. This obligation on the part of Borrower shall
survive the payment and performance of the Obligations and the termination of
this Agreement.
10.3 INDEMNIFICATION. To the fullest extent permitted by law,
Borrower agrees to protect, indemnify, defend and hold harmless Agent, Swingline
Lender, each Lender and each of their respective Affiliates, directors,
officers, employees, agents and any person who controls any of them within the
meaning of the Federal and State securities laws ("Indemnitees") from and
against any liabilities, losses, damages or expenses of any kind or nature and
from any suits, claims or demands (including, without limitation, in respect of
or for reasonable attorney's fees and other expenses) arising on account of or
in connection with any matter or thing or action or failure to act by
Indemnitees, or any of them, arising out of or relating to the Loan Documents or
any agreement or instrument contemplated by the Loan Documents, except to the
extent such liability arises from the willful misconduct or gross negligence of
any of the Indemnitees. Upon receiving knowledge of any suit, claim or demand
asserted by a third party that Lenders or Agent believes is covered by this
indemnity, Lenders or Agent shall give Borrower notice of the matter and an
opportunity to defend it, at Borrower's sole cost and expense, with legal
counsel reasonably satisfactory to Lenders. Lenders may also require Borrower to
defend the matter. This obligation on the part of Borrower shall survive the
payment and performance of the Obligations and the termination of this
Agreement.
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, Swingline Lender or any Lender in the exercise of any power, right or
privilege hereunder, under the Note, under the Swingline Note, or under 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.
55
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, telecopy, computer transmission or by United States mail, registered or
certified, return receipt requested, postage prepaid 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 personally delivered, with receipt acknowledged, or five
(5) Business Days after the same shall have been deposited in the United States
mail. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
below (other than the parties hereto) to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
11.4 SEVERABILITY. In case any provision or obligation under the
Loan Documents shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
11.5 CONSTRUCTION. This Agreement is the result of negotiations
between and has been reviewed by each of Borrower, Swingline Lender, Lenders and
Agent and their respective counsel; accordingly, this Agreement shall be deemed
to be the product of each party hereto, and no ambiguity shall be construed in
favor of or against either Borrower, Swingline Lender, Lenders or Agent.
11.6 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.
(a) This Agreement, the other Loan Documents and any
other agreement submitted in connection herewith, each dated as of the date
hereof, taken together, constitute and contain the entire agreement of Borrower,
Swingline Lender, 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.
Borrower, Swingline Lender, 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 either Borrower's, Swingline
Lender's, Lenders' or Agent's actual intentions.
(b) No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Requisite Lenders and Borrower, and then such waiver
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all Lenders, Swingline Lender, Borrower
and acknowledged by Agent, do any of the following:
56
(A) increase or extend the Commitment of any
Lender or Swingline Lender (or reinstate any Commitment terminated pursuant to
Section 8.2(a)(i)) or subject any Lender or Swingline Lender to any additional
monetary obligations;
(B) postpone or delay any date fixed for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) or Swingline Lender hereunder or under any Loan Document;
(C) reduce the principal of, or the rate of
interest specified herein on any Loan, or of any fees or other amounts payable
hereunder or under any Loan Document;
(D) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans which shall be required
for Lenders or any of them to take any action hereunder, except as specifically
contemplated by Section 2.9;
(E) amend this Section 11.6 or Section 2.13
(sharing of payments); or
(F) release any material portion of the
Collateral except as otherwise may be provided in the Security Agreement or
except where the consent of the Requisite Lenders only is specifically provided
for;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by Agent in addition to the Requisite Lenders or all Lenders
and Swingline Lender, as the case may be, affect the rights or duties of Agent
under this Agreement or any other Loan Document and (ii) no amendment, waiver or
consent shall, unless in writing and signed by Swingline Lender in addition to
the Requisite Lenders or all Lenders and Agent, as the case may be, affect the
rights or duties of Swingline Lender (in its capacity as Swingline Lender) under
this Agreement or any other Loan Documents. No notice to or demand on Borrower
in any case shall entitle Borrower 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 holder
of any Note or Swingline Note at the time outstanding, each future holder of any
such Note or Swingline Note, and, if signed by Borrower, on Borrower.
Notwithstanding the foregoing, Borrower, Agent, and any Affected Lender (defined
below) may amend this Agreement without the consent of any other Lender or
Swingline Lender (i) to increase the Commitment of any such Affected Lender or
(ii) to add such Affected Lender as a party to this Agreement, provided that in
each case under (i) or (ii) above, the aggregate Commitments of all Lenders
after giving effect to such amendment shall not exceed One Hundred Seventy-Five
Million Dollars ($175,000,000) (collectively, a "Permitted Amendment"). For
purposes of this section, "Affected Lender" shall mean any Lender increasing its
Commitment or any new Lender added as a party to this Agreement, pursuant to the
preceding sentence. Agent shall promptly notify each Lender of any Permitted
Amendment and shall send
57
each Lender a copy of such Permitted Amendment which shall be substantially in
the form of EXHIBIT H.
11.7 NO SET-OFFS BY BORROWER. All sums payable by Borrower
pursuant to this Agreement, the Note, the Swingline Note or any of the other
Loan Documents shall be payable without notice or demand and shall be payable in
U.S. Dollars without set-off or reduction of any manner whatsoever.
11.8 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.
11.9 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.
11.10 WAIVER OF JURY TRIAL. LENDERS, SWINGLINE LENDER, AGENT AND
BORROWER AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR
SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR
ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT, ANY
RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY LENDERS,
SWINGLINE LENDER, AGENT AND BORROWER, AND THESE PROVISIONS SHALL BE
SUBJECT TO NO EXCEPTIONS. NEITHER LENDERS, SWINGLINE LENDER, AGENT NOR
BORROWER HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
11.11 SUBSEQUENT HOLDERS. The terms and provisions of the Loan
Documents shall inure to the benefit of any assignee or transferee of the Note
or the Swingline Note, and in the event of such transfer or assignment, the
rights and privileges conferred in the Loan Documents upon Lenders and Swingline
Lender shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.
11.12 ASSIGNABILITY.
(a) This Agreement, the Note, the Swingline Note 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 Borrower may not assign its rights
58
hereunder or thereunder or any interest herein or therein, whether by operation
of law or otherwise, without the prior written consent of each Lender. Each
Lender and Swingline Lender shall, with the prior consent of each of Borrower
and Agent, which consent in each case shall not be unreasonably withheld, (i)
have the right in accordance with this Section 11.12 to sell and assign either
(A) all of its interest or (B) any portion of its interest equal to or greater
than Seven Million Five Hundred Thousand Dollars ($7,500,000), under this
Agreement, the Note, the Swingline Note and the other Loan Documents and (ii) to
grant any participation or other interest herein or therein; provided, that if a
Lender or Swingline Lender sells or assigns less than all of its interest under
this Agreement and the other Loan Documents, it shall continue to hold at least
a Seven Million Five Hundred Thousand Dollar ($7,500,000) interest after such
sale or assignment; provided further, that upon any such sale and assignment or
participation, such Lender shall pay to Agent a documentation fee equal to Two
Thousand Five Hundred Dollars ($2,500), unless such sale and assignment or
participation is to an Affiliate of such Lender.
(b) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Lender may assign all
or any portion of the Loans, the Note or the Swingline Note held by it to any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned Loans, Note or Swingline Note made by
Borrower to or for the account of the assigning or pledging Lender in accordance
with the terms of this Agreement shall satisfy Borrower's obligations hereunder
in respect to such assigned Loans, Note or Swingline Note to the extent of such
payment. No such assignment shall release the assigning Lender from its
obligations hereunder.
11.13 CONFIDENTIALITY. Each Lender agrees to hold in trust and
confidence all non-public information concerning the business or operation of
Borrower received from Borrower and clearly marked as confidential, and to use
such information only in connection with its administration of this Agreement,
except with the consent of Borrower. This Section 11.13 shall survive the
performance and repayment in full of the Obligations hereunder.
11.14 COUNTERPARTS. This Agreement and any amendments, waivers,
consents, or supplements hereto and thereto 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 and telephonic notification thereof has
been received by Borrower and Agent.
59
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
BORROWER LEASING SOLUTIONS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Its:
-------------------------------------
Notices to be sent to:
LEASING SOLUTIONS, INC.
00 Xxxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx, Treasurer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to:
Xxxxxxx X. Xxxxxxxx, Esq.
Leasing Solutions, Inc.
00 Xxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
60
AGENT THE FIRST NATIONAL BANK OF BOSTON
By:
---------------------------------------
Name:
-------------------------------------
Agent's Payment Office:
_________________
ABA No.
________________, California
for credit to: THE FIRST NATIONAL BANK OF BOSTON
Account No.:
Notices to be sent to:
THE FIRST NATIONAL BANK OF BOSTON
The First National Bank of Boston
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: High Technology Division
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to:
XXXXXX GODWARD XXXXXX XXXXXXXXX & XXXXX
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
61
SWINGLINE LENDER THE FIRST NATIONAL BANK OF BOSTON
By:
---------------------------------------
Name:
-------------------------------------
Notices to be sent to:
THE FIRST NATIONAL BANK OF BOSTON
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: High Technology Division
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
LENDERS THE FIRST NATIONAL BANK OF BOSTON
By:
---------------------------------------
Name:
-------------------------------------
Notices to be sent to:
THE FIRST NATIONAL BANK OF BOSTON
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: High Technology Division
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
62
FLEET BANK, N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
FLEET BANK, N.A.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
XXXXX FARGO BANK, N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
NOTICES TO BE SENT TO:
XXXXX FARGO BANK, N.A.
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxx Banking, Xxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXX XXXXXXXX XXXX XX XXXXXXXXXX
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
THE SUMITOMO BANK OF CALIFORNIA
Commercial Banking Division
00 X. Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
BANK HAPOALIM B.M.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
BANK HAPOALIM B.M.
0000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
64
CORESTATES BANK N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
CORESTATES BANK N.A.
Lease Finance Group
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Bldg., 11th Floor
PO Box 7618 (no PO Box for overnight mail)
FC 1-8-11-24
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx, Vice President
Telephone No.: (000) 000-0000
Xxxxx D'Antonio, Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE BANK OF NOVA SCOTIA
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
THE BANK OF NOVA SCOTIA
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Sr. Relationship Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
UNION BANK OF CALIFORNIA, N.A.
0000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx Xxxxxxxxxx, Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
MELLON BANK, N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
MELLON BANK, N.A.
One Mellon Bank Center
Room 151-0370
Xxxxxxxxxx, Xxxxxxxxxxxx
00000-0000
Attention: Xxxxx Xxxxxxxx, First Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
66
THE SUMITOMO BANK, LIMITED
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Notices to be sent to:
THE SUMITOMO BANK, LIMITED
U.S. Commercial Banking Department
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx, Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
67
EXHIBIT A-1
FORM OF PROMISSORY NOTE
$155,000,000 San Jose, California
Date: September 13, 1996
LEASING SOLUTIONS, INC., a California corporation ("Borrower"), for value
received, hereby promises to pay to the order of THE FIRST NATIONAL BANK OF
BOSTON ("Agent"), in lawful money of the United States of America on September
11, 1997, pursuant to that certain Amended and Restated Warehousing Credit
Agreement, dated as of September 13, 1996, by and among Borrower, the Lenders
named therein and The First National Bank of Boston, as Agent (the "Credit
Agreement"), the lesser of (i) the principal amount of One Hundred Fifty-Five
/Million Dollars ($155,000,000) or (ii) the principal amount of all Loans
outstanding as of the maturity date hereof.
This Note is the Note referred to in the Credit Agreement. All terms defined
in the Credit Agreement shall have the same definitions when used herein, unless
otherwise defined herein.
1. INTEREST RATE
Borrower further promises to pay interest on each Loan hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Credit Agreement.
2. PLACE OF PAYMENT
All amounts payable hereunder shall be payable in immediately available
funds from the Designated Deposit Account or other immediately available funds.
3. APPLICATION OF PAYMENTS; PREPAYMENT; ACCELERATION
Payment on this Note shall be applied in the manner set forth in the
Credit Agreement. The Credit Agreement contains provisions for acceleration of
the maturity of Loans hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.
All Loans made by Lenders to Borrower pursuant to the Credit Agreement
shall be recorded by Agent on the books and records of Agent. The failure of
Agent to record any Loan or any prepayment or payment made on account of the
principal balance hereof shall not
1
limit or otherwise affect the obligation of Borrower under this Note and under
the Credit Agreement to pay the principal, interest and other amounts due and
payable under the Loans.
Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate.
4. DEFAULT
Borrower's failure to timely pay any of the principal amounts hereunder
on the date the same shall become due and payable or any installment of interest
within five calendar days after the same shall become due and payable, shall
constitute a default under this Note. Upon the occurrence of a default hereunder
or an Event of Default under the Credit Agreement, all unpaid principal, accrued
interest and other amounts owing hereunder shall, at the option of Requisite
Lenders, be immediately collectible by or on behalf of Lenders pursuant to the
Credit Agreement and applicable law.
5. WAIVERS
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all reasonable out-of-
pocket costs of collection incurred, including reasonable allocated costs of
inhouse counsel and reasonable attorneys' fees, costs and expenses in accordance
with the terms of the Credit Agreement.
The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
6. SECURED NOTE
The amount of this Note is secured by the Collateral identified and
described as security therefor in the Security Agreement.
7. GOVERNING LAW
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, excluding conflict of laws
principles that would cause the application of the laws of any other
jurisdiction.
2
8. SUCCESSORS AND ASSIGNS
The provisions of this Note shall inure to the benefit of and be
binding upon any successor to Borrower and shall extend to any holder hereof.
Leasing Solutions, Inc.,
a California corporation
By:
---------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
3
EXHIBIT A-2
FORM OF SWINGLINE PROMISSORY NOTE
$5,000,000 San Jose, California
Date: September 13, 1996
LEASING SOLUTIONS, INC., a California corporation ("Borrower"), for value
received, hereby promises to pay to the order of THE FIRST NATIONAL BANK OF
BOSTON, in its individual capacity ("FNBB"), in lawful money of the United
States of America on September 11, 1997, pursuant to that certain Amended and
Restated Warehousing Credit Agreement, dated as of September 13, 1996, by and
among Borrower, the Lenders named therein and The First National Bank of Boston,
as Agent (the "Credit Agreement"), the lesser of (i) the principal amount of
Five Million Dollars ($5,000,000) or (ii) the principal amount of all Swingline
Loans outstanding as of the maturity date hereof.
This Swingline Note is the Swingline Note referred to in the Credit
Agreement. All terms defined in the Credit Agreement shall have the same
definitions when used herein, unless otherwise defined herein.
1. INTEREST RATE
Borrower further promises to pay interest on each Loan hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Credit Agreement.
2. PLACE OF PAYMENT
All amounts payable hereunder shall be payable in immediately available
funds from the Designated Deposit Account or other immediately available funds.
3. APPLICATION OF PAYMENTS; PREPAYMENT; ACCELERATION
Payment on this Swingline Note shall be applied in the manner set forth
in the Credit Agreement. The Credit Agreement contains provisions for
acceleration of the maturity of Loans hereunder upon the occurrence of certain
stated events and also provides for optional and mandatory prepayments of
principal hereof prior to any stated maturity upon the terms and conditions
therein specified.
All Loans made by Lenders to Borrower pursuant to the Credit Agreement
shall be recorded by Agent on the books and records of Agent. The failure of
Agent to record any Loan or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Swingline Note and under the
1
Credit Agreement to pay the principal, interest and other amounts due and
payable under the Loans.
Any principal or interest payments on this Swingline Note not paid when
due, whether at stated maturity, by acceleration or otherwise, shall bear
interest at the Default Rate.
4. DEFAULT
Borrower's failure to timely pay any of the principal amounts hereunder
on the date the same shall become due and payable or any installment of interest
within five calendar days after the same shall become due and payable, shall
constitute a default under this Swingline Note. Upon the occurrence of a default
hereunder or an Event of Default under the Credit Agreement, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Requisite Lenders, be immediately collectible by or on behalf of
Lenders pursuant to the Credit Agreement and applicable law.
5. WAIVERS
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Swingline Note, and shall pay all
reasonable out-of-pocket costs of collection incurred, including reasonable
allocated costs of inhouse counsel and reasonable attorneys' fees, costs and
expenses in accordance with the terms of the Credit Agreement.
The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.
6. SECURED NOTE
The amount of this Swingline Note is secured by the Collateral
identified and described as security therefor in the Security Agreement.
7. GOVERNING LAW
This Swingline Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, excluding conflict of laws
principles that would cause the application of the laws of any other
jurisdiction.
2
8. SUCCESSORS AND ASSIGNS
The provisions of this Swingline Note shall inure to the benefit of and
be binding upon any successor to Borrower and shall extend to any holder hereof.
LEASING SOLUTIONS, INC.,
a California corporation
By:
---------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
3
Exhibit C
To be attached at the first funding.
4
Exhibit E
See attached pages.
5
Schedule 6.7
ERISA Plans
None.
6
Schedule 1
-------------------------------------------------------------------------------
Commitment Commitment Percentage
-------------------------------------------------------------------------------
The First National Bank of Boston $ 25,000,000 16.12902
-------------------------------------------------------------------------------
Fleet Bank, N.A. $ 22,500,000 14.51613
-------------------------------------------------------------------------------
Bank Hapoalim B.M. $ 12,500,000 8.06452
-------------------------------------------------------------------------------
CoreStates Bank, N.A. $ 20,000,000 12.90323
-------------------------------------------------------------------------------
The Sumitomo Bank of California $ 15,000,000 9.67742
-------------------------------------------------------------------------------
Bank of Nova Scotia $ 7,500,000 4.00000
-------------------------------------------------------------------------------
Mellon Bank, N.A. $ 7,500,000 4.83871
-------------------------------------------------------------------------------
The Union Bank of California, N.A. $ 20,000,000 12.90323
-------------------------------------------------------------------------------
Xxxxx Fargo Bank $ 17,500,000 11.29032
-------------------------------------------------------------------------------
The Sumitomo Bank, LTD $ 7,500,000 4.83871
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total $155,000,000 100.00000000%
-------------------------------------------------------------------------------
7
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of September 13, 1996 (the "Security
Agreement"), is made by LEASING SOLUTIONS, INC., a California corporation
("Grantor") in favor of THE FIRST NATIONAL BANK OF BOSTON, not in its capacity
as a Lender (as defined in the Credit Agreement) but solely as agent for the
benefit of the Lenders and Swingline Lender ("Agent").
RECITAL
A. Pursuant to that certain Amended and Restated Warehousing Credit
Agreement dated as of September 13, 1996 (as the same may from time to time be
amended, modified, restated, supplemented or extended, the "Credit Agreement")
by and among Grantor, Lenders (as defined therein), and Agent, for the benefit
of Lenders and Swingline Lender, Lenders and Swingline Lender have agreed to
make certain advances of money and to extend certain financial accommodations to
Grantor in the amounts and manner set forth in the Credit Agreement. All
capitalized terms used herein without definition shall have the meanings
ascribed to them in the Credit Agreement.
B. Lenders and Swingline Lender are willing to make the Loans, but only
upon the condition, among others, that Grantor shall have executed and delivered
to Agent, for the benefit of Lenders and Swingline Lender, this Agreement
whereby Grantor shall have granted to Agent, for the benefit of Lenders and
Swingline Lender, a security interest in the Collateral (as hereinafter defined)
securing Grantor's obligations under the Credit Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make the Loans and for other good and valuable consideration, the
receipt and adequacy of why acknowledged and intending to be legally bound,
Grantor hereby represents, warrants, covenants and agrees as follows:
1. GRANT OF SECURITY. Grantor hereby assigns, pledges and grants a
security interest to Agent, for the benefit of Lenders and Swingline Lender, in
all of Grantor's right, title and interest to the following described property
(the "Collateral"):
(a) All of Grantor's right, title and interest in and to any Leases
and other agreements that shall be described on each Schedule to be executed by
Agent and Grantor from time to time in the form of Schedule 1 to this Agreement
and all rentals thereunder and all proceeds thereof, including, without
limitation, all supporting documentation, guaranties, other
1.
credit documentation, financing statements, certificates of acceptance and other
lease documentation;
(b) All of the Equipment covered by such Leases, together with all
attachments, additions, accessories, accessions, improvements, substitutions and
replacements thereto and therefor, now existing or hereafter acquired by
Grantor, and all proceeds, including insurance proceeds, thereof;
(c) All of Grantor's rights as a secured party in any and all of
lessee's interest in Equipment, machinery, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments, including, without limitation,
all attachments, additions, accessories, accessions, improvements, substitutions
and replacements thereto and therefor, whether now owned or hereafter acquired,
and all proceeds, including insurance proceeds, thereof;
(d) All claims, rights and remedies which Grantor may now or hereafter
have with respect to the maintenance and storage of such Equipment;
(e) All claims, rights and remedies which Grantor may now or hereafter
have against Sybase, Inc. or any other software licensor, with respect to
Equipment which is software under an Eligible Software Lease;
(f) All governmental or other approvals, permits, licenses, franchise
agreements, authorities or certificates required or used in connection with the
ownership, operation and maintenance of such Equipment;
(g) Any beneficial interest of Grantor under any trust created with
respect to such Equipment;
(h) All rights of the Grantor under any agreement relating to such
Equipment, including, without limitation, any agreement in which Grantor or
Grantor's predecessor in interest acquired, or is acquiring, rights in the
Equipment;
(i) Any agreement or commitment of a third party to purchase, lend
funds secured by, or otherwise provide financing with respect to any such Lease
or Equipment;
(j) All deposit accounts, cash, instruments, documents, securities,
chattel paper, contracts, or other property of Grantor at any time in the
possession of any Lender or Agent; provided, that the items described in this
subsection (j) shall only constitute Collateral to the extent that such items
are listed in other subsections of this SECTION 1 or are proceeds or products of
Collateral listed in other subsections of this SECTION 1; and
(k) All proceeds and products of the foregoing, other than the
collateral described in subsection (j) above (to the extent that such collateral
described in subsection (j)
2.
does not constitute (1) collateral which is also described in any of subsections
(a) through (i) or (2) proceeds or products of any collateral described in any
of subsections (a) through (i)), (and proceeds and products of proceeds and
products), in whatever form and whether such proceeds arise before or after the
commencement of any case under Title 11 of the United States Code (the
"Bankruptcy Code") by or against Grantor, including, without limitation, all
payments with respect to such Equipment under insurance whether or not Agent or
any Lender is the loss payee thereof, all proceeds of any governmental taking,
and any indemnity, warranty, letter of credit (including the right to draw on
such letter of credit) or guaranty payable by reason of any default under, loss
of, or damage to or otherwise with respect to any of the foregoing.
All of the property described in subsections (a) through (k), above, is herein
collectively called the "Collateral." References below in this Agreement to
"Lease," "Leases," or "Equipment" shall be deemed to refer only to such of the
same as are included as Collateral under this Agreement.
2. SECURITY FOR AMOUNTS PAYABLE. This Agreement secures the payment
of all amounts payable by Grantor in connection with the repayment of Loans made
from time to time by Lenders, including, without limitation, the amounts payable
by Grantor under the Credit Agreement, the Note issued pursuant to the Credit
Agreement and any note or notes issued in connection with the refunding or
rollover of such Note, and all amounts, whether for fees, expenses or otherwise,
of Grantor now or hereafter payable to Agent or any Lender or any of Agent's or
any Lender's affiliates under the Credit Agreement, the Note, each Schedule, any
other credit or loan agreement or note, any of the Loan Documents (including
this Agreement) or any other security agreement (all such amounts payable being
the "Amounts Payable") and all other Obligations under the Loan Documents.
3. LIABILITY UNDER LEASES. Anything herein to the contrary
notwithstanding, (a) Grantor shall remain liable under the Leases to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by
Agent or any Lender of any of the rights hereunder shall not release Grantor
from any of its duties or obligations under the Leases and (c) neither Agent nor
any Lender shall have any obligations or liability under the Leases by reason of
this Agreement, nor shall Agent or any Lender be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
4. REPRESENTATIONS AND WARRANTIES. Upon the addition of any Lease
to the Collateral, Grantor shall make the representations, warranties and
covenants set forth in a Schedule in the form of Schedule 1 hereto and shall
deliver such Schedule to Agent, for the benefit of Lenders and Swingline Lender,
with respect to such Lease.
5. DOCUMENTATION.
3.
(a) Grantor shall from time to time, at the expense of
Grantor, promptly execute and deliver all further instruments and documents, and
take all further action, that Agent or Requisite Lenders may reasonably request,
in order to perfect with first priority and otherwise protect the security
interest granted hereby or to enable Agent or Requisite Lenders to exercise and
enforce their rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Grantor shall: (i) duly note
the security interest of Agent and Lenders on each certificate of title covering
any of the Equipment and on any registration without certification of title
covering any of the Equipment, and (ii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, and make such recordings, as Agent or Requisite Lenders may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, including, without limitation, execution and
filing of such instruments and recordings as may be necessary under state or
federal law relating to the creation and perfection of a security interest in
any of the Leases and Equipment.
(b) To the best of its ability, Grantor shall furnish to
Agent from time to time statements and schedules further identifying and
describing the Collateral (including, without limitation, the locations and
condition thereof) and such other reports in connection with the Collateral as
Agent or Requisite Lenders may reasonably request, all in reasonable detail.
6. EQUIPMENT. Grantor shall:
(a) Cause the Equipment to be kept in jurisdictions where
all action required by SECTION 5 has been taken with respect to the
Equipment.
(b) Cause each lessee under the Leases to maintain and
preserve the Equipment covered by its Lease in accordance, in all material
respects, with the terms and provisions thereof and otherwise to perform in a
timely manner all obligations of the lessee under its Lease. Without limitation
of the foregoing, Grantor shall cause the Equipment to be maintained and
preserved, by the lessee or otherwise, in the same condition, repair and working
order as when delivered to the lessee, ordinary wear and tear excepted, and in
accordance with any manufacturer's manual, and shall forthwith, or in the case
of any loss or damage to any of the Equipment as quickly as practicable after
the occurrence thereof, make or cause to be made, by the lessee or otherwise,
all repairs, replacements and other improvements in connection therewith which
are necessary or desirable to such end. Grantor shall promptly furnish to Agent
a statement respecting any material loss or damage to any of the Equipment.
(c) Pay promptly when due, or cause to be so paid in
accordance with the Leases or contest in good faith by appropriate proceedings
and with adequate reserves established and maintained in accordance with GAAP,
all property and other taxes, fees, assessments and governmental charges or
levies imposed upon or in respect of the Equipment or this Agreement and all
claims, including claims for labor, materials and supplies, against the
Equipment.
(d) Perform in a timely manner all obligations of Grantor
under the Leases.
4.
(e) At the reasonable request of Agent or Requisite Lenders,
at Grantor's own cost and expense, cause each item of the Equipment (if not
prevented by applicable law or regulations or governmental authority, and if it
will not adversely affect the proper use thereof) to be legibly marked in a
reasonably prominent location with such a plate, disk or other marking of
customary size, and bearing such a legend, as shall be appropriate or desirable
to evidence the fact that it is subject to the lien and security interest of
Agent and Lenders hereunder. So long as Agent or Lenders shall retain a security
interest in such item of Equipment, Grantor shall not remove or deface, or
permit to be removed or defaced, any such plate, disk, or other marking or the
identifying manufacturer's serial number, and, in the event of such removal,
defacement or other disappearance thereof, Grantor shall promptly cause such
plate, disk or other marking or serial number to be promptly replaced.
7. INSURANCE.
(a) Grantor shall cause the lessees under the Leases to
maintain insurance on the Equipment strictly in accordance with the terms and
provisions of the Leases. Without limitation of the foregoing, Grantor shall at
its own expense maintain such additional insurance in such amounts, against such
risks, in such form and with such insurers as provided by SECTION 5.3 of the
Credit Agreement. Grantor shall, if so requested by Agent or Requisite Lenders,
deliver to Agent original or duplicate policies of such insurance and, as Agent
or Requisite Lenders may reasonably request, a report of a reputable insurance
broker with respect to such insurance.
(b) Reimbursement under any liability insurance maintained
pursuant to this SECTION 7 may be paid directly to the person who incurred
liability covered by such insurance. In case of any loss involving damage to
Equipment when SECTION 7(c) is not applicable, Grantor shall make or cause to be
made, by the lessee or otherwise, the necessary repairs to or replacement of
such Equipment, and any proceeds of insurance maintained pursuant to this
Section 7 shall be paid to Grantor, the lessee or otherwise, as the case may be,
as reimbursement for the costs of such repairs or replacement.
(c) Upon the occurrence and during the continuance of any
Event of Default, all insurance payments in respect of such Equipment shall be
paid to and applied by Agent as specified in SECTION 13(d) hereof, except
insofar as the Lease covering such Equipment provides for the insurance payments
to be paid to the lessee for purposes of repairing the Equipment."
8. LEASES.
(a) Grantor shall keep its principal place of business and
chief executive office and the office where it keeps its records and files
concerning the Leases and its copies of the Leases at the location specified in
SECTION 16 or, upon thirty (30) days' prior written notice to Agent, at another
location in a jurisdiction where all action required by SECTION 5 shall have
been
5.
taken with respect to the Leases. Grantor shall hold and preserve such records
and files concerning the Leases and shall permit representatives of Agent or
Lenders at any time during normal business hours to inspect and make abstracts
from such records and files.
(b) Grantor shall take such action as Grantor may deem
necessary or advisable to enforce collection of the Leases. Agent or Requisite
Lenders shall have the right at any time while an Event of Default is continuing
and upon written notice to Grantor of its intention to do so, at the expense of
Grantor, to enforce collection of any of the Leases in the same manner and to
the same extent as Grantor might have done.
(c) Grantor shall accept no prepayment from any lessee of
amounts due under any of the Leases if the same shall not be immediately applied
to prepay the principal amount advanced under this Agreement, without obtaining
the prior written consent of Requisite Lenders, except such amounts as are
required under any Lease to be paid in advance (including, without limitation, a
security deposit or a maintenance reserve account).
9. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) Except as expressly permitted by the Credit Agreement,
sell, assign (by operation of law of otherwise), lease, charter or otherwise
dispose of any of the Collateral without the prior written consent of Requisite
Lenders; or
(b) Create or suffer to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of the Collateral,
except for Permitted Liens, for so long as such security interests are permitted
by the provisions of this Agreement.
10. ATTORNEY-IN-FACT. Grantor hereby irrevocably appoints Agent, on
behalf of Lenders, Grantor's attorney-in-fact, with full authority in the place
and stead of Grantor and in the name of Grantor, Agent, any Lender or otherwise,
from time to time in Agent's or Requisite Lenders' discretion, and, with respect
to (a) through (d) of this Section 10, from time to time in Requisite Lenders'
discretion upon the occurrence of an Event of Default and so long as such Event
of Default is continuing, to take any action and to execute any instrument which
Requisite Lenders may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to
Agent, for the benefit of Lenders and Swingline Lender, or to any Lender
pursuant to SECTION 7;
(b) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
6.
(c) to receive, indorse and collect any drafts or other
instruments and documents in connection with clauses (a) and (b), above;
(d) to file claims or take any action or institute any
proceedings which Requisite Lenders may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Lenders with respect to any of the Collateral; and
(e) to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of Grantor where permitted by law.
11. AGENT MAY PERFORM. If Grantor fails to perform any agreement
contained herein, Agent, on behalf of Lenders, may, upon notice to Grantor, or
if an Event of Default has occurred and is continuing, without notice, perform,
or cause performance of, such agreement, and the expenses of Agent incurred in
connection therewith shall be payable by Grantor under SECTION 14(b).
12. NO DUTIES. The powers conferred on Agent and each Lender
hereunder are solely to protect their respective interests in the Collateral and
shall not impose any duty upon Agent or any Lender to exercise any such powers.
Except for the safe custody of any Collateral in their possession and the
accounting for moneys actually received by them hereunder, neither Agent nor any
Lender shall have any duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
13. REMEDIES. If any Event of Default shall have occurred and be
continuing and Grantor shall not have paid all Amounts Payable:
(a) Requisite Lenders may, by notice to Grantor, declare all
of the Amounts Payable to be forthwith due and payable.
(b) Requisite Lenders, in lieu of or in addition to
exercising any other power hereby granted, may without notice, demand or
declaration of default, which are hereby waived by Grantor, proceed by an action
or actions in equity or at law for the seizure and sale of the Collateral or any
part thereof, for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, for the
foreclosure or sale of the Collateral or any part thereof under the judgment or
decree of any court of competent jurisdiction, for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Collateral or any part
thereof or for the enforcement of any other appropriate equitable or legal
remedy.
(c) Requisite Lenders may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to Agent or Lenders, all the rights and remedies (i) of
Grantor under each Lease and other agreement or commitment forming
7.
part of the Collateral and (ii) of a secured party on default under the UCC,
whether or not the UCC applies to the affected Collateral, and also may (A)
require Grantor to, and Grantor hereby agrees that at its expense and upon
request of Agent it shall forthwith, assemble all or part of the Collateral as
directed by Agent and make it available to Agent at such places reasonably
convenient to all parties as Agent may designate and (B) without notice except
as specified below, sell the Collateral or any part thereof in one or more
public or private sales, at any of Lenders' offices or elsewhere, for cash, on
credit or for future delivery, and at such price or prices and upon such other
terms as Agent may deem commercially reasonable. Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days' notice
to Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Neither
Agent nor any Lender shall be obligated to make any sale of Collateral
regardless of notice of sale having been given. Agent and Lenders may adjourn
any public or private sale from time to time by public announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(d) All cash proceeds received by Agent or any Lender in
respect of any sale of, collection from or other realization upon all or any
part of the Collateral shall be applied as follows:
(i) First, to the payment of all reasonable out-of-
pocket costs and expenses incident to the enforcement of this Agreement,
including but not limited to compensation to the agents, contractors and
attorneys of Agent and reasonable allocated costs of in-house counsel;
(ii) Second, to the payment of the Amounts Payable
and other Obligations; and
(iii) Finally, the remainder, if any, to Grantor or to
whomever may be lawfully entitled to receive such remainder; provided, however,
that Grantor shall remain liable to Agent and Lenders for any deficiency in the
Amounts Payable remaining after the application of such proceeds as provided in
this Section 13(d) and, provided, further, that nothing herein contained shall
in any way limit or restrict Agent's or Lenders' right to proceed directly
against Grantor without first exhausting, or in any manner exercising its rights
in respect of, the Collateral.
(e) Agent and each Lender shall have the right to become the
purchaser at any public sale made pursuant to the provisions of this Section 13
and shall have the right to credit against the amount of the bid made therefor
the amount payable to Agent or such Lender, as the case may be, out of the net
proceeds of such sale. Recitals contained in any conveyance to any purchaser at
any sale made hereunder shall, absent manifest error, conclusively establish the
truth and accuracy of the matters therein stated, including, without limitation,
nonpayment of the Amounts Payable and advertisement and conduct of such sale in
the manner provided herein.
8.
Grantor does hereby ratify and confirm all legal acts that Agent may do in
carrying out the provisions of this Agreement.
(f) Any sale of the Collateral or any part thereof pursuant
to the provisions of this SECTION 13 shall operate to divest all right, title,
interest, claim and demand of Grantor in and to the property sold and shall be a
perpetual bar against Grantor. Nevertheless, if requested by Agent or Requisite
Lenders to do so, Grantor shall join in the execution, acknowledgement and
delivery of all proper conveyances, assignments and transfers of the property so
sold. It shall not be necessary for Agent or any Lender to have physically
present or constructively in its possession any of the Collateral at any such
sale, and Grantor shall deliver all of the Collateral to the purchaser at such
sale on the date of sale and, if it should be impossible or impractical then to
take actual delivery of the Collateral, the title and right of possession to the
Collateral shall pass to the purchaser at such sale as completely as if the same
had been actually present and delivered. Grantor agrees that, if Grantor retains
possession of the property or any part thereof subsequent to such sale, Grantor
shall be considered a tenant at sufferance of the purchaser and shall, if
Grantor remains in possession after demand to remove, be guilty of forceful
detainer and be subject to eviction and removal, forcible or otherwise, with or
without process of law, and all damages by reason thereof are hereby expressly
waived by Grantor.
(g) Subject to any requirements of applicable law, Grantor
agrees that neither Grantor nor any of its Affiliates shall at any time have or
assert any right, under any law pertaining to the marshalling of assets, the
sale of property in the inverse order of alienation, the administration of
estates of decedents, appraisement, valuation, stay, extension or redemption now
or hereafter in force in order to prevent or hinder the rights of Agent or any
Lender or any purchaser of the Collateral or any part thereof under this
Agreement, and Grantor, to the extent permitted by applicable law, hereby waives
the benefit of all such laws.
(h) Upon any sale made under the powers of sale herein
granted and conferred, the receipt of Agent or any Lender, as the case may be,
shall be sufficient discharge to the purchaser or purchasers at any sale for the
purchase money, and such purchaser or purchasers and the heirs, devisees,
personal representatives, successors and assigns thereof shall not, after paying
such purchase money and receiving such receipt of Agent or such Lender, be
obliged to see to the application thereof or be in any way answerable for any
loss, misapplication or nonapplication thereof.
(i) Each and every right, power or remedy hereby granted to
Agent and Lenders is in addition to, and not in derogation of, any right, power
or remedy granted by the Credit Agreement and the Note and shall be cumulative
and not exclusive, and each and every right, power or remedy, whether
specifically hereby granted or otherwise existing, may be exercised from time to
time and as often and in such order as may be deemed expedient by Agent or, as
applicable, any Lender, as the case may be, and the exercise of any such right,
power or remedy shall not be deemed a waiver of the right to exercise, at the
same time or thereafter, any other right, power or remedy. No delay or omission
by Agent or any Lender in the exercise of any right, power or remedy shall
impair any such right, power or remedy or
9.
operate as a waiver thereof or of any other right, power or remedy then or
thereafter existing. Any and all covenants in this instrument may from time to
time by instrument in writing signed by Requisite Lenders be waived to such
extent and in such manner as Requisite Lenders may desire, but no such waiver
shall ever affect or impair Agent's or any Lender's right hereunder, except to
the extent specifically stated in such written instrument.
(j) Notwithstanding the foregoing, Agent and Lenders agree
not to interfere with a lessee's quiet enjoyment of Equipment under a Lease, so
long, but only so long, as no event of default or termination, and no event
which with the giving of notice or lapse of time, or both, would constitute such
an event, has occurred under such Lease.
14. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Agent and each Lender from
and against any and all claims, losses and liabilities growing out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses or liabilities resulting from Agent's or
any such Lender's gross negligence or willful misconduct.
(b) Grantor shall upon demand pay to Agent the amount of any
and all reasonable out-of-pocket expenses, including reasonable allocated costs
of in-house counsel and the reasonable fees and disbursements of its counsel and
or any experts and agents, which Agent may incur in connection with (i) the
custody, preservation, use or operation of, sale of, collection from or other
realization upon any of the Collateral, (ii) the exercise or enforcement of any
of the rights of Agent or any Lender hereunder or (iii) the failure by Grantor
to perform or observe any of the provisions hereof.
15. AMENDMENTS; ETC. Any amendment or waiver of any provision of
this Agreement, and any consent to any departure by Grantor herefrom, shall be
effected in accordance with and shall be governed by SECTION 11.6 of the Credit
Agreement.
16. NOTICES; ETC. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopied or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to each
party at its address set forth in the Credit Agreement or, as to each party, at
such other address as shall be designated by such party in a written notice to
the other party complying as to delivery with the terms of this section. All
such notices and communications shall, when mailed, telegraphed, telecopied or
delivered, be effective on receipt or, if sent by telex, when the telex is sent
and the appropriate answer back is received.
17. CONTINUING SECURITY INTEREST; ETC. This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until payment in full of the Amounts Payable and performance in
full of all of Grantor's Obligations; (b) be binding upon Grantor, its
successors and assigns, provided, however, that Grantor shall not have the right
to assign its rights or obligations hereunder or any interest herein without the
prior written consent of Requisite Lenders; and (c) inure to the benefit of
Agent, Swingline Lender and each
10.
Lender and Agent's, Swingline Lender's and Lenders' respective successors,
transferees and assigns. In the event that (i) there is excess capacity under
the Borrowing Base and (ii) no Default has occurred and is continuing, Agent
shall, upon the request of Grantor, release, on behalf of Lenders, the security
interest granted herein in a particular Lease, in which case Agent's and
Lenders' security interest therein shall terminate, and all rights in such
portion of the Collateral shall revert to Grantor; provided, that (A) in no
event shall Collateral be released if immediately after such release the
outstanding principal balance of the Loans would exceed the Borrowing Base and
(B) the particular Collateral to be released shall be subject to the approval of
Requisite Lenders, in their sole discretion. Upon payment in full of the Amounts
Payable and performance in full of all of Grantor's Obligations, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantor. Upon any such termination, Agent and Lenders shall, at
Grantor's expense, execute and deliver to Grantor such documents as Grantor
shall reasonably request to evidence such termination.
18. GOVERNING LAW; TERMS. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, as applied to
contracts entered into by California residents and to be performed entirely
within California, except to the extent that the validity or perfection of the
security interest hereunder or remedies hereunder in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
California, including federal law. Unless otherwise defined herein, terms used
in Division 9 of the UCC in the State of California are used herein as therein
defined.
19. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be modified rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
20. RELEASES. No release from the lien of this Agreement of any part
of the Collateral by Agent or Lenders shall in any way alter, vary or diminish
the force, effect or lien of this Agreement on the balance of the Collateral.
21. SUBROGATION. This Agreement is made with full substitution and
subrogation of Agent and each Lender in and to all covenants and warranties by
others heretofore given or made in respect of the Collateral or any part
thereof.
22. NATURE OF AGREEMENT. This Agreement will be deemed to be and
may be enforced from time to time as an assignment, chattel mortgage, contract,
deed of trust, financing statement, or security agreement, and from time to time
as any one or more thereof as is appropriate under applicable state law.
23. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, and by different parties hereto in separate counterparts, with the
same effect as if the signatures to each such counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Agreement.
11.
24. HEADINGS. The section headings used in this Agreement are
intended principally for convenience and shall not, by themselves, determine the
rights and obligations of the parties to this Agreement.
25. ENTIRE AGREEMENT. This Agreement, the Credit Agreement, the
Note and each Schedule delivered under this Agreement and all documents or
instruments to be delivered to Agent or any Lender hereunder or thereunder
contain all of the terms and conditions agreed upon by the parties relating to
the subject matter of this Agreement and supersede any and all prior and
contemporaneous agreements, negotiations, correspondence, understandings and
communications of the parties, whether oral or written, respecting that subject
matter.
12.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
GRANTOR: LEASING SOLUTIONS, INC.
By: __________________________
Printed Name__________________
Title: _______________________
AGENT: THE FIRST NATIONAL BANK OF BOSTON, AS AGENT
By: __________________________
Printed Name__________________
Title: _______________________
13.
SCHEDULE 1
LEASE AND EQUIPMENT SCHEDULE
THIS LEASE AND EQUIPMENT SCHEDULE, dated as of ____________________,
19_____ (the "Schedule"), is made by LEASING SOLUTIONS, INC., a California
corporation ("Grantor") in favor of each of the Lenders and THE FIRST NATIONAL
BANK OF BOSTON, as Agent for the benefit of Lenders and Swingline Lender.
RECITAL
A. Pursuant to that certain Amended and Restated Warehousing Credit
Agreement dated as of September 13, 1996 (as the same may from time to time be
amended, modified or supplemented, the "Credit Agreement") by and among Grantor,
Lenders (as defined therein), Swingline Lender (as defined therein) and Agent,
for the benefit of Lenders and Swingline Lender, Lenders and Swingline Lender
have agreed to make certain advances of money and to extend certain financial
accommodations to Grantor in the amounts and manner set forth in the Credit
Agreement.
B. Grantor has executed that certain Security Agreement, dated as of
September 13, 1996, in favor of Lenders, Swingline Lender and Agent (the
"Security Agreement").
C. As a condition precedent to Lenders' obligation to make Loans to
Grantor, the Credit Agreement and the Security Agreement provide that Agent and
Lenders must receive an executed Schedule substantially in this form covering
each Lease and the Equipment covered thereby which is Collateral for the Loans.
NOW, THEREFORE, the parties agree as follows:
26. DEFINITIONS AND TERMS
The terms defined in the Credit Agreement and the Security
Agreement have the respective meanings set forth therein and such definitions
are incorporated herein by this reference. The definitions are equally
applicable to both the singular and plural forms of the respective terms.
27. INCLUSION OF LEASES OR EQUIPMENT SCHEDULES AND EQUIPMENT IN
COLLATERAL
Each of the Leases listed in Exhibit A hereto together with all
of the Equipment subject to each such Lease is hereby included as "Collateral,"
as defined in Section 1 of the Security Agreement, to the same effect as if such
Lease and Equipment were expressly set forth in the definition of Collateral
contained in such Security Agreement.
1.
28. REPRESENTATIONS AND WARRANTIES RESPECTING COLLATERAL
Grantor hereby represents and warrants with respect to the Lease
and Equipment described in Section 2 above, as follows:
(a) The principal place of business and chief executive
office of Grantor and the office where Grantor keeps its records and files
concerning the Leases and its original executed copies of the Leases are located
at 00 Xxxxxxx Xxxx., Xxxxx 0000, Xxx Xxxx, Xxxxxxxxxx 00000. Grantor has
delivered to Agent, for the benefit of Lenders and Swingline Lender, a photocopy
of each of the Leases.
(b) Grantor owns the Collateral described in Section 2 above
free and clear of any lien, security interest, charge or encumbrance, except for
(i) the security interest created by the Security Agreement, (ii) the interests
of the lessees under the Leases, and (iii) other Permitted Liens. Grantor has
paid, caused to be paid or will cause to promptly be paid, all invoice prices,
transportation and delivery costs, taxes and any acquisition or other fees
relating to the Equipment, any Eligible Software Lease, or any Lease purchased
from a broker. Grantor has all necessary authority to encumber and grant a
security interest in the Collateral.
(c) Each item of Equipment the ownership of which, under
applicable law, is or should be evidenced by a certificate of title, will be
properly titled in the name of Grantor no later than the next Funding Date after
the date of this Schedule.
(d) All information furnished or to be furnished Agent by or
on behalf of Grantor in connection with the Collateral is or will be complete
and accurate. Grantor shall defend and hold harmless Agent against all persons
whomsoever claiming the Collateral or any part thereof.
(e) Grantor has received from the lessees under the Leases
all such documents, schedules, agreements, Certificates of Delivery and
Acceptance, certificates and other items as were required pursuant to each such
Lease, and each such Lease is in the form attached to the Credit Agreement as
Exhibit E, as may be modified pursuant to the Credit Agreement.
(f) This Schedule together with the Security Agreement
create a valid security interest of Agent and Lenders in the Collateral (subject
only to the security interests of others referred to in (b), for so long as such
security interests are permitted by the provisions of the Security Agreement),
securing the payment of the Obligations, and all filings and other actions
necessary to perfect and protect such security interest have been duly taken,
including, without limitation, the making of all filings against the lessees
under the Leases necessary to perfect Grantor's interest in the Equipment.
2.
(g) No consent, authorization, approval or other action by,
and no notice to or filing with, any Governmental Agency, lessee or other person
or entity is required either (i) for the grant by Grantor of the security
interest granted in the Security Agreement and hereby or for the execution,
delivery or performance of this Schedule by Grantor or (ii) except for the
filing of a financing statement in the appropriate jurisdictions, for the
perfection or exercise by Agent of Lenders' rights and remedies hereunder.
(h) Each Lease described in Exhibit A constitutes the valid
and enforceable obligation of the lessee thereunder, enforceable against such
lessee in accordance with its respective terms, except as the enforceability
thereof may be subject to or limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and except as the remedy of specific performance
or of injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought. Each item of Equipment subject to any
such Lease has been delivered to, and accepted by, the lessee under the
respective Lease. No event of default or termination, and no event which with
the giving of notice or lapse of time, or both, would constitute such an event,
has occurred on the part of any party under any such Lease. There does not exist
in respect of any such Lease any claim, offset, defense or other right on the
part of the lessee thereunder to reduce in any manner the amounts payable under
such Lease.
29. GENERAL REPRESENTATIONS AND WARRANTIES
(a) The representations and warranties set forth in Section
4 of the Credit Agreement are true and correct as of the date hereof, provided
that the representations and warranties set forth in Section 4.6 of the Credit
Agreement shall be deemed to be made with respect to the financial statements
most recently delivered to Lenders.
(b) As of the date hereof, there exists no Default under the
Credit Agreement.
30. SCHEDULE
This Schedule shall be construed as supplemental to the Security
Agreement and shall form a part of the Security Agreement. The Security
Agreement is incorporated herein by this reference. The Security Agreement, and
each and every provision thereof, remain in full force and effect and are hereby
ratified, approved and confirmed.
31. COUNTERPARTS
This Schedule may be executed in separate counterparts, each of
which when executed and delivered is an original, but all such counterparts
shall together constitute the Schedule.
3.
IN WITNESS WHEREOF, Grantor has executed this Schedule as of the date
first above written.
GRANTOR: LEASING SOLUTIONS, INC.
By____________________________
Printed Name__________________
Title_________________________
AGENT: THE FIRST NATIONAL BANK OF BOSTON, AS AGENT
By____________________________
Printed Name__________________
Title_________________________
4.
EXHIBIT A
LEASES
5.
