Exhibit 10.3.1
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MOBILE MINI, INC.
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LOAN AND SECURITY AGREEMENT
Dated: February 11, 2002
$250,000,000
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FLEET CAPITAL CORPORATION
Individually and as Agent for any Lender which is
or becomes a Party hereto
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FLEET SECURITIES, INC.
Sole Advisor, Lead Arranger and Book Manager
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BANK OF AMERICA, N.A.
and
WASHINGTON MUTUAL BANK
as Co-Documentation Agents
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BANK ONE, NA
and
XX XXXXXX XXXXX BANK
as Co-Syndication Agents
TABLE OF CONTENTS
Section 1. CREDIT FACILITY.......................................................... 1
1.1 Revolving Credit Facility................................................ 1
1.2 Letters of Credit; LC Guaranties......................................... 2
Section 2. INTEREST, FEES AND CHARGES............................................... 3
2.1 Interest................................................................. 3
2.2 Computation of Interest and Fees......................................... 3
2.3 Fee Letter............................................................... 3
2.4 Letter of Credit and LC Guaranty Fees.................................... 3
2.5 Unused Line Fee.......................................................... 4
2.6 [intentionally omitted].................................................. 4
2.7 Audit Fees............................................................... 4
2.8 Reimbursement of Expenses................................................ 4
2.9 Bank Charges............................................................. 5
2.10 Collateral Protection Expenses........................................... 5
2.11 Payment of Charges....................................................... 5
Section 3. LOAN ADMINISTRATION...................................................... 5
3.1 Manner of Borrowing Revolving Credit Loans; Swing Line Loan.............. 5
3.2 Payments................................................................. 10
3.3 Mandatory and Optional Prepayments....................................... 11
3.4 Application of Payments and Collections.................................. 12
3.5 All Loans to Constitute One Obligation................................... 13
3.6 Loan Account............................................................. 13
3.7 Statements of Account.................................................... 13
3.8 Sharing of Payments, Etc................................................. 13
3.9 Increased Costs; Taxes................................................... 14
3.10 Basis for Determining Interest Rate Inadequate or Unfair................. 17
Section 4. TERM AND TERMINATION..................................................... 17
4.1 Term of Agreement........................................................ 17
4.2 Termination.............................................................. 17
Section 5. SECURITY INTERESTS....................................................... 18
5.1 Security Interest in Collateral.......................................... 18
5.2 Other Collateral......................................................... 20
5.3 Lien Perfection; Further Assurances...................................... 20
5.4 Lien on Realty........................................................... 00
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Xxxxxxx 0. COLLATERAL ADMINISTRATION................................................ 21
6.1 General.................................................................. 21
6.2 Administration of Accounts............................................... 22
6.3 Records and Reports of Inventory, Machinery and Equipment................ 24
6.4 Administration of Equipment.............................................. 24
6.5 Appraisals............................................................... 24
6.6 Field Examinations. Agent shall conduct a field examination twice per
year or, if an Event of Default exists, more frequently at Agent's
discretion............................................................... 24
Section 7. REPRESENTATIONS AND WARRANTIES......................................... 25
7.1 General Representations and Warranties................................... 25
7.2 Continuous Nature of Representations and Warranties...................... 31
7.3 Survival of Representations and Warranties............................... 31
Section 8. COVENANTS AND CONTINUING AGREEMENTS................................... 31
8.1 Affirmative Covenants.................................................... 31
8.2 Negative Covenants....................................................... 36
8.3 Specific Financial Covenants............................................. 44
Section 9. CONDITIONS PRECEDENT..................................................... 44
9.1 Documentation............................................................ 45
9.2 No Default; Representations and Warranties............................... 45
9.3 Other Conditions......................................................... 45
9.4 Availability............................................................. 45
9.5 No Litigation............................................................ 45
9.6 Material Adverse Effect.................................................. 45
9.7 Cash Management System; Lockboxes........................................ 45
9.8 Lien Perfection; Title Insurance......................................... 45
9.9 Insurance................................................................ 46
9.10 Due Diligence............................................................ 46
9.11 Opinions................................................................. 46
9.12 Repayment of Indebtedness................................................ 46
Section 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT........................ 46
10.1 Events of Default........................................................ 46
10.2 Acceleration of the Obligations.......................................... 48
10.3 Other Remedies........................................................... 49
10.4 Set Off and Sharing of Payments.......................................... 50
10.5 Remedies Cumulative; No Waiver........................................... 51
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Section 11. THE AGENT................................................................ 51
11.1 Authorization and Action................................................. 51
11.2 Agent's Reliance, Etc.................................................... 52
11.3 Fleet and Affiliates..................................................... 52
11.4 Lender Credit Decision................................................... 53
11.5 Indemnification.......................................................... 53
11.6 Rights and Remedies to be Exercised by Agent Only........................ 53
11.7 Agency Provisions Relating to Collateral................................. 54
11.8 Agent's Right to Purchase Commitments.................................... 54
11.9 Right of Sale, Assignment, Participations................................ 55
11.10 Amendments............................................................... 56
11.11 Resignation of Agent; Appointment of Successor........................... 57
11.12 Co-Agents................................................................ 57
Section 12. MISCELLANEOUS............................................................ 57
12.1 Power of Attorney........................................................ 57
12.2 Indemnity................................................................ 58
12.3 Sale of Interest......................................................... 59
12.4 Severability............................................................. 59
12.5 Successors and Assigns................................................... 59
12.6 Cumulative Effect; Conflict of Terms..................................... 59
12.7 Execution in Counterparts................................................ 59
12.8 Notices.................................................................. 59
12.9 Consent.................................................................. 60
12.10 Credit Inquiries......................................................... 60
12.11 Time of Essence.......................................................... 60
12.12 Entire Agreement......................................................... 60
12.13 Interpretation........................................................... 60
12.14 Confidentiality.......................................................... 61
12.15 GOVERNING LAW; CONSENT TO FORUM.......................................... 61
12.16 WAIVERS BY BORROWER...................................................... 62
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of this 11th day of
February, 2002, by and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island
corporation with an office at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx,
Xxxxxxxxxx 00000, individually as a Lender and as Agent ("Agent") for itself and
any other financial institution which is or becomes a party hereto (each such
financial institution, including Fleet, is referred to hereinafter individually
as a "Lender" and collectively as the "Lenders"), the LENDERS and MOBILE MINI,
INC., a Delaware corporation with its chief executive office and principal place
of business at 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000
("Borrower"), BANK OF AMERICA, N.A. and WASHINGTON MUTUAL BANK, as
Co-Documentation Agents, and BANK ONE, NA and XX XXXXXX CHASE BANK, as
Co-Syndication Agents. Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms
not otherwise specifically defined herein shall be construed in accordance with
GAAP consistently applied.
Section 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a Total Credit Facility of up to
$250,000,000.00 available upon Borrower's request therefor, as follows:
1.1 Revolving Credit Facility.
1.1.1 Revolving Credit Loans. Each Lender agrees, severally
and not jointly, for so long as no Default or Event of Default exists and if the
conditions set forth in Section 9 are satisfied, to make Revolving Credit Loans
to Borrower from time to time during the period from the date hereof to but not
including the last day of the Term, as requested by Borrower in the manner set
forth in Subsection 3.1.1 hereof, up to a maximum principal amount at any time
outstanding equal to the lesser of (i) such Lender's Revolving Loan Commitment
minus such Lender's Revolving Loan Percentage of the sum of (x) the LC Amount
and (y) all unpaid LC Obligations and (ii) the product of such Lender's
Revolving Loan Percentage and an amount equal to the Borrowing Base at such time
minus the sum of (x) the LC Amount and (y) all unpaid LC Obligations minus the
Availability Reserve and minus other reserves, if any. In addition to the
Availability Reserve, Agent shall have the right to establish other reserves in
such amounts, and with respect to such matters, as Agent shall reasonably deem
necessary or appropriate in its reasonable credit judgment exercised in good
faith, against the amount of Revolving Credit Loans which Borrower may otherwise
request under this Subsection 1.1.1 with respect to (i) price adjustments,
damages, unearned discounts, returned products or other matters for which credit
memoranda are issued in the ordinary course of business of Borrower and its
Subsidiaries; (ii) shrinkage, spoilage and obsolescence of Inventory; (iii)
other sums chargeable against Borrower's Loan Account as Revolving Credit Loans
under any section of this Agreement; (iv) liabilities and clean up costs under
Environmental Laws; and (v) such other specific events, conditions or
contingencies as
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to which Agent, in its reasonable credit judgment exercised in good faith,
determines reserves should be established from time to time hereunder.
Notwithstanding the foregoing, Agent shall not establish any reserves in respect
of any matters relating to any items of Collateral that have been specifically
taken into account in determining eligibility of any category of assets or the
amount or value thereof for determining the Borrowing Base. The Revolving Credit
Loans shall be further evidenced by, and repayable in accordance with the terms
of, the Revolving Notes and shall be secured by all of the Collateral.
1.1.2 [intentionally omitted]
1.1.3 Use of Proceeds. The Revolving Credit Loans shall be
used solely for (i) the satisfaction of certain existing Indebtedness of
Borrower and its Subsidiaries, (ii) for general operating capital needs
(including Capital Expenditures) of Borrower and its Subsidiaries in a manner
consistent with the provisions of this Agreement and all applicable laws, and
(iii) for other purposes permitted under this Agreement.
1.2 Letters of Credit; LC Guaranties. Agent agrees, for so long as
no Default or Event of Default exists and if requested by Borrower, to (i) issue
its, or cause to be issued by Bank or another Affiliate of Agent, on the date
requested by Borrower, Letters of Credit for the account of Borrower or any
Guarantor or (ii) execute LC Guaranties by which Bank, or another Affiliate of
Bank, on the date requested by Borrower, shall guaranty the payment or
performance by Borrower of its reimbursement obligations with respect to Letters
of Credit and letters of credit issued with the prior approval of Agent for
Borrower's account by other Persons in support of Borrower's or any of its
Subsidiaries' obligations (other than obligations for the repayment of money
borrowed), provided that the sum of the LC Amount plus all unpaid LC Obligations
shall not exceed $5,000,000.00 at any time. No documentary Letter of Credit or
LC Guaranty of a documentary letter of credit may have an expiration date that
is more than 180 days after the date of issuance thereof and all such
documentary Letters of Credit shall be payable at sight; and no standby Letter
of Credit or LC Guaranty of a standby letter of credit may have an expiration
date that is more than one year from the date of issuance thereof, which
expiration date may be extended for additional periods of up to one year for
each additional period, subject to the immediately following sentence. No Letter
of Credit or LC Guaranty may have an expiration date that is after the last day
of the Term. Notwithstanding anything to the contrary contained herein,
Borrower, Agent and Lenders hereby agree that all LC Obligations and all
obligations of Borrower relating thereto shall be satisfied by the prompt
issuance of one or more Revolving Credit Loans that are Base Rate Portions,
which Borrower hereby acknowledges are requested and Lenders hereby agree to
fund. In the event that Revolving Credit Loans are not, for any reason, promptly
made to satisfy all then existing LC Obligations, each Lender hereby agrees to
pay to Agent, on demand, an amount equal to such LC Obligations multiplied by
such Lender's Revolving Loan Percentage, and until so paid, such amount shall be
secured by the Collateral and shall bear interest and be payable at the same
rate and in the same manner as Base Rate Portions. Immediately upon the issuance
of a Letter of Credit or an LC Guaranty under this Agreement, each Lender shall
be deemed to have irrevocably and unconditionally purchased and received from
Agent, without recourse or warranty, an undivided interest and participation
therein equal to such LC Obligations multiplied by such Lender's Revolving Loan
Percentage.
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Section 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest. Interest shall accrue on the
principal amount of the Base Rate Portions outstanding at the end of each day at
a fluctuating rate per annum equal to the Applicable Margin then in effect plus
the Base Rate. Said rate of interest shall increase or decrease by an amount
equal to any increase or decrease in the Base Rate, effective as of the opening
of business on the day that any such change in the Base Rate occurs. Interest
shall accrue on the principal amount of each of the LIBOR Advances outstanding
at the end of each day at a fixed rate per annum equal to the Applicable Margin
then in effect plus the LIBOR for the applicable Interest Period.
2.1.2 Default Rate of Interest. At the option of Agent or the
Majority Lenders, upon and after the occurrence of an Event of Default, and
during the continuation thereof, the principal amount of all Loans shall bear
interest at a rate per annum equal to 2.0% plus the interest rate otherwise
applicable thereto (the "Default Rate"). Such Default Rate shall apply
automatically in the case of a Default under Section 10.1.9.
2.1.3 Maximum Interest. In no event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under the Revolving Notes
and charged or collected pursuant to the terms of this Agreement or pursuant to
the Revolving Notes exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. If any provisions of this Agreement or the Revolving Notes are in
contravention of any such law, such provisions shall be deemed amended to
conform thereto.
2.2 Computation of Interest and Fees. Interest, Letter of Credit and
LC Guaranty fees and Unused Line Fees hereunder shall be calculated daily and
shall be computed on the actual number of days elapsed over a year of 360 days.
2.3 Fee Letter. Borrower shall pay to Agent certain fees and other
amounts in accordance with the terms of the fee letter between Borrower and
Agent (the "Fee Letter").
2.4 Letter of Credit and LC Guaranty Fees. Borrower shall pay to
Agent, for the ratable benefit of the Lenders, a fee equal to the Applicable
Margin then in effect for LIBOR Advances per annum multiplied by the aggregate
face amount of all Letters of Credit and LC Guaranties outstanding from time to
time during the term of this Agreement, which fees shall be payable monthly in
arrears on the first day of each month hereafter, and, in the case of standby
and documentary Letters of Credit (and the related LC Guaranties) all normal and
customary charges of Bank associated with the issuance of such Letters of Credit
and LC Guaranties for the account of borrowers with creditworthiness similar to
Borrower's, which fees and charges shall be deemed fully earned and shall be due
and payable upon issuance of each such Letter of Credit or LC Guaranty and shall
not be subject to rebate or proration upon the termination of this Agreement for
any reason. At the option of Agent or the Majority Lenders, upon and after the
occurrence of an Event of Default, and during the continuation
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thereof, the fee shall increase to the Applicable Margin then in effect for
LIBOR Advances per annum plus two percent (2%) multiplied by the aggregate face
amount of all Letters of Credit and LC Guaranties outstanding at such time.
2.5 Unused Line Fee.
Borrower shall pay to Agent, for the ratable benefit of the
Lenders, a fee (the "Unused Line Fee") equal to 0.375% per annum multiplied by
the average daily amount by which the Total Credit Facility exceeds the sum of
the outstanding principal balance of the Revolving Credit Loans and Swing Line
Loans plus the LC Amount. The Unused Line Fee shall be payable monthly in
arrears on the first day of each month hereafter.
2.6 [intentionally omitted]
2.7 Audit Fees.
Borrower shall pay to Agent all reasonable out-of-pocket
expenses incurred by Agent in connection with audits of the books and records
and Properties of Borrower and its Subsidiaries and Affiliates and such other
matters as Agent shall deem appropriate in its reasonable credit judgment,
whether such audits are conducted by employees of Agent or by third parties
hired by Agent. Agent shall use commercially reasonable efforts to cause such
audits to be conducted by its own employees whenever feasible. The out-of-pocket
expenses incurred in connection with the audits shall be payable on the first
day of the month following the date of issuance by Agent of a request for
payment thereof to Borrower.
2.8 Reimbursement of Expenses.
If, at any time or times regardless of whether or not an Event
of Default then exists, (i) Agent incurs legal or accounting expenses or any
other costs or out-of-pocket expenses in connection with (1) the negotiation and
preparation of this Agreement or any of the other Loan Documents, any amendment
of or modification of this Agreement or any of the other Loan Documents, or any
sale or attempted sale of any interest herein to any assignee (including,
without limitation, printing and distribution of materials to prospective
Lenders and all costs associated with bank meetings, but excluding any closing
fees paid to Lenders in connection therewith) or (2) the administration of this
Agreement or any of the other Loan Documents and the transactions contemplated
hereby and thereby; or (ii) Agent or any Lender incurs legal or accounting
expenses or any other costs or out-of-pocket expenses in connection with (1) any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Agent, any Lender, Borrower or any other Person) relating to the Collateral,
this Agreement or any of the other Loan Documents or Borrower's, any of its
Subsidiaries' or any Guarantor's affairs; (2) any attempt to enforce any rights
of Agent or any Lender against Borrower, any Guarantor or any other Person which
may be obligated to Agent or any Lender by virtue of this Agreement or any of
the other Loan Documents, including, without limitation, the Account Debtors; or
(3) after the occurrence of an Event of Default and during the continuance
thereof, any attempt to inspect, verify, protect, preserve, restore, collect,
sell, liquidate or otherwise dispose of or realize upon the Collateral; then all
such legal and
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accounting expenses (including allocated costs of in-house counsel in lieu of
outside counsel), other costs and out of pocket expenses of Agent or (in the
case of clause (ii) only) any Lender, as applicable, shall be charged to
Borrower; provided, that Borrower shall not be responsible for such costs and
out-of-pocket expenses of any Person to the extent incurred because of the gross
negligence or willful misconduct of such Person. Borrower shall also reimburse
Agent for expenses incurred by Agent in its administration of the Collateral to
the extent and in the manner provided in Section 2.10 hereof.
2.9 Bank Charges. Borrower shall pay to Agent any and all fees,
costs or expenses which Agent pays to a bank or other similar institution
arising out of or in connection with (i) the forwarding to Borrower or any other
Person on behalf of Borrower by Agent of proceeds of Loans made to Borrower
pursuant to this Agreement and (ii) the depositing for collection by Agent of
any check or item of payment received or delivered to Agent on account of the
Obligations.
2.10 Collateral Protection Expenses. All out-of-pocket expenses
incurred in protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral, any and all excise, property, sales, and use taxes
imposed by any state, federal, or local authority on any of the Collateral or in
respect of the sale thereof shall be borne and paid by Borrower. If Borrower
fails to promptly pay any portion thereof when due, Agent may, at its option,
but shall not be required to, pay the same and charge Borrower therefor.
2.11 Payment of Charges. All amounts chargeable to Borrower under
this Agreement shall be Obligations secured by all of the Collateral, shall be,
unless specifically otherwise provided, payable on demand and shall bear
interest from the date demand was made or such amount is due, as applicable,
until paid in full at the rate applicable to Base Rate Portions from time to
time.
SECTION 3. LOAN ADMINISTRATION.
3.1 Manner of Borrowing Revolving Credit Loans; Swing Line Loan.
Borrowings under the credit facility established pursuant to Section 1 hereof
shall be as follows:
3.1.1 Loan Requests. A request for a Revolving Credit Loan
shall be made, or shall be deemed to be made, in the following manner: (i)
Borrower may give Agent notice of its intention to borrow, in which notice
Borrower shall specify the amount of the proposed borrowing and the proposed
borrowing date, no later than 10:00 a.m. Los Angeles time on the proposed
borrowing date (or in accordance with Section 3.1.5 in the case of a request for
a LIBOR Advance), provided, however, that no such request may be made at a time
when there exists a Default or an Event of Default or other conditions set forth
in Section 9 are not satisfied; and (ii) the becoming due of any amount required
to be paid under this Agreement, or the Revolving Notes, whether as interest or
for any other Obligation, shall be deemed irrevocably to be a request for a
Revolving Credit Loan on the due date in the amount required to pay such
interest or other Obligation.
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3.1.2 Disbursement. Borrower hereby irrevocably authorizes
Agent to disburse the proceeds of each Revolving Credit Loan requested, or
deemed to be requested, pursuant to Subsection 3.1.1 as follows: (i) the
proceeds of each Revolving Credit Loan requested under Subsection 3.1.1 and each
Swing Line Loan shall be disbursed by Agent in lawful money of the United States
of America in immediately available funds, in the case of the initial borrowing,
in accordance with the terms of the written disbursement letter from Borrower,
and in the case of each subsequent borrowing, by wire transfer to such bank
account as may be agreed upon by Borrower and Agent from time to time or
elsewhere if pursuant to a written direction from Borrower; and (ii) the
proceeds of each Revolving Credit Loan deemed requested under Subsection
3.1.1(ii) shall be disbursed by Agent by way of direct payment of the relevant
interest or other Obligation.
3.1.3 Payment by Lenders. Unless Agent elects to make a Swing
Line Loan in accordance with Subsection 3.1.11, Agent shall give to each Lender
prompt written notice electronically or by facsimile, or telecopy of the receipt
by Agent from Borrower of any request for a Revolving Credit Loan. Each such
notice shall specify the requested date and amount of such Revolving Credit
Loan, whether such Revolving Credit Loan shall be a LIBOR Advance, and the
amount of each Lender's advance thereunder (in accordance with its applicable
Revolving Loan Percentage). If Agent gives notice, electronically or facsimile,
to a Lender by noon (Los Angeles time), each Lender shall, not later than 1:00
p.m. (Los Angeles time) on such requested date (or on the next Business Day if
Agent gives later notice), wire to a bank designated by Agent the amount of that
Lender's Revolving Loan Percentage of the requested Revolving Credit Loan. The
failure of any Lender to make the Revolving Credit Loans to be made by it shall
not release any other Lender of its obligations hereunder to make its Revolving
Credit Loan. Neither Agent nor any other Lender shall be responsible for the
failure of any other Lender to make the Revolving Credit Loan to be made by such
other Lender. The foregoing notwithstanding, Agent, in its sole discretion, may
from its own funds make a Revolving Credit Loan on behalf of any Lender. In such
event, the Lender on behalf of whom Agent made the Revolving Credit Loan shall
reimburse Agent for the amount of such Revolving Credit Loan made on its behalf
on the next Business Day. The entire amount of interest attributable to such
Revolving Credit Loan for the period from the date on which such Revolving
Credit Loan was made by Agent on such Lender's behalf until Agent is reimbursed
by such Lender, shall be paid to Agent for its own account.
3.1.4 Authorization. Borrower hereby irrevocably authorizes
Agent to advance to Borrower, and to charge to Borrower's Loan Account hereunder
as a Revolving Credit Loan, a sum sufficient to pay all interest accrued on the
Obligations during the immediately preceding month and to pay all fees, costs
and expenses and other Obligations at any time owed by Borrower to Agent or any
Lender hereunder.
3.1.5 LIBOR Advances. Notwithstanding the provisions of
Subsection 3.1.1, in the event Borrower desires to obtain a LIBOR Advance,
Borrower shall give Agent prior, written, irrevocable notice no later than 10:00
a.m. Los Angeles time on the 3rd Business Day prior to the requested borrowing
date specifying (i) Borrower's election to obtain a LIBOR Advance, (ii) the date
of the proposed borrowing (which shall be a Business Day) and (iii) the amount
to be borrowed, which amount shall be in a minimum principal
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amount of $2,000,000 and may increase in integral multiples of $100,000. In no
event shall Borrower be permitted to have outstanding at any one time LIBOR
Advances with more than eight (8) different Interest Periods.
3.1.6 Conversion of Base Rate Advances. Provided that no
Default or Event of Default has occurred which is then continuing, Borrower may,
on any Business Day, convert any Revolving Credit Loan which is a Base Rate
Advance into a LIBOR Advance. If Borrower desires to convert such a Base Rate
Advance, Borrower shall give Agent not less than three (3) Business Days' prior
written notice (prior to 10:00 a.m Los Angeles time on such Business Day),
specifying the date of such conversion and the amount to be converted. Each
conversion into or conversion of a LIBOR Advance shall be in a minimum principal
amount of $2,000,000 and may increase in integral multiples of $100,000 in
excess thereof; provided that only two (2) Business Days' notice shall be
required to convert the Loans made on the Closing Date. After giving effect to
any conversion of Base Rate Advances to LIBOR Advances, Borrower shall not be
permitted to have outstanding at any one time LIBOR Advances with more than
eight (8) different Interest Periods.
3.1.7 Continuation of LIBOR Advances. Borrower shall have the
right on three (3) Business Days' prior irrevocable written notice given to
Agent by Borrower (prior to 10:00 a.m. Los Angeles time on such Business Day),
subject to the provisions hereof, to continue any LIBOR Advance 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) in the case of a continuation of less than
all LIBOR Advances, the LIBOR Advances continued shall each be
in a minimum principal amount of $2,000,000 and may increase in
integral multiples of $100,000; and
(ii) no LIBOR Advance (or portion thereof) may
be continued as a LIBOR Advance if a Default or Event of Default
has occurred which is then continuing or if, after giving effect
to such continuation, Borrower shall have outstanding more than
eight (8) separate LIBOR Advances in the aggregate.
If Borrower shall fail to give timely notice of its election to
continue any LIBOR Advance or portion thereof as provided above, or if such
continuation shall not be permitted, such LIBOR Advance or portion thereof,
unless such LIBOR Advance shall be repaid, shall automatically be converted into
a Base Rate Advance at the end of the Interest Period then in effect with
respect to such LIBOR Advance.
3.1.8 Inability to Make LIBOR Advances. Notwithstanding any
other provision hereof, if any (i) change in applicable law, treaty, regulation
or directive, or any change in the interpretation or application thereof, shall
make it unlawful for any Lender (for purposes of this Subsection 3.1.8, the term
"Lender" shall include the office or branch where a Lender or any corporation or
bank then controlling such Lender makes or maintains any LIBOR Advances) to make
or maintain its LIBOR Advances, or (ii) if with respect to any
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Interest Period, Agent is unable to determine the LIBOR relating thereto, or
(iii) adverse or unusual conditions in, or changes in applicable law relating
to, the London interbank market make it, in the reasonable judgment of a Lender,
impracticable to fund therein any of the LIBOR Advances, or (iv) if Majority
Lenders shall, at least one Business Day before the requested date of any
Borrowing hereunder, notify Agent that the projected LIBOR is unreflective of
the actual costs of funds therefor to such Lenders, the obligation of the
affected Lender (or in the case of clauses (ii) and (iv), all Lenders) to make
LIBOR Advances hereunder shall forthwith be suspended during the pendency of
such circumstances and Borrower shall, if any affected LIBOR Advances are then
outstanding, promptly upon request from such Lender, convert such affected LIBOR
Advances into Base Rate Advances; provided, that if Borrower receives a notice
pursuant to clauses (iii) or (iv), so long as no Default or Event of Default
shall have occurred and be continuing and Borrower has obtained a commitment
from another Lender or other financial institution, acceptable to Agent in its
reasonable discretion, to become a Lender for all purposes under this Agreement
and to assume all obligations of the Lender to be replaced, at any time after
receipt of such notice and while the circumstances causing LIBOR not to be
available, Borrower may require the Lender giving such notice to assign all of
its Loans, Revolving Loan Commitments and other Obligations to such other Lender
or financial institution pursuant to the provisions of Subsection 11.9; provided
further that, prior to or concurrently with such replacement (x) Borrower has
paid to the Lender giving such notice all principal, interest, fees and other
amounts due and owing to such Lender through such date of replacement, (y) Agent
has received the processing and recordation fee required to be paid by
Subsection 11.9.1, and (z) all of the requirements for such assignment contained
in Subsection 11.9, including, without limitation, the receipt by Agent of an
executed assignment and assumption agreement and other supporting documents,
have been fulfilled.
3.1.9 Letter of Credit and LC Guaranty Requests. A request for
a Letter of Credit or LC Guaranty shall be made in the following manner:
Borrower may give Agent and Bank a written notice of its request for the
issuance of a Letter of Credit or LC Guaranty, not later than 10:00 a.m. Los
Angeles time, one Business Day before the proposed issuance date thereof, in
which notice Borrower shall specify the proposed issuer, issuance date and
format and wording for the Letter of Credit or LC Guaranty being requested
(which shall be satisfactory to Agent and the Person being asked to issue such
Letter of Credit or LC Guaranty); provided, that no such request may be made at
a time when there exists a Default or Event of Default or other conditions set
forth in Section 9 are not satisfied. Such request shall be accompanied by an
executed application and reimbursement agreement in form and substance
satisfactory to Agent and the Person being asked to issue the Letter of Credit
or LC Guaranty, as well as any required resolutions.
3.1.10 Method of Making Requests. As an accommodation to
Borrower, unless a Default or an Event of Default is then in existence, (i)
Agent shall permit telephonic requests for Revolving Credit Loans to Agent, (ii)
Agent and Bank may, in their discretion, permit electronic transmittal of
requests for Letters of Credit and LC Guaranties to them, and (iii) Agent may,
in Agent's discretion, permit electronic transmittal of instructions,
authorizations, agreements or reports to Agent. Unless Borrower specifically
directs Agent or Bank in writing not to accept or act upon telephonic or
electronic communications from
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Borrower, neither Agent nor Bank nor any Lender shall have any liability to
Borrower for any loss or damage suffered by Borrower as a result of Agent's or
Bank's honoring of any requests, execution of any instructions, authorizations
or agreements or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Agent or Bank by an
authorized officer of Borrower, and neither Agent nor Bank shall have any duty
to verify the origin of any such communication or the authority of the person
sending it. Each telephonic request for a Revolving Credit Loan, Letter of
Credit or LC Guaranty accepted by Agent and Bank, if applicable, hereunder shall
be promptly followed by a written confirmation of such request from Borrower to
Agent and Bank, if applicable.
3.1.11 Swing Line Loans; Settlement Procedures. In order to
facilitate the administration of the Revolving Credit Loans, notwithstanding the
provisions of Subsection 3.1.3, Agent may make Revolving Credit Loans on behalf
of the Lenders (each, a "Swing Line Loan"); provided that the Agent shall not
make any Swing Line Loan if the aggregate outstanding principal amount of all
Swing Line Loans (taking into account the Loan to be made and any repayments
received on such date) would exceed $5,000,000, and settlement will be made
among the Lenders and the Agent in accordance with this Subsection 3.1.11. Each
Lender's obligation to fund its Revolving Loan Percentage of each Swing Line
Loan shall commence on the date on which such Swing Line Loan is made by Agent,
and each Lender shall be deemed to have irrevocably and unconditionally
purchased a participation in such Swing Line Loan in an amount equal to its
Revolving Credit Percentage of the Swing Line Loan. All Swing Line Loans shall
be Base Rate Advances, and interest accrued on the Swing Line Loans shall be for
the account of the Agent until settlement is made in accordance with this
Section. Settlement shall be made on the date (each, a "Settlement Date") which
is the earlier to occur of (i) each Thursday (or the next Business Day, if
Thursday is not a Business Day) and (ii) the date on which the outstanding
balance of the Swing Line Loans shall have increased or decreased since the last
Settlement Date by $5,000,000 or more, or more frequently if Agent elects. Agent
will advise each Lender electronically or by telephone, facsimile or telecopy of
its Revolving Loan Percentage of the Swing Line Loans, and in the event that
payments are necessary to be made so that each Lender has funded Revolving
Credit Loans equal to its Revolving Loan Percentage of all outstanding Revolving
Credit Loans, each Lender shall transfer such amount to Agent, or Agent shall
transfer such amount to each Lender, in immediately available funds no later
than 1 p.m. (Los Angeles time) on the Settlement Date if Agent has delivered
notice prior to noon (Los Angeles time) on the Settlement Date or by 1:00 p.m.
(Los Angeles time) on the next Business Day if notice is given later.
Settlements shall be made whether or not any Default or Event of Default exists
and whether or not the conditions to Revolving Credit Loans have been met;
provided however, that notwithstanding the foregoing, a Lender shall not have
any obligation to acquire a participation in a Swing Line Loan pursuant to this
Section 3.1.11 if a Default or Event of Default existed or any conditions
precedent to making Loans were not satisfied at the time such Swing Line Loan
was made and such Lender shall have notified the Agent in writing, at least one
Business Day prior to the time such Swing Line Loan was made, that the foregoing
circumstances existed and that such Lender would not acquire participations in
Swing Line Loans made while such circumstances continued. If any Lender fails to
fund any amount due to Agent under this Section on the Settlement Date, Agent
shall be entitled to recover such
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amount on demand from such Lender, together with interest thereon at the
interest rate then applicable to the Revolving Credit Loans. All payments made
by the Lenders under this Section 3.1.11 shall be deemed to be Revolving Credit
Loans made to Borrower in accordance with this Agreement.
3.2 Payments. Except where evidenced by notes or other instruments
issued or made by Borrower to any Lender and accepted by such Lender
specifically containing payment instructions that are in conflict with this
Section 3.2 (in which case the conflicting provisions of said notes or other
instruments shall govern and control), the Obligations shall be payable, without
setoff or counter-claim, as follows:
3.2.1 Principal. Principal payable on account of Revolving
Credit Loans shall be payable by Borrower to Agent for the ratable benefit of
Lenders immediately upon the earliest of (i) the receipt by Agent or Borrower of
any proceeds of any of the Collateral (except as otherwise provided herein),
including without limitation pursuant to Subsections 3.3.1 and 6.2.4, to the
extent of said proceeds, subject to Borrower's rights to reborrow such amounts
in compliance with Subsection 1.1.1 hereof; (ii) the occurrence of an Event of
Default in consequence of which Agent or Majority Lenders elect to accelerate
the maturity and payment of the Obligations, or (iii) termination of this
Agreement pursuant to Section 4 hereof; provided, however, that, if an
Overadvance shall exist at any time, Borrower shall immediately repay the
Overadvance. Each payment (including principal prepayments) by Borrower on
account of principal of the Revolving Credit Loans shall be applied first to
Base Rate Advances, then to LIBOR Advances, subject to Subsection 3.3.5 hereof.
If any amounts collected by Agent exceed the Revolving Credit Loans outstanding
(including any amounts charged to Borrower under this Agreement), such amounts
shall be disbursed to Borrower or at its written direction.
3.2.2 Interest.
(a) Base Rate Advances. Interest accrued on Base Rate
Advances shall be due and payable on the earliest of (1) the first
calendar day of each month (for the immediately preceding month),
computed through the last calendar day of the preceding month, (2) the
occurrence of an Event of Default in consequence of which Agent or
Majority Lenders elect to accelerate the maturity and payment of the
Obligations or (3) termination of this Agreement pursuant to Section 4
hereof.
(b) LIBOR Advances. Interest accrued on each LIBOR
Advance shall be due and payable on each LIBOR Interest Payment Date and
on the earliest of (1) the occurrence of an Event of Default in
consequence of which Agent or Majority Lenders elect to accelerate the
maturity and payment of the Obligations or (2) termination of this
Agreement pursuant to Section 4 hereof.
3.2.3 Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be payable by Borrower to Agent, as and when
provided in Section 2 hereof or to any other Person designated by Agent in
writing.
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3.2.4 Other Obligations. The balance of the Obligations
requiring the payment of money, if any, shall be payable by Borrower to Agent
for distribution to Lenders, as appropriate, as and when provided in this
Agreement, the Other Agreements or the Security Documents, or if not so
provided, on demand.
3.2.5 Prepayment of LIBOR Advances. Borrower may prepay a
LIBOR Advance only on the last day of the Interest Period for such LIBOR
Advance. If Borrower shall nonetheless pay or repay a LIBOR Advance on any other
date, Borrower shall pay to Agent, upon request of Agent, such amount or amounts
as shall be sufficient (in the reasonable opinion of Agent) to compensate
Lenders for any loss, cost, or expense incurred as a result of: (i) any payment
of a LIBOR Advance on a date other than the last day of the Interest Period for
such Loan; (ii) any failure by Borrower to borrow a LIBOR Advance on the date
specified by Borrower's written notice; or (iii) any failure by Borrower to pay
a LIBOR Advance on the date for payment specified in Borrower's written notice.
Without limiting the foregoing, Borrower shall pay to Agent, for the ratable
benefit of Lenders (other than any Lender who waives such provision), a "yield
maintenance fee" in an amount computed as follows: the current LIBOR shall be
subtracted from the LIBOR in effect at the time of prepayment. If the result is
zero or a negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall be multiplied
by the amount of the principal balance being prepaid. The resulting amount shall
be divided by 360 and multiplied by the number of days remaining in the Interest
Period chosen pursuant to the LIBOR Advance as to which the prepayment is made.
Said amount shall be reduced to present value. The resulting amount shall be the
yield maintenance fee due to Agent, for the ratable benefit of Lenders, upon the
payment of a LIBOR Advance. If by reason of an Event of Default, Agent or
Majority Lenders elect to declare the Obligations to be immediately due and
payable, then any yield maintenance fee with respect to a LIBOR Advance shall
become due and payable in the same manner as though Borrower had exercised such
right of prepayment.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of
Collateral. Except as provided in Subsection 8.2.5(i), if Borrower or any of its
Subsidiaries sells any of the Equipment or real Property, or if a Casualty Loss
occurs with respect to any of the Collateral, Borrower shall, unless otherwise
agreed by Majority Lenders, pay to Agent for the ratable benefit of Lenders as
and when received by Borrower or such Subsidiary and as a mandatory prepayment
of the Loans, as herein provided, a sum equal to the proceeds (including
insurance payments and condemnation awards but net of costs and taxes incurred
in connection with such sale or event) ("Sale Proceeds") received by Borrower or
such Subsidiary from such sale or Casualty Loss. The applicable prepayment shall
be applied to reduce the outstanding principal balance of the Revolving Credit
Loans, but shall not permanently reduce the Revolving Loan Commitments; provided
that any sale or Casualty Loss of Inventory, Equipment or Specified Real
Property shall reduce the Borrowing Base to the extent of the value of the
applicable Property. Such reduction shall be effective on the date of
consummation of the sale or receipt of proceeds of a Casualty Loss if the Sale
Proceeds are equal to or greater than five percent (5%) of Availability on such
date (without
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giving effect to the application of the Sale Proceeds) and otherwise as of the
date on which Borrower delivers its new Borrowing Base Certificate pursuant to
subsection 8.1.4
3.3.2 [intentionally omitted]
3.3.3 Proceeds from Issuance of Additional Indebtedness or
Equity. If Borrower or any Subsidiary issues any additional Indebtedness (other
than intercompany Indebtedness) or obtains any additional equity in a manner
permitted under this Agreement, Borrower shall pay to Agent for the ratable
benefit of Lenders, when and as received by any Borrower and as a mandatory
prepayment of the Obligations, a sum equal to 100% of the net cash proceeds to
Borrower or such Subsidiary of the issuance of such Indebtedness or equity. Any
such prepayment shall be applied to reduce the outstanding principal balance of
the Revolving Credit Loans, but shall not permanently reduce the Revolving Loan
Commitments.
3.3.4 [intentionally omitted]
3.3.5 LIBOR Advances. If the application of any payment made
in accordance with the provisions of this Section 3.3 at a time when no Event of
Default has occurred and is continuing would result in termination of a LIBOR
Advance prior to the last day of the Interest Period for such LIBOR Advance, the
amount of such prepayment shall not be applied to such LIBOR Advance, but will,
at Borrower's option, be deposited by Borrower in an interest bearing account at
Bank or another bank satisfactory to Agent in its discretion, which account is
in the name of Borrower and under the control of Agent and from which account
only Agent can make any withdrawal, in each case to be applied as such amount
would otherwise have been applied under this Section 3.3 at the earlier to occur
of (i) the last day of the relevant Interest Period or (ii) the occurrence of a
Default or an Event of Default.
3.3.6 [intentionally omitted]
3.3.7 Optional Reductions of Revolving Loan Commitments.
Borrower may, at its option from time to time upon not less than 3 Business
Days' prior written notice to Agent, terminate in whole or permanently reduce
ratably in part, the unused portion of the Revolving Loan Commitments, provided,
however, that (i) each such partial reduction shall be in an amount of
$5,000,000 or integral multiples of $1,000,000 in excess thereof and (ii) the
aggregate of all optional reductions to the Revolving Loan Commitments may not
exceed $25,000,000 during any 12 month period or $100,000,000 during the Term.
Except for charges under Subsection 3.2.5 applicable to prepayments of LIBOR
Advances, such prepayments shall be without premium or penalty, but Borrower
shall repay the Loans (or provide cash collateral for the LC Amount) to the
extent that the sum of the outstanding principal amount of the Revolving Credit
Loans, the LC Amount and all unpaid LC Obligations exceeds the Revolving Loan
Commitments as so reduced.
3.4 Application of Payments and Collections. All items of payment
received by Agent by 12:00 noon, Los Angeles time, on any Business Day shall be
deemed received on that Business Day. All items of payment received after 12:00
noon, Los Angeles time, on any Business Day shall be deemed received on the
following Business Day. Borrower irrevocably
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waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by Agent from or on behalf
of Borrower or any Guarantor, and Borrower does hereby irrevocably agree that
Agent shall have the continuing exclusive right to apply and reapply any and all
such payments and collections received at any time or times hereafter by Agent
or its agent against the Obligations, in such manner as Agent may deem
advisable, notwithstanding any entry by Agent or any Lender upon any of its
books and records. If as the result of collections of Accounts as authorized by
Subsection 6.2.4 hereof or otherwise, a credit balance exists in the Loan
Account, such credit balance shall not accrue interest in favor of Borrower, but
shall be disbursed to Borrower or otherwise at Borrower's direction in the
manner set forth in Subsection 3.1.2, upon Borrower's request at any time, so
long as no Default or Event of Default then exists. Agent may at its option,
offset such credit balance against any of the Obligations upon and during the
continuance of an Event of Default.
3.5 All Loans to Constitute One Obligation. The Loans shall
constitute one general Obligation of Borrower, and shall be secured by Agent's
Lien for the benefit of the Agent and the ratable benefit of the Lenders upon
all of the Collateral.
3.6 Loan Account. Agent shall enter all Loans as debits to a loan
account (the "Loan Account") and shall also record in the Loan Account all
payments made by Borrower on any Obligations and all proceeds of Collateral
which are finally paid to Agent, and may record therein, in accordance with
customary accounting practice, other debits and credits, including interest and
all charges and expenses properly chargeable to Borrower pursuant to this
Agreement or any other Loan Document.
3.7 Statements of Account. Agent will account to Borrower monthly
with a statement of Loans, charges and payments made pursuant to this Agreement
during the immediately preceding month, and such account rendered by Agent shall
be deemed final, binding and conclusive upon Borrower absent demonstrable error
unless Agent is notified by Borrower in writing to the contrary within 30 days
of the date each accounting is received by Borrower. Such notice shall only be
deemed an objection to those items specifically objected to therein.
3.8 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of any Loan made by it in excess of its ratable share
of payments on account of Loans made by all Lenders, such Lender shall forthwith
purchase from each other Lender such participation in such Loan as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each other Lender; provided, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lenders the purchase price to the extent of such recovery, together with an
amount equal to such Lender's ratable share (according to the proportion of (i)
the amount of such Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid
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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 3.8 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
Borrower in the amount of such participation. Notwithstanding anything to the
contrary contained herein, all purchases and repayments to be made under this
Section 3.8 shall be made through Agent.
3.9 Increased Costs; Taxes.
3.9.1 Increased Costs. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which any Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
governmental authority charged with the interpretation or application thereof,
or the compliance of such Lender therewith, shall:
(1) subject such Lender to any tax with
respect to this Agreement (other than (a) any tax based on or
measured by net income or otherwise in the nature of a net
income tax, including, without limitation, any franchise tax or
any similar tax based on capital, net worth or comparable basis
for measurement and (b) any tax collected by a withholding on
payments and which neither is computed by reference to the net
income of the payee nor is in the nature of an advance
collection of a tax based on or measured by the net income of
the payee) or (2) change the basis of taxation of payments to
such Lender of principal, fees, interest or any other amount
payable hereunder or under any Loan Documents (other than in
respect of (a) any tax based on or measured by net income or
otherwise in the nature of a net income tax, including, without
limitation, any franchise tax or any similar tax based on
capital, net worth or comparable basis for measurement and (b)
any tax collected by a withholding on payments and which neither
is computed by reference to the net income of the payee nor is
in the nature of an advance collection of a tax based on or
measured by the net income of the payee);
(2) impose, modify or hold applicable any
reserve (except any reserve taken into account in the
determination of the applicable LIBOR), special deposit,
assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or
other credit extended by, any office of such Lender, including
(without limitation) pursuant to Regulation D of the Board of
Governors of the Federal Reserve System; or
(3) impose on such Lender or the London
interbank market any other condition with respect to any Loan
Document; or
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(4) impose on such Lender any capital
requirements.
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining its Loans hereunder by an amount that such
Lender deems to be material or to reduce the amount of any payment (whether of
principal, interest or otherwise) in respect of any of such Loans by an amount
that such Lender deems to be material, or reduces the rate of return on such
Lender's capital as a result of its obligations hereunder by an amount such
Lender deems to be material, then, in any such case, Borrower shall pay such
Lender, upon demand and certification not later than six months following its
receipt of notice of the imposition of such increased costs or such reduced
return, such additional amount as will compensate such Lender for such
additional cost or such reduction, as the case may be, to the extent such Lender
has not otherwise been compensated, with respect to a particular Loan, for such
increased cost or such reduced return as a result of an increase in the Base
Rate or the LIBOR. An officer of such Lender shall determine the amount of such
additional cost or reduced amount using reasonable averaging and attribution
methods and shall certify the amount of such additional cost or reduced amount
to Borrower, which certification shall include a written explanation of such
additional cost or reduction to Borrower. Such certification shall be conclusive
absent manifest error. If such Lender claims any additional cost or reduced
amount pursuant to this Subsection 3.9.1, then such Lender shall use reasonable
efforts (consistent with legal and regulatory restrictions) to designate a
different lending office or to file any certificate or document reasonably
requested by Borrower if the making of such designation or filing would avoid
the need for, or reduce the amount of, any such additional cost or reduced
amount and would not, in the sole discretion of such Lender, be otherwise
disadvantageous to such Lender.
3.9.2 Net Payments. (a) All payments by Borrower hereunder to
or for the benefit of any Lender or the Agent shall be made without setoff,
counterclaim or other defense. Except as provided in Subsection 3.9.2 (b) below,
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments, or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding any tax imposed on or
measured by the net income or profits of the Lender or the Agent, as the case
may be, pursuant to the laws of the jurisdiction in which it is organized)
together with all interest, penalties or similar liabilities with respect
thereto (collectively, "Covered Taxes"). If Borrower shall be required by law to
deduct any Covered Taxes from any sum payable hereunder to any Lender or the
Agent, (A) the sum payable shall be increased as may be necessary so that after
making all required deductions of Covered Taxes (including deductions of Covered
Taxes applicable to additional sums payable under this Section such Lender or
the Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (B) Borrower shall make such
deductions and (C) Borrower shall pay the full amount so deducted to the
relevant taxation authority or other authority in accordance with applicable
law. Borrower shall furnish to the Agent within 45 days after the date the
payment of any Covered Taxes is due certified copies of tax receipts evidencing
such payment by Borrower. Borrower agrees to indemnify and hold harmless the
Lenders and the Agent and reimburse
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each of them, as the case may be, for the amount of any Covered Taxes so levied
or imposed and paid by them.
(b) Each Lender which is organized under the laws of a
jurisdiction other than the United States or any State thereof (a "Foreign
Lender") shall deliver to Agent and Borrower (i) two valid, duly completed
copies of IRS Form W-8ECI and W-8BEN or successor applicable form, as the case
may be, and any other required form, certifying in each case that such Foreign
Lender is entitled to receive payments under this Agreement and the Revolving
Loan Notes payable to it without deduction or withholding of any United States
federal income taxes or with such withholding imposed at a reduced rate (the
"Reduced Rate"), or (ii) a valid, duly completed IRS Form W-8 or W-9 or
successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Each such Lender shall also deliver to
Agent and Borrower two further copies of said Form W-8ECI or W-8BEN and W-8 or
W-9, or successor applicable forms, or other manner of required certification,
as the case may be, on or before the date that any such form expires or becomes
obsolete or otherwise is required to be resubmitted as a condition to obtaining
an exemption from a required withholding of United States federal income tax or
entitlement to having such withholding imposed at the Reduced Rate or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to Borrower and Agent, and such extensions or renewals thereof
as may reasonably be requested by Borrower and Agent, certifying (i) in the case
of a Form W-8ECI or W-8BEN that such Lender is entitled to receive payments
under this Agreement and the Revolving Loan Notes payable to it without
deduction or withholding of any United States federal income taxes, unless in
any such case any change in a tax treaty to which the United States is a party,
or any change in law or regulation of the United States or official
interpretation thereof has occurred after the Closing Date and prior to the date
on which any such delivery would otherwise be required that renders all such
forms inapplicable or that would prevent such Foreign Lender from duly
completing and delivering any such form with respect to it, and such Foreign
Lender advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding at the Reduced Rate, or (ii) in
the case of a Form W-8 or W-9, establishing an exemption from United States
backup withholding tax.
3.9.3 Affected Lenders. If Borrower receives a demand for
payments under this Section 3.9, so long as no Default or Event of Default shall
have occurred and be continuing and Borrower has obtained a commitment from
another Lender or other financial institution, acceptable to Agent in its
reasonable discretion, to become a Lender for all purposes under this Agreement
and to assume all obligations of the Lender to be replaced, at any time after
receipt of such demand for payments and while the circumstances causing LIBOR
not to be available continue, Borrower may require the Lender giving such notice
to assign all of its Loans, Revolving Loan Commitments and other Obligations to
such other Lender or financial institution pursuant to the provisions of
Subsection 11.9; provided that, prior to or concurrently with such replacement
(i) Borrower has paid to the Lender giving such demand for payments all
principal, interest, fees and other amounts due and owing to such Lender through
such date of replacement, (ii) Agent has received the processing and recordation
fee required to be paid by Subsection 11.9.1, and (iii) all of the requirements
for such assignment contained in Subsection 11.9, including, without limitation,
the receipt by
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Agent of an executed assignment and assumption agreement and other supporting
documents, have been fulfilled.
3.10 Basis for Determining Interest Rate Inadequate or Unfair. In the
event that Agent shall have determined that:
(i) reasonable means do not exist for
ascertaining the LIBOR for any Interest Period; or
(ii) Dollar deposits in the relevant amount and
for the relevant maturity are not available in the London
interbank market with respect to a proposed LIBOR Advance, or a
proposed conversion of a Base Rate Advance into a LIBOR Advance;
then
Agent shall give Borrower prompt written, telephonic or electronic notice of the
determination of such effect. If such notice is given, (i) any such requested
LIBOR Advance shall be made as a Base Rate Advance, unless Borrower shall notify
Agent no later than 10:00 a.m. (Los Angeles time) two (2) Business Days prior to
the date of such proposed borrowing that the request for such borrowing shall be
canceled or made as an unaffected type of LIBOR Advance, and (ii) any Base Rate
Advance which was to have been converted to an affected type of LIBOR Advance
shall be continued as or converted into a Base Rate Advance, or, if Borrower
shall notify Agent, no later than 10:00 a.m. (Los Angeles time) two (2) Business
Days prior to the proposed conversion, shall be maintained as an unaffected type
of LIBOR Advance.
Section 4. TERM AND TERMINATION
4.1 Term of Agreement. Subject to the right of Lenders to cease
making Loans to Borrower during the continuance of any Default or Event of
Default, this Agreement shall be in effect for a period of five (5) years from
the date hereof, through and including February 11, 2007 (the "Term"), unless
terminated as provided in Section 4.2 hereof.
4.2 Termination.Termination by Lenders. Agent may, and at the
direction of Majority Lenders shall, terminate this Agreement without notice
upon or after the occurrence and during the continuance of an Event of Default.
4.2.2 Termination by Borrower. Upon at least 30 days prior
written notice to Agent and Lenders, Borrower may, at its option, terminate this
Agreement; provided, however, no such termination shall be effective until
Borrower has paid or collateralized to Agent's reasonable satisfaction all of
the Obligations in immediately available funds, all Letters of Credit and LC
Guaranties have expired, terminated or have been cash collateralized to Agent's
satisfaction and Borrower has complied with Subsection 3.2.5. Unless Majority
Lenders otherwise agree, any notice of termination given by Borrower shall be
irrevocable and no Lender shall have any obligation to make any Loans or issue
or procure any Letters of Credit or LC Guaranties on or after the termination
date stated in such notice. Borrower may
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elect to terminate this Agreement in its entirety only. No section of this
Agreement or type of Loan available hereunder may be terminated singly.
4.2.3 Effect of Termination. All of the Obligations shall be
immediately due and payable upon the termination date stated in any notice of
termination of this Agreement. All undertakings, agreements, covenants,
warranties and representations of Borrower contained in the Loan Documents shall
survive any such termination and Agent shall retain its Liens in the Collateral
and Agent and each Lender shall retain all of its rights and remedies under the
Loan Documents notwithstanding such termination until all Obligations (other
than Derivative Obligations) have been discharged or paid, in full, in
immediately available funds, including, without limitation, all Obligations
under Subsection 3.2.5 resulting from such termination. Notwithstanding the
foregoing or the payment in full of the Obligations, Agent shall not be required
to terminate its Liens in the Collateral unless, with respect to any loss or
damage Agent may incur as a result of dishonored checks or other items of
payment received by Agent from Borrower or any Account Debtor and applied to the
Obligations, Agent shall, at its option, (i) have received a written agreement
satisfactory to Agent, executed by Borrower and by any Person whose loans or
other advances to Borrower are used in whole or in part to satisfy the
Obligations, indemnifying Agent and each Lender from any such loss or damage or
(ii) have retained cash Collateral for such period of time as Agent, in its
reasonable discretion, may deem necessary to protect Agent and each Lender from
any such loss or damage.
Section 5. SECURITY INTERESTS
5.1 Security Interest in Collateral. To secure the prompt payment
and performance to Agent and each Lender of the Obligations, Borrower hereby
grants to Agent for the benefit of itself and each Lender a continuing Lien upon
all of Borrower's assets, including all of the following Property and interests
in Property of Borrower, whether now owned or existing or hereafter created,
acquired or arising and wheresoever located:
(i) Accounts;
(ii) Certificated Securities;
(iii) Chattel Paper, including Electronic
Chattel Paper and Tangible Chattel Paper;
(iv) Commercial Tort Claims;
(v) Computer Hardware and Software and all
rights with respect thereto, including, any and all licenses,
options, warranties, service contracts, program services, test
rights, maintenance rights, support rights, improvement rights,
renewal rights and indemnifications, and any substitutions,
replacements, additions or model conversions of any of the
foregoing;
(vi) Contract Rights;
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(vii) Deposit Accounts;
(viii) Documents;
(ix) Equipment;
(x) Financial Assets;
(xi) Fixtures;
(xii) General Intangibles, including Payment
Intangibles and Software;
(xiii) Goods (including all of its Equipment,
Fixtures and Inventory), and all accessions, additions,
attachments, improvements, substitutions and replacements
thereto and therefor;
(xiv) Instruments;
(xv) Intellectual Property;
(xvi) Inventory;
(xvii) Investment Property;
(xviii) money (of every jurisdiction
whatsoever);
(xix) Letter-of-Credit Rights;
(xx) Payment Intangibles;
(xxi) Security Entitlements;
(xxii) Software;
(xxiii) Supporting Obligations;
(xxiv) Uncertificated Securities; and
(xxv) to the extent not included in the
foregoing, all other personal property of any kind or
description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of
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security interest therein, Agent will not enforce its security interest in
Borrower's rights under such lease or license (other than in respect of the
Proceeds thereof) for so long as such prohibition continues, it being understood
that upon request of Agent, Borrower will in good faith use reasonable efforts
to obtain consent for the creation of a security interest in favor of Agent (and
to Agent's enforcement of such security interest) in Agent's rights under such
lease or license.
5.2 Other Collateral.
5.2.1 Commercial Tort Claims. Borrower shall, and shall cause
its Subsidiaries to, promptly notify Agent in writing upon its obtaining
knowledge of the incurrence of or obtaining a Commercial Tort Claim after the
Closing Date against any third party and, upon request of Agent, promptly enter
into an amendment to this Agreement or the Subsidiary Security Agreement, as
applicable, and do such other acts or things deemed appropriate by Agent to give
Agent a security interest in any such Commercial Tort Claim.
5.2.2 Other Collateral. Borrower shall, and shall cause its
Subsidiaries to, promptly notify Agent in writing upon acquiring or otherwise
obtaining any material amount of Collateral after the date hereof consisting of
Deposit Accounts, Investment Property, Letter of Credit Rights or Electronic
Chattel Paper and, upon the request of Agent, promptly execute such other
documents, and do such other acts or things deemed appropriate by Agent to
deliver to Agent control with respect to such Collateral; promptly notify Agent
in writing upon acquiring or otherwise obtaining any Collateral after the date
hereof consisting of Documents or Instruments and, upon the request of Agent,
will promptly execute such other documents, and do such other acts or things
deemed appropriate by Agent to deliver to Agent possession of such Documents
which are negotiable and Instruments (other than Instruments for which the
aggregate principal amount does not collectively exceed $100,000), and, with
respect to nonnegotiable Documents, to have such nonnegotiable Documents issued
in the name of Agent; and with respect to Collateral in the possession of a
third party, other than Certificated Securities and Goods covered by a Document,
obtain an acknowledgement from the third party that it is holding the Collateral
for the benefit of Agent.
5.3 Lien Perfection; Further Assurances. Borrower shall, and shall
cause its Subsidiaries to, execute such UCC-1 financing statements as are
required by the UCC and such other instruments, assignments or documents as are
necessary to perfect Agent's Lien upon any of the Collateral and shall take such
other action as may be required to perfect or to continue the perfection of
Agent's Lien upon the Collateral. Unless prohibited by applicable law, Borrower
hereby irrevocably authorizes Agent to execute (if required) and file any such
financing statements or amendments, including, without limitation, financing
statements that indicate the Collateral (i) as all assets of Borrower or its
Subsidiaries, as applicable, or words of similar effect, or (ii) as being of an
equal or lesser scope, or with greater or lesser detail, than as set forth in
Section 5.1, on Borrower's or the applicable Subsidiary's behalf. Borrower, on
behalf of itself and its Subsidiaries, also hereby ratifies its authorization
for Agent to have filed in any jurisdiction any like financing statements or
amendments thereto if filed prior to the date hereof. The parties agree that a
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement and may be filed in
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any appropriate office in lieu thereof. At Agent's request, Borrower shall, and
shall cause its Subsidiaries to, also promptly execute or cause to be executed
and shall deliver to Agent any and all documents, instruments and agreements
deemed necessary by Agent to give effect to or carry out the terms or intent of
the Loan Documents. Borrower shall, and shall cause its Subsidiaries to, xxxx
all chattel paper to note Agent's Liens therein.
5.4 Lien on Realty. The due and punctual payment and performance of
the Obligations shall also be secured by the Lien created by Mortgages upon all
real property of Borrower and its Subsidiaries now or hereafter owned, together
with all improvements or fixtures on such real property. Each Mortgage shall be
executed by Borrower or the applicable Subsidiary in favor of Agent. Each
Mortgage shall be duly recorded, at Borrower's expense, in each office where
such recording is required to constitute a fully perfected first Lien on the
real property covered thereby, together with all improvements or fixtures on
such real property. Borrower shall deliver to Agent, at Borrower's expense,
mortgagee title insurance policies issued by a title insurance company
satisfactory to Agent, which policies shall be in form and substance
satisfactory to Agent and shall insure a valid first Lien in favor of Agent, for
the benefit of itself and the Lenders, on the real property covered by each
Mortgage, subject only to those exceptions acceptable to Agent and its counsel.
Borrower shall deliver to Agent such other documents, including, without
limitation, as-built survey prints of the real property, as Agent and its
counsel may request relating to the real property subject to the Mortgages.
Section 6. COLLATERAL ADMINISTRATION
6.1 General.
6.1.1 Location of Collateral. All Collateral, other than
Inventory in transit, Inventory held pursuant to leases at a lessee's location
and motor vehicles, will at all times be kept by Borrower and Guarantors at one
or more of business locations set forth in Exhibit 6.1.1 hereto, as updated
pursuant to Section 6.3 hereof.
6.1.2 Insurance of Collateral. Borrower shall maintain and pay
for insurance upon all Collateral wherever located and with respect to the
business of Borrower and Guarantors, covering casualty, hazard, public
liability, workers' compensation and such other risks in such amounts and with
such insurance companies as are reasonably satisfactory to Agent. Borrower shall
deliver certified copies of such policies to Agent as promptly as practicable,
with satisfactory lender's loss payable endorsements, naming Agent as loss payee
on any property insurance or business interruption insurance policies and as an
additional insured on any liability insurance policies, and showing only such
other loss payees, assignees and additional insureds as are satisfactory to
Agent. Each policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 10 days prior written notice to Agent in the
event of cancellation of the policy for nonpayment of premium and not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any other reason whatsoever and a clause specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of Borrower,
any of its Subsidiaries or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted
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by said policy. Borrower agrees to deliver to Agent, promptly as rendered, true
copies of all reports made in any reporting forms to insurance companies. All
proceeds of business interruption insurance (if any) of Borrower and Guarantors
shall be remitted to Agent for application to the outstanding balance of the
Revolving Credit Loans.
Unless Borrower provides Agent with evidence of the insurance
coverage required by this Agreement, Agent may purchase insurance at Borrower's
expense to protect Agent's interests in the Properties of Borrower and
Guarantors. This insurance may, but need not, protect the interests of Borrower
and Guarantors. The coverage that Agent purchases may not pay any claim that
Borrower or any Guarantor makes or any claim that is made against Borrower or
any such Guarantor in connection with said Property. Borrower may later cancel
any insurance purchased by Agent, but only after providing Agent with evidence
that Borrower and Guarantors have obtained insurance as required by this
Agreement. If Agent purchases insurance, Borrower will be responsible for the
costs of that insurance, including interest and any other charges Agent may
impose in connection with the placement of insurance, until the effective date
of the cancellation or expiration of the insurance. The costs of the insurance
may be added to the Obligations. The costs of the insurance may be more than the
cost of insurance that Borrower and Guarantors may be able to obtain on their
own.
6.1.3 Protection of Collateral. Neither Agent nor any Lender
shall be liable or responsible in any way for the safekeeping of any of the
Collateral or for any loss or damage thereto (except for reasonable care in the
custody thereof while any Collateral is in Agent's or such Lender's actual
possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other person
whomsoever, but the same shall be at Borrower's sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts. Borrower
shall, and shall cause each of its Subsidiaries to, keep accurate and complete
records of its Accounts and all payments and collections thereon and shall
submit to Agent on such periodic basis as Agent shall request a sales and
collections report for the preceding period, in form consistent with the reports
currently prepared by Borrower with respect to such information. Concurrently
with the delivery of each Borrowing Base Certificate required by Subsection
8.1.4, or more frequently as requested by Agent, from and after the date hereof,
Borrower shall deliver to Agent a detailed aging of all of Accounts of Borrower
and Guarantors, and upon Agent's request therefor, copies of proof of delivery
and the original copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts so scheduled and
such other matters and information relating to the status of then existing
Accounts as Agent shall reasonably request.
6.2.2 Taxes. If an Account includes a charge for any tax
payable to any governmental taxing authority, Agent is authorized, in its sole
discretion, to pay the amount thereof to the proper taxing authority for the
account of Borrower or its Subsidiary and to charge Borrower therefor, except
for taxes that (i) are being actively contested in good faith and by appropriate
proceedings and with respect to which Borrower or such Subsidiary
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maintains reasonable reserves on its books therefor and (ii) would not
reasonably be expected to result in any Lien other than a Permitted Lien. In no
event shall Agent or any Lender be liable for any taxes to any governmental
taxing authority that may be due by Borrower or any of its Subsidiaries or
Affiliates.
6.2.3 Account Verification. Any of Agent's officers, employees
or agents shall have the right, at any time or times hereafter, in the name of
Agent, any designee of Agent or Borrower or any Guarantor, to verify the
validity, amount or any other matter relating to any Accounts by mail,
telephone, telegraph or otherwise; provided, that unless a Default or an Event
of Default is then in existence, prior to conducting each set of verifications,
Agent shall generally consult with Borrower about the verification process.
Borrower shall cooperate fully with Agent in an effort to facilitate and
promptly conclude any such verification process.
6.2.4 Maintenance of Dominion Account. Borrower shall, and
shall cause Guarantors to, maintain lockbox and blocked account arrangements
acceptable to Agent with such banks as may be selected by Borrower and be
acceptable to Agent, for direct deposit of payments and other remittances,
including, without limitation, payment on Accounts. Borrower shall, and at
Agent's discretion shall cause Guarantors to, also maintain a Dominion Account
or Accounts pursuant to lockbox and blocked account arrangements acceptable to
Agent with such banks as may be selected by Borrower and be acceptable to Agent.
Borrower or the applicable Guarantor shall issue to any such banks an
irrevocable letter of instruction directing such banks to deposit all payments
or other remittances received in the lockbox and blocked accounts to the
Dominion Account for application on account of the Obligations. All funds
deposited in any Dominion Account shall immediately become the property of
Agent, for the ratable benefit of Lenders, and Borrower or the applicable
Guarantor shall obtain the agreement by such banks in favor of Agent to waive
any offset rights against the funds so deposited. In the event that the
applicable bank is unwilling to waive such rights, Borrower shall, and shall
cause Guarantors to, upon Agent's request to do so, immediately transfer any
funds deposited in such bank accounts to a bank that will agree to waive such
rights. Agent assumes no responsibility for such lockbox and blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.
6.2.5 Collection of Accounts, Proceeds of Collateral. To
expedite collection, Borrower shall, and shall cause Guarantors to, endeavor in
the first instance to make collection of its Accounts for Agent. All remittances
received by Borrower or any Guarantor on account of Accounts, together with the
proceeds of any other Collateral, shall be held as Agent's property, for its
benefit and the benefit of Lenders, by Borrower or any Guarantor as trustee of
an express trust for Agent's benefit and Borrower or Guarantor shall immediately
deposit same in kind in the lockboxes or a Dominion Account, or pursuant to such
other arrangements as are acceptable to Agent. Agent retains the right at all
times after the occurrence and during the continuance of a Default or an Event
of Default to notify Account Debtors that Accounts of Borrower and Guarantors
have been assigned to Agent and to collect such Accounts directly in its own
name and to charge the collection costs and expenses, including attorneys' fees,
to Borrower.
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6.3 Records and Reports of Inventory, Machinery and Equipment.
Borrower shall, and shall cause its Subsidiaries to, keep records of its
Inventory and Equipment, which records shall be complete and accurate in all
material respects. Borrower shall furnish to Agent and Lenders updates of
Exhibit 6.1.1 and Inventory, and Equipment reports concurrently with the
delivery of each Borrowing Base Certificate described in Subsection 8.1.4 or
more frequently as requested by Agent, which reports will be in such other
format and detail as Agent shall request and shall include a current list of all
locations of Inventory, Machinery and Equipment of Borrower and Guarantors.
Borrower shall conduct a physical inventory of all container Inventory on
premises owned or leased by Borrower or any of its Subsidiaries no less
frequently than monthly and shall provide to Agent a report based on each such
physical inventory promptly thereafter, together with such supporting
information as Agent shall reasonably request.
6.4 Administration of Equipment. Borrower shall, and shall cause its
Subsidiaries to, keep records of its Equipment which shall be complete and
accurate in all material respects itemizing and describing the kind, type,
quality, quantity and book value of its Equipment and all dispositions made in
accordance with this Agreement, and Borrower shall, and shall cause Guarantors
to, furnish Agent with a current schedule containing the foregoing information
on at least an annual basis and more often if reasonably requested by Agent.
Promptly after the reasonable request therefor by Agent, Borrower shall deliver
to Agent any and all evidence of ownership, if any, of any Equipment.
6.5 Appraisals. When reasonably requested by Agent, Borrower shall,
and cause Guarantors to, provide the following to Agent, with a copy to any
Lender which requests delivery of such reports: a report of Eligible Container
Fleet Inventory and Eligible Trailer Fleet Inventory by category and by item (in
detail), a report of Inventory, based upon a physical count, which shall
describe Inventory of Borrower and Guarantors by category and by item (in
detail) and report the then appraised value (at the lower of cost or orderly
liquidation value) of such Inventory, and a report of Equipment which shall
describe Borrower's and Guarantors' Equipment (in detail) and report the then
appraised value (at the lower of cost or orderly liquidation value) of such
Equipment. In addition, when requested by Agent after consultation with Borrower
regarding the scope and cost of any such appraisal, Borrower shall provide the
Lenders, at Borrower's expense, with appraisals or updates thereof of any or all
of the Collateral from an Appraiser. Unless an Event of Default has occurred and
is continuing or Borrower otherwise agrees, (i) the appraisals respecting
Inventory held for lease or sale shall be requested at least once, but not more
than once, during any twelve month period, other than appraisals of such
Inventory in connection with a Permitted Acquisition, and (ii) updated
certifications as to material changes in value since the most recent appraisal
shall be requested at least once, but not more than once, during any twelve
month period.
6.6 Field Examinations. Agent shall conduct a field examination
twice per year or, if an Event of Default exists, more frequently at Agent's
discretion.
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Section 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties. To induce Agent and each
Lender to enter into this Agreement and to make advances hereunder, Borrower
warrants, represents and covenants to Agent and each Lender that:
7.1.1 Organization and Qualification. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Borrower's Subsidiaries is a corporation,
limited partnership or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. Each of Borrower and each of its Subsidiaries is
duly qualified and is authorized to do business and is in good standing as a
limited liability company, limited partnership or corporation, as applicable, in
each state or jurisdiction listed on Exhibit 7.1.1 hereto and in all other
states and jurisdictions in which the failure of Borrower or any of its
Subsidiaries to be so qualified would reasonably be expected to have a Material
Adverse Effect.
7.1.2 Power and Authority. Borrower and each Guarantor is duly
authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents have been duly authorized by all necessary corporate or other relevant
action and do not and will not (i) require any consent or approval of the
shareholders of Borrower or any of the shareholders, partners or members, as the
case may be, of any Guarantor; (ii) contravene Borrower's or any Guarantors'
charter, articles or certificate of incorporation, partnership agreement,
certificate of formation, by-laws, limited liability company agreement,
operating agreement or other organizational documents (as the case may be);
(iii) violate, or cause Borrower or any Guarantor to be in default under, any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to Borrower or any
Guarantor; (iv) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which Borrower or any Guarantor is a party or by which it or its
Properties may be bound or affected; or (v) result in, or require, the creation
or imposition of any Lien (other than Permitted Liens) upon or with respect to
any of the Properties now owned or hereafter acquired by Borrower or any
Guarantor.
7.1.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each of Borrower and each Guarantor party
thereto, enforceable against it in accordance with its respective terms, except
as limited by applicable bankruptcy or insolvency laws, and by general
principles of equity.
7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of
the date hereof, (i) the correct name of each of the Subsidiaries of Borrower,
its jurisdiction of incorporation or organization and the percentage of its
Voting Stock owned by Borrower or a Subsidiary of Borrower, (ii) the name of
each of Borrower's and each Guarantors' corporate or joint venture
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relationships and the nature of the relationship, (iii) the number and nature of
all outstanding Securities of Borrower and the number, nature and holder of
Securities of each Guarantor and (iv) the number of issued and treasury
Securities of Borrower. Borrower and each Guarantor has good title to all of the
Securities it purports to own of each of such Subsidiaries, free and clear in
each case of any Lien other than Permitted Liens. All such Securities have been
duly issued and are fully paid and non-assessable. As of the date hereof, there
are no outstanding options to purchase, or any rights or warrants to subscribe
for, or any commitments or agreements to issue or sell any Securities or
obligations convertible into, or any powers of attorney relating to any
Securities of any of Borrower's direct or indirect Subsidiaries. Except as set
forth on Exhibit 7.1.4, as of the date hereof, there are no outstanding
agreements or instruments binding upon any of Borrower's or any of Guarantors'
partners, members or shareholders, as the case may be, relating to the ownership
of its Securities.
7.1.5 Names. Neither Borrower nor any Guarantor has been known
as or has used any legal, fictitious or trade names except those listed on
Exhibit 7.1.5 hereto as such Exhibit may be amended in connection with a
Permitted Acquisition. Except as set forth on Exhibit 7.1.5 or in connection
with an Acquisition permitted hereunder consummated after the date hereof,
neither Borrower nor any Guarantor has been the surviving entity of a merger or
consolidation or has acquired all or substantially all of the assets of any
Person. Borrower's and each Guarantors' respective states of incorporation or
organization, Type of Organization and Organizational I.D. Number are set forth
on Exhibits 7.1.4 and 7.1.5, as such Exhibits may be amended in connection with
a Permitted Acquisition. The respective exact legal names of Borrower and each
Guarantor are set forth on Exhibit 7.1.5, as such Exhibit may be amended in
connection with a Permitted Acquisition.
7.1.6 Business Locations; Agent for Process. Each of
Borrower's and each Guarantor's chief executive office and other places of
business are as listed on Exhibit 6.1.1 hereto, as updated from time to time by
Borrower. During the preceding one-year period, neither Borrower nor any
Guarantor has had an office or place of business other than as listed on Exhibit
6.1.1. All tangible Collateral is and will at all times be kept by Borrower and
Guarantors in accordance with Subsection 6.1.1. Except as shown on Exhibit
6.1.1, as of the date hereof, no Inventory is stored with a bailee, distributor,
warehouseman or similar party, nor is any Inventory consigned to any Person.
7.1.7 Title to Properties; Priority of Liens. Borrower and
each Guarantor has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of the Collateral and all of its other Property,
in each case, free and clear of all Liens except Permitted Liens. Borrower and
each Guarantor has paid or discharged all lawful claims which, if unpaid, might
become a Lien against any of Borrower's or such Guarantors' Properties that is
not a Permitted Lien. The Liens granted to Agent under Section 5 hereof and
under the Security Documents are first priority Liens, subject only to Permitted
Liens.
7.1.8 Accounts. Agent may rely, in determining which Accounts
are Eligible Accounts, on all statements and representations made by Borrower
with respect to any Account or Accounts of Borrower or any Guarantor. With
respect to each of such
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Accounts, whether or not such Account is an Eligible Account, unless otherwise
disclosed to Agent in writing:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide
sale and delivery of goods or rendition of services by Borrower
or the applicable Guarantor, in the ordinary course of its
business and in accordance with the terms and conditions of all
purchase orders, contracts or other documents relating thereto
and forming a part of the contract between Borrower or the
applicable Guarantor and the Account Debtor and the Account
Debtor is not an Affiliate of Borrower or any Guarantor;
(iii) It is for a liquidated amount maturing as
stated in the duplicate invoice covering such sale or rendition
of services;
(iv) There are no facts, events or occurrences
which in any way impair the validity or enforceability of any
Accounts or tend to reduce the amount payable thereunder from
the face amount of the invoice and statements delivered or made
available to Agent with respect thereto;
(v) To Borrower's knowledge, the Account Debtor
thereunder (1) had the capacity to contract at the time any
contract or other document giving rise to the Account was
executed and (2) such Account Debtor is Solvent; and
(vi) To Borrower's knowledge, there are no
proceedings or actions which are threatened or pending against
the Account Debtor thereunder which might result in any material
adverse change in such Account Debtor's financial condition or
the collectibility of such Account (other than non-material
disputes involving de minimis amounts arising in the ordinary
course of business).
7.1.9 Equipment. The Equipment of Borrower and Guarantors is
in good operating condition and repair.
7.1.10 Financial Statements; Fiscal Year. The Consolidated
balance sheets of Borrower and its Subsidiaries (including the accounts of all
Subsidiaries of Borrower and their respective Subsidiaries for the respective
periods during which a Subsidiary relationship existed) as of October 31, 2001,
and the related statements of income and cash flows for the periods ended on
such dates, except for the absence of footnote disclosures and normal year-end
adjustments, have been prepared in accordance with GAAP, and present fairly in
all material respects the financial positions of Borrower and such Persons,
taken as a whole, at such dates and the results of Borrower's and such Persons'
operations, taken as a whole, for such periods. As of the date hereof, since
December 31, 2000, there has been no material
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adverse change in the financial position of Borrower and such other Persons,
taken as a whole, as reflected in the Consolidated balance sheet as of such
date. As of the date hereof, the fiscal year of Borrower and each such Persons
ends on December 31 of each year.
7.1.11 Full Disclosure. The financial statements referred to in
Subsection 7.1.10 hereof do not, nor does this Agreement or any other written
statement of Borrower to Agent or any Lender, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact which Borrower has failed to
disclose to Agent or any Lender in writing which would reasonably be expected to
have a Material Adverse Effect.
7.1.12 Solvent Financial Condition. Each of Borrower and each
of Guarantor, is now and, after giving effect to the Loans to be made and the
Letters of Credit and LC Guaranties to be issued hereunder and all related
transactions, will be, Solvent.
7.1.13 Surety Obligations. Except as set forth on Exhibit
7.1.13, as of the date hereof, neither Borrower nor any Guarantor is obligated
as surety or indemnitor under any surety or similar bond or other contract
issued or entered into to assure payment, performance or completion of
performance of any undertaking or obligation of any Person.
7.1.14 Identification Numbers; Taxes. Borrower's federal tax
identification number is 00-0000000. The federal tax identification number of
each Subsidiary of Borrower is shown on Exhibit 7.1.14 hereto, as updated from
time to time. Borrower and each of its Subsidiaries has filed all federal, state
and local tax returns and other reports relating to taxes it is required by law
to file, except where the failure to so file would not reasonably be expected to
have a Material Adverse Effect, and has paid, or made provision for the payment
of, all taxes, assessments, fees, levies and other governmental charges upon it,
its income and Properties as and when such taxes, assessments, fees, levies and
charges are due and payable, unless and to the extent any thereof are being
diligently contested in good faith and by appropriate proceedings and Borrower
and each of its Subsidiaries maintains reasonable reserves on its books
therefor. The provision for taxes on the books of Borrower and its Subsidiaries
is adequate for all years not closed by applicable statutes, and for the current
fiscal year.
7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto, there
are no claims for brokerage commissions, finder's fees or investment banking
fees in connection with the transactions contemplated by this Agreement.
7.1.16 Patents, Trademarks, Copyrights and Licenses. Borrower
and each Guarantor owns, possesses or licenses or has the right to use all the
patents, trademarks, service marks, trade names, copyrights, licenses and other
Intellectual Property necessary for the present and planned future conduct of
its business without any known conflict with the rights of others, except for
such conflicts as would not reasonably be expected to have a Material Adverse
Effect. All such patents, trademarks, service marks, tradenames, copyrights,
licenses, and Intellectual Property are listed on Exhibit 7.1.16 hereto. No
claim has been asserted to Borrower or any Guarantor which is currently pending
that their use of their
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Intellectual Property or the conduct of their business does or may infringe upon
the Intellectual Property rights of any third party. To the knowledge of
Borrower and except as set forth on Exhibit 7.1.16 hereto, as of the date
hereof, no Person is engaging in any activity that infringes in any material
respect upon Borrower's or any of its Subsidiaries' material Intellectual
Property. Except as set forth on Exhibit 7.1.16, each of Borrower's and each
Guarantors' (i) material trademarks, service marks, and copyrights are
registered with the U.S. Patent and Trademark Office or in the U.S. Copyright
Office, as applicable and (ii) material license agreements and similar
arrangements relating to its Inventory (1) permits, and does not restrict, the
assignment by Borrower or any Guarantors to Agent, or any other Person
designated by Agent, of all of Borrower's or such Guarantor's, as applicable,
rights, title and interest pertaining to such license agreement or such similar
arrangement and (2) would permit the continued use by Borrower or such
Guarantor, or Agent or its assignee, of such license agreement or such similar
arrangement and the right to sell Inventory subject to such license agreement
for a period of no less than 6 months after a default or breach of such
agreement or arrangement. The consummation and performance of the transactions
and actions contemplated by this Agreement and the other Loan Documents,
including without limitation, the exercise by Agent of any of its rights or
remedies under Section 10, will not result in the termination or impairment of
any of Borrower's or any Guarantors' ownership or rights relating to its
Intellectual Property, except for such Intellectual Property rights the loss or
impairment of which would not reasonably be expected to have a Material Adverse
Effect. Except as listed on Exhibit 7.1.16 and except as would not reasonably be
expected to have a Material Adverse Effect, (i) neither Borrower nor any
Guarantor is in breach of, or default under, any term of any license or
sublicense with respect to any of its Intellectual Property and (ii) to the
knowledge of Borrower, no other party to such license or sublicense is in breach
thereof or default thereunder, and such license is valid and enforceable.
7.1.17 Governmental Consents. Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all governmental
consents, approvals, licenses, authorizations, permits, certificates,
inspections and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it.
7.1.18 Compliance with Laws. Borrower and each of its
Subsidiaries has duly complied in all material respects with, and its
Properties, business operations and leaseholds are in compliance in all material
respects with, the provisions of all federal, state and local laws, rules and
regulations applicable to Borrower or such Subsidiary, as applicable, its
Properties or the conduct of its business, and there have been no citations,
notices or orders of noncompliance issued to Borrower or any of its Subsidiaries
under any such law, rule or regulation. Borrower and each of its Subsidiaries
has established and maintains an adequate monitoring system to insure that it
remains in compliance in all material respects with all federal, state and local
rules, laws and regulations applicable to it. No Inventory has been produced by
Borrower or any of its Subsidiaries in violation of the Fair Labor Standards Act
(29 U.S.C. Section 201 et seq.), as amended.
7.1.19 Restrictions. Neither Borrower nor any Guarantor is a
party or subject to any contract or agreement which restricts its right or
ability to incur Indebtedness,
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other than as set forth on Exhibit 7.1.19 hereto, none of which prohibit the
execution of or compliance with this Agreement or the other Loan Documents by
Borrower or any Guarantor, as applicable. Except as permitted in the Loan
Agreement, none of the Collateral is subject to contractual obligations that may
restrict or inhibit Agent's rights or abilities as to sell or dispose of the
Collateral or any part thereof after the occurrence and during the continuance
of an Event of Default.
7.1.20 Litigation. Except as set forth on Exhibit 7.1.20
hereto, there are no actions, suits, proceedings or investigations pending, or
to the knowledge of Borrower, threatened, against or involving Borrower or any
of its Subsidiaries, or the business, operations, Properties, prospects, profits
or condition of Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, judgment, decree or rule of any court, governmental
authority or arbitration board or tribunal, which, singly or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
7.1.21 No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or Borrower's performance hereunder, constitute a Default or an Event of
Default. Neither Borrower nor any Guarantor is in default in (and no event has
occurred and no condition exists which constitutes, or which the passage of time
or the giving of notice or both would constitute, a default in) the payment of
any Indebtedness to any Person for Funded Debt in excess of the lesser of
$1,000,000 or that amount which would have a Material Adverse Effect.
7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing of
all capitalized and operating personal property leases of Borrower and
Guarantors and all real property leases of Borrower and Guarantors. Borrower and
each Guarantor is in full compliance with all of the terms of each of its
respective capitalized and operating leases, except where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect.
7.1.23 Pension Plans. Except as disclosed on Exhibit 7.1.23
hereto, neither Borrower nor any of its Subsidiaries has any Plan. Borrower and
each of its Subsidiaries is in compliance with the requirements of ERISA and the
regulations promulgated thereunder with respect to each Plan, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect. No fact or situation that would reasonably be expected to result in a
material adverse change in the financial condition of Borrower and Guarantors
exists in connection with any Plan. Neither Borrower nor any Guarantor has any
material withdrawal liability in connection with a Multiemployer Plan.
7.1.24 Trade Relations. Except as set forth on Exhibit 7.1.24,
there exists no actual or, to Borrower's knowledge, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between Borrower or any Guarantor and any customer or any group of
customers whose purchases individually or in the aggregate are material to the
business of Borrower and Guarantors (taken as a whole), or with any material
supplier, except in each case, where the same would not reasonably be expected
to
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have a Material Adverse Effect, and there exists no present condition or state
of facts or circumstances which would prevent Borrower or any Guarantor from
conducting such business after the consummation of the transaction contemplated
by this Agreement in substantially the same manner in which it has heretofore
been conducted.
7.1.25 Labor Relations. Except as described on Exhibit 7.1.25
hereto, as of the date hereof, neither Borrower nor any of its Subsidiaries is a
party to any collective bargaining agreement covering any material number of
employees. There are no material grievances, disputes or controversies with any
union or any other organization of Borrower's or any of its Subsidiaries'
employees, or threats of strikes, work stoppages or any asserted pending demands
for collective bargaining by any union or organization, except those that would
not reasonably be expected to have a Material Adverse Effect.
7.2 Continuous Nature of Representations and Warranties. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be continuous in nature and shall remain accurate, complete in
all material respects and not misleading at all times during the term of this
Agreement (on each day as if made on and as of such date, except to the extent
that any representation and warranty is made only as of a specified date, in
which case it shall have been true and correct as of such date), except for
changes in the nature of Borrower's or one of Borrower's Subsidiary's business
or operations that would render the information in any exhibit attached hereto
or to any other Loan Document either inaccurate, incomplete or misleading, so
long as Majority Lenders have consented to such changes or such changes are
expressly permitted by this Agreement.
7.3 Survival of Representations and Warranties. All representations
and warranties of Borrower or any Guarantor contained in this Agreement or any
of the other Loan Documents shall survive the execution, delivery and acceptance
thereof by Agent and each Lender and the parties thereto and the closing of the
transactions described therein or related thereto.
Section 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants. During the Term, and thereafter for so
long as there are any Obligations outstanding, Borrower covenants that, unless
otherwise consented to by Majority Lenders, in writing, it shall:
8.1.1 Visits and Inspections; Lender Meeting. Permit
representatives of Agent, and during the continuation of any Default or Event of
Default any Lender, from time to time, as often as may be reasonably requested,
but only during normal business hours, to visit and inspect the Properties of
Borrower and each of its Subsidiaries, inspect, audit and make extracts from its
books and records, and discuss with its officers, its employees and its
independent accountants, Borrower's and each of its Subsidiaries' business,
assets, liabilities, financial condition, business prospects and results of
operations. Agent, if no Default or Event of Default then exists, shall give
Borrower reasonable prior notice of any such inspection or audit. Without
limiting the foregoing, Borrower will participate and will cause its key
management personnel to participate in a meeting with Agent and Lenders at least
once
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during each year or more frequently, as Agent may reasonably request (except
that during the continuation of an Event of Default such meetings may be held
more frequently as requested by Agent or Majority Lenders), which meeting(s)
shall be held at such times and such places as may be reasonably requested by
Agent.
8.1.2 Notices.
(a) Promptly notify Agent in writing of the occurrence of
any event or the existence of any fact that, in either case, is known to
Borrower, which renders any representation or warranty in this Agreement or any
of the other Loan Documents inaccurate, incomplete or misleading in any material
respect as of the date made or remade. In addition, Borrower agrees to provide
Agent with (i) 10 Business Days' prior written notice of (1) any change in the
legal name of Borrower or any Guarantor, (2) the adoption by Borrower or any
Guarantor of any new fictitious name or tradename and (3) any change in the
chief executive office of Borrower or any Guarantor, and (ii) prompt written
notice of any change in the information disclosed in any Exhibit hereto, in each
case after giving effect to the materiality limits and Material Adverse Effect
qualifications contained therein.
(b) Promptly, and in any event within ten (10) Business Days
after the Borrower or any of its Subsidiaries becomes aware that a Reportable
Event involving a claim against, or possible liability of, the Borrower of at
least $250,000 has occurred, a written statement of the chief financial officer
of the Borrower describing such Reportable Event and any action that is being
taking with respect thereto by the Borrower or any such Subsidiary, and any
action taken or threatened by the Internal Revenue Service, Department of Labor
or Pension Benefit Guaranty Corporation.
(c) Promptly, and in any event within ten (10) Business Days
after receipt by the Borrower or any of its Subsidiaries of any notice,
complaint or order alleging actual or prospective violation of any
environmental, health or safety Legal Requirement by the Borrower or any of its
Subsidiaries or alleging responsibility of the Borrower or any of its
Subsidiaries for costs of a cleanup, together with a copy of such notice,
complaint, or order and a written statement describing any action being taken
with respect thereto by the Borrower or any such Subsidiary.
8.1.3 Financial Statements. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account with respect to its
business activities in which proper entries are made in accordance with
customary accounting practices reflecting all its financial transactions; and
cause to be prepared and furnished to Agent and each Lender, the following, all
to be prepared in accordance with GAAP applied on a consistent basis, unless
Borrower's certified public accountants concur in any change therein and such
change is disclosed to Agent and is consistent with GAAP:
(i) as soon as available, but not later than
90 days after the close of each fiscal year of Borrower,
unqualified (except for a qualification for a change in
accounting principles with which the accountant concurs) audited
financial statements (including, but not limited to, balance
sheet, income
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statement and statement of cash flows) of Borrower and its
Subsidiaries as of the end of such year, on a Consolidated
basis, certified by a firm of independent certified public
accountants of recognized standing selected by Borrower but
reasonably acceptable to Agent, together with unaudited
consolidating balance sheets, income statements and statements
of cash flows and, within a reasonable time thereafter a copy of
any management letter issued in connection therewith;
(ii) as soon as available, but not later than
30 days after the end of each month hereafter, including the
last month of Borrower's fiscal year, unaudited interim
financial statements (including, but not limited to, balance
sheet, income statement and statement of cash flows) of Borrower
and its Subsidiaries as of the end of such month and of the
portion of the fiscal year then elapsed, on a Consolidated
basis, certified by the principal financial officer of Borrower
as prepared in accordance with GAAP and fairly presenting in all
material respects the financial position and results of
operations of Borrower and its Subsidiaries for such month and
period subject only to changes from audit and year-end
adjustments and except that such statements need not contain
notes and, at Agent's request, unaudited interim financial
statements on a consolidating basis, in a form consistent with
Borrower's historical practices of preparation of consolidating
financial statements;
(iii) as soon as available, but not later than
45 days after the end of each fiscal quarter of Borrower,
including the last quarter of Borrower's fiscal year, unaudited
quarterly financial statements (including, but not limited to,
balance sheet, income statement and statement of cash flows) of
Borrower and its Subsidiaries as of the end of such fiscal
quarter, on a Consolidated basis, certified by the principal
financial officer of Borrower as prepared in accordance with
GAAP and fairly presenting in all material respects the
financial position and results of operations of Borrower and its
Subsidiaries for such fiscal quarter and period subject only to
changes from audit and year-end adjustments and except that such
statements need not contain notes and, at Agent's request,
unaudited interim financial statements on a consolidating basis,
in a form consistent with Borrower's historical practices of
preparation of consolidating financial statements;
(iv) together with each delivery of financial
statements pursuant to clauses (i) and (iii) of this Subsection
8.1.3, a management report (1) setting forth in comparative form
the corresponding figures for the corresponding periods of the
previous fiscal year and the corresponding figures from the most
recent Projections for the current fiscal year delivered
pursuant to Subsection 8.1.8 and (2) identifying the reasons for
any significant variations. The information above shall be
presented in reasonable detail and shall be certified by the
chief financial officer of Borrower to the effect that such
information fairly presents in all material respects the results
of operations
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and financial condition of Borrower and its Subsidiaries as at
the dates and for the periods indicated;
(v) promptly after the sending or filing
thereof, as the case may be, copies of Borrower's Forms 10Q and
10K and any proxy statements or financial statements which
Borrower has made available to its Securities holders and copies
of any regular, periodic and special reports or registration
statements which Borrower or any of its Subsidiaries files with
the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or any national
securities exchange;
(vi) upon request of Agent, copies of any
annual report to be filed with ERISA in connection with each
Plan; and
(vii) such other data and information
(financial and otherwise) as Agent or any Lender, from time to
time, may reasonably request, bearing upon or related to the
Collateral or Borrower's or any of its Subsidiaries' financial
condition or results of operations.
Concurrently with the delivery of the financial statements
described in paragraph (i) of this Subsection 8.1.3, Borrower shall forward to
Agent a copy of the accountants' letter to Borrower's management that is
prepared in connection with such financial statements and also shall cause to be
prepared and shall furnish to Agent a certificate of the aforesaid certified
public accountants certifying to Agent that, based upon their examination of the
financial statements of Borrower and its Subsidiaries performed in connection
with their examination of said financial statements, they are not aware of any
Default or Event of Default, or, if they are aware of such Default or Event of
Default, specifying the nature thereof. Concurrently with the delivery of the
financial statements described in paragraph (i) and (iii) of this Subsection
8.1.3, or more frequently if reasonably requested by Agent, Borrower shall cause
to be prepared and furnished to Agent a Compliance Certificate in the form of
Exhibit 8.1.3 hereto executed by the Chief Financial Officer of Borrower.
8.1.4 Borrowing Base Certificates. On or before the 15th
calendar day of each month and at any other time requested by Agent or Majority
Lenders from and after the date hereof, Borrower shall deliver to Agent and, at
the request of any Lender, to such Lender a Borrowing Base Certificate as of the
last day of the immediately preceding month (or as of such other date as Agent
may reasonably request), with such supporting materials as Agent shall
reasonably request.
8.1.5 Landlord, Processor and Storage Agreements. Provide
Agent on request with copies of all agreements between Borrower or any Guarantor
and any landlord, processor, distributor, warehouseman or consignee which owns
any premises at which any Collateral may, from time to time, be kept.
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8.1.6 Collateral Access Agreements. Within ninety (90) days
after the Closing Date, deliver or cause to be delivered to Agent satisfactory
Collateral Access Agreements from landlords and bailees covering at least eighty
percent (80%) of the book value of Inventory of Borrower and its Subsidiaries at
locations owned or leased by Borrower or any of its Subsidiaries at which such
Inventory is maintained when not leased to customers.
8.1.7 Guarantor Financial Statements. Deliver or cause to be
delivered to Agent financial statements, if any, for each Guarantor (to the
extent not consolidated with the financial statements delivered to Agent under
Subsection 8.1.3) in form and substance satisfactory to Agent at such intervals
and covering such time periods as Agent may request.
8.1.8 Projections. No later than 15 days after the end of each
fiscal year of Borrower and, promptly following completion of any Permitted
Acquisition with a purchase price of $10,000,000 or more or for which
Acquisition and all other Permitted Acquisitions completed since the last
delivery under this Subsection 8.1.8 the aggregate purchase prices exceed
$10,000,000, deliver to Agent Projections of Borrower and each of its
Subsidiaries for the forthcoming three (3) fiscal years, month by month
(including, but not limited to, projected balance sheets, income statements,
statements of cash flows and Availability and calculations of projected covenant
compliance).
8.1.9 Subsidiaries. Cause each Subsidiary of Borrower, whether
now or hereafter in existence, promptly upon Lender's request therefor, to
execute and deliver to Lender a Guaranty Agreement and a security agreement
pursuant to which such Subsidiary guaranties the payment of all Obligations and
grants to Lender a first priority Lien (subject only to Permitted Liens) on all
of its Properties of the types described in Subsection 5.1. Additionally,
Borrower and each Subsidiary shall execute and deliver to Lender a pledge
agreement pursuant to which Borrower grants to Lender a first priority Lien
(subject only to Permitted Liens) with respect to all of the issued and
outstanding Securities of each such Subsidiary.
8.1.10 [intentionally omitted]
8.1.11 Deposit and Brokerage Accounts. For each deposit account
or brokerage account that Borrower or any Guarantors at any time opens or
maintains, Borrower shall, at Agent's request and option, pursuant to an
agreement in form and substance satisfactory to Agent, cause the depository bank
or securities intermediary, as applicable, to agree to comply at any time with
instructions from Agent to such depository bank or securities intermediary, as
applicable, directing the disposition of funds from time to time credited to
such deposit or brokerage account, without further consent of Borrower or such
Guarantor.
8.1.12 Maintenance of Equipment. Borrower shall make or cause
to be made all necessary replacements of and repairs to Equipment so that the
operating efficiency thereof shall be maintained and preserved, reasonable wear
and tear excepted, except where the failure to so maintain the same would not
reasonably be expected to have a Material Adverse Effect. Borrower will not, and
will not allow any Guarantors to, permit any Equipment to become affixed to any
real Property leased to Borrower or any Guarantor so that
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an interest arises therein under the real estate laws of the applicable
jurisdiction unless the landlord of such real Property has executed a landlord
waiver or leasehold mortgage in favor of and in form reasonably acceptable to
Agent, and Borrower will not permit, nor will it allow any Guarantor to permit,
any of the Equipment of Borrower or any Guarantor to become an accession to any
personal Property other than Equipment that is subject to first priority (except
for Permitted Liens) Liens in favor of Agent.
8.1.13 Environmental Reports. Prior to inclusion of any
Specified Real Property in the Borrowing Base, Borrower shall provide Agent with
environmental reports, in form and substance satisfactory to Agent and Majority
Lenders and from a firm satisfactory to Agent, relating to the properties owned
by Borrower or any of its Subsidiaries.
8.2 Negative Covenants. During the Term, and thereafter for so long
as there are any Obligations outstanding, Borrower covenants that, unless
otherwise consented to by Majority Lenders, in writing, it shall not:
8.2.1 Capital Expenditures. Borrower and its Subsidiaries
shall not make payments for Capital Expenditures (net of sales of Eligible
Container Fleet Inventory) in excess of $115,000,000 in any fiscal year;
provided, that as long as no Event of Default shall have occurred and be
continuing, Borrower and its Subsidiaries may carry forward and add to the next
year's limitation amount (but not beyond such next year) the unused portion of
the limitation on Capital Expenditures for the prior year, up to a maximum of
one hundred percent (100%) of the prior year's limitation amount; and provided,
further, that the amount set forth in this Subsection 8.2.1 shall be increased
by an amount equal to three hundred percent (300%) of the net cash proceeds
received by Borrower from any sale of equity Securities of Borrower (the "CapEx
Equity Increase"), and the unused portion of any CapEx Equity Increase may be
carried forward to any subsequent fiscal year. Borrower and its Subsidiaries
shall not make any Capital Expenditures that are not directly related to the
business conducted on the Closing Date by Borrower and its Subsidiaries.
8.2.2 Additional Indebtedness. Neither Borrower nor any of its
Subsidiaries shall directly or indirectly incur, create, assume or suffer to
exist any Indebtedness other than:
(a) Indebtedness under the Credit Documents and Derivative
Obligations under which a Lender (or its Affiliate) is the counterparty incurred
in the ordinary course of business;
(b) unsecured Derivative Obligations incurred in the
ordinary course of business;
(c) Indebtedness described on Exhibit 8.2.2, and any
refinancing of such Indebtedness, so long as the aggregate principal amount of
the Indebtedness so refinanced shall not be increased and the refinancing shall
be on terms and conditions no more restrictive than the terms and conditions of
the Indebtedness to be refinanced;
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(d) Indebtedness, including Capitalized Lease Obligations,
secured by purchase money liens on or respecting Equipment the title to or
leasehold interest in which is acquired after the date hereof, not to exceed
$2,500,000 in the aggregate (irrespective of when due) outstanding at any one
time ("Purchase Money Liens and Leases") so long as each Purchase Money Lien or
Lease shall attach or relate only to the property to be acquired or the
acquisition cost of which is financed through leasing, a description shall have
been furnished to Agent for any item of equipment for which the purchase price
(whether payable by Borrower or the lessor thereof) is greater than $50,000 and
the principal amount of the debt incurred (including the principal component of
lease payments) shall not exceed one hundred percent (100%) of the purchase
price of the item or items of equipment.
(e) Indebtedness consisting of loans or advances by Borrower
to a Guarantor or by a Guarantor to Borrower or another Guarantor; provided that
all such loans and advances are evidenced by a promissory note, which is pledged
to Agent;
(f) Subordinated Debt of Borrower in an aggregate principal
amount at any time outstanding not to exceed $150,000,000; provided that (i)
such Indebtedness is unsecured and shall have such payment and other terms
acceptable to Agent, and shall be subordinated in right to payments on terms
acceptable to Agent, (ii) at the time such Indebtedness is issued, and after
giving pro forma effect thereto, no Default or Event of Default shall exist, and
(iii) the net cash proceeds shall be applied to repay the Obligations as
required by Subsection 3.3.3; and
(g) Indebtedness incurred to finance insurance premiums, not
to exceed $1,500,000 in any fiscal year.
8.2.3 Liens. Neither Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume, or suffer to exist any Lien
on any of its property now owned or hereafter acquired except:
(a) Liens granted to Agent for the benefit of the Lenders
under the Security Documents to secure the Obligations;
(b) Liens listed on Exhibit 8.2.3;
(c) Liens for taxes not yet due or being contested in good
faith and by appropriate proceedings to the extent permitted under this
Agreement;
(d) Purchase Money Liens and Leases;
(e) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, common carriers, or landlords, liens for taxes, assessments or other
governmental charges, and other similar Liens arising by operation of law for
amounts that are not yet due and payable or which are being diligently contested
in good faith by Borrower or a Guarantor, and for which adequate reserves are
maintained by Borrower for their payment;
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(f) Attachment or judgment Liens not to exceed an aggregate
of $500,000 excluding amounts (i) bonded to the reasonable satisfaction of Agent
or (ii) covered by insurance to the reasonable satisfaction of Agent;
(g) Deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under unemployment insurance,
not to exceed an aggregate of $1,500,000;
(h) Deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business not to exceed an aggregate of $1,000,000;
(i) Easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of Borrower or any of its Subsidiaries;
(j) Extensions and renewals of any of the foregoing so long
as the aggregate amount of extended or renewed Liens are not increased and are
on terms and conditions no more restrictive than the terms and conditions of the
Liens extended or renewed; and
(k) Liens securing Indebtedness described in Subsection
8.2.2(d) which has been refinanced so long as such refinanced Indebtedness is
not secured by any collateral which did not secure the Indebtedness prior to
such refinancing.
8.2.4 Contingent Obligations. Neither Borrower nor any of its
Subsidiaries shall directly or indirectly incur, assume, or suffer to exist any
Contingent Obligation, excluding indemnities given in connection with the sale
of Inventory or other asset dispositions permitted hereunder and Contingent
Obligations for Indebtedness permitted to be incurred under Subsection 8.2.2
hereof.
8.2.5 Sale of Assets. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell, lease, assign,
transfer or otherwise dispose of any assets other than (i) Inventory (including
containers held for lease) in the ordinary course of business, (ii) individual
items of Collateral with a book value of less than $1,000,000 in the aggregate
during any fiscal year, (iii) obsolete or worn out property disposed of in the
ordinary course of business, (iv) dispositions of assets not otherwise addressed
by this Subsection 8.2.5 with an aggregate fair market value not in excess of
$1,000,000 in any fiscal year, (v) sales of container Inventory held for lease
for the purpose of securitization or like off-balance sheet financing with the
prior written consent of Agent and the Lenders, which consent shall not be
unreasonably withheld, (vi) transfers of Inventory and Equipment from Borrower
to a Guarantor, or from one Guarantor to another Guarantor or to Borrower, and
(vii) sales of Trailers acquired in Permitted Acquisitions or owned by Borrower
or a Guarantor on the date
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hereof; provided that, with respect to clauses (ii), (iii), (iv), (v), and
(vii), (a) such dispositions are for fair value, (b) the aggregate consideration
is paid in full in cash at the time of disposition and is either reinvested in
the business of Borrower or its Subsidiaries (subject to the limitations of this
Agreement) or used to repay Revolving Credit Loans and (viii) sales of Equipment
which Borrower or a Guarantor will lease back under a capital lease permitted
under Section 8.2.2(d) or an operating lease permitted under Section 8.2.13.
8.2.6 Restricted Payments. Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, (a) declare or pay
any dividend (other than dividends payable solely in common stock of Borrower)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of Securities of Borrower or any
warrants, options or rights to purchase any such Securities (other than up to
$10,000 of payments to call warrants with respect to Borrower's common 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 or any of its Subsidiaries (each of the foregoing, a
"Restricted Payment") except that any Subsidiary may declare and pay dividends
to Borrower or any other Subsidiary of Borrower which is a Guarantor; or (b)
make any optional payment or prepayment on or redemption (including, without
limitation, by making payments to a sinking or analogous fund) or repurchase of
any Indebtedness (other than Indebtedness pursuant to this Agreement) or of any
Mandatory Redeemable Obligation; provided that any Subsidiary may make payments
on account of Indebtedness owing to Borrower or any other Subsidiary.
8.2.7 Investments. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, make any Investment in any
Person, whether in cash, securities, or other property of any kind including,
without limitation, any Subsidiary or Affiliate of Borrower, other than:
(a) Advances or loans (but not sales on open account on
ordinary course of business terms) made in the ordinary course of business,
including those made to finance the sale of Inventory, not to exceed $50,000
outstanding at any one time to any one Person and $250,000 in the aggregate
outstanding at any one time;
(b) loans, investments and advances between Borrower and
Guarantors permitted under this Agreement;
(c) Cash Equivalents;
(d) Permitted Acquisitions;
(e) Deposits with financial institutions, disclosed on
Exhibit 8.2.7, and which are insured by the Federal Deposit Insurance
Corporation ("FDIC") or a similar federal insurance program; provided, however,
that Borrower may, in the ordinary course of its business, maintain in its
disbursement accounts from time to time amounts in excess of then applicable
FDIC or other program insurance limits; and
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(f) Such other Investments as Majority Lenders may approve
in writing in its sole discretion.
8.2.8 Affiliate Transactions. Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, enter into any
transaction with, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service to, any Subsidiary or Affiliate of
Borrower, except (a) the transactions in existence on the Closing Date as
described on Exhibit 8.2.8, (b) transactions between or among Borrower and its
wholly-owned Subsidiaries which are Guarantors and (c) transactions in the
ordinary course of and pursuant to the reasonable requirements of Borrower's or
such Subsidiary's or Affiliate's business, as the case may be, and upon fair and
reasonable terms no less favorable to Borrower or such Subsidiary than could be
obtained in a comparable arm's-length transaction with an unaffiliated Person.
8.2.9 Additional Bank Accounts. Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, open, maintain or
otherwise have any checking, savings or other accounts at any bank or other
financial institution, or any other account where money is or may be deposited
or maintained with any Person, other than its disbursement account, the account
with Bank described in Subsection 3.3.5 and the accounts set forth on Exhibit
8.2.7, and such other accounts as have been previously approved by Agent.
Borrower's primary collection accounts and within 120 days after the Closing
Date at least 75% of all other deposit accounts of Borrower and Guarantors shall
be subject to a blocked account or control agreement in form and substance
satisfactory to Agent.
8.2.10 Excess Cash. Except upon prior written consent of Agent,
Borrower shall not, and shall not permit its Subsidiaries to, directly or
indirectly, maintain in the aggregate in all deposit accounts of Borrower and
its Subsidiaries (other than the payroll accounts and the account with Bank
described in Subsection 3.3.5), total cash balances and Investments permitted by
Subsection 8.2.7(c), in excess of an average daily balance of $750,000,
exclusive of uncollected funds, (calculated monthly) for any three consecutive
months during which any Revolving Credit Loans are outstanding hereunder and no
disbursement account shall contain more than $5,000.
8.2.11 Additional Negative Pledges. Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective, (i) any prohibition or
restriction (including any agreement to provide equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of Agent
and the Lenders) on the creation or existence of any Lien upon the assets of
Borrower or its Subsidiaries or (ii) any contractual obligation which may
restrict or inhibit Agent's rights or ability to sell or otherwise dispose of
the Collateral or any part thereof after the occurrence of an Event of Default.
8.2.12 No Subsidiaries. Borrower shall not, directly or
indirectly, form or acquire any new Subsidiaries, except (a) in connection with
Permitted Acquisitions in compliance with Subsection 8.2.14, and (b) if each of
the following conditions is met:
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(i) each new Subsidiary is a wholly-owned
Subsidiary of Borrower created to conduct business in a specific
jurisdiction;
(ii) both before and after giving effect to
the creation of such Subsidiary and the transfer of any assets
from Borrower to such Subsidiary, all representations and
warranties of Borrower and its Subsidiaries contained in any
Loan Document are true and correct, on and as of such date as if
made as of such date (except (x) such revisions as are necessary
to reflect the formation of such new Subsidiary and (y) to the
extent a representation and warranty was made only as of a
specified date, such representation and warranty shall have been
true and correct as of such date), no Default or Event of
Default shall have occurred and be continuing, and Borrower and
its Subsidiaries shall be Solvent;
(iii) Borrower shall have delivered to Agent
written notice at least fifteen (15) Business Days prior to
consummation of any transfer of assets to, or acquisition of
assets by, such new Subsidiary, describing in reasonable detail
the proposed new Subsidiary and its assets;
(iv) any such new Subsidiary shall become a
Guarantor, and shall have executed and delivered to Agent such
Security Documents (or joinders thereto, in form and substance
satisfactory to Agent) and other documents as are necessary (or
advisable in Agent's judgment) under applicable law in order to
grant Agent for the benefit of the Lenders a perfected first
priority security interest and Lien in the assets of, and
ownership interests in, such Subsidiary (subject only to
Permitted Liens); and Borrower shall execute and deliver an
amendment to the Pledge Agreement in form and substance
satisfactory to Agent, together with stock certificates and
promissory notes and other instruments endorsed in blank, to
pledge all equity interests in such new Subsidiary and all
intercompany Loans to such Subsidiary;
(v) if required by Agent, Agent shall have
received opinions of counsel, in form and substance satisfactory
to it, as to the due execution, delivery and enforceability of
the Loan Documents executed by such new Subsidiary, together
with such evidences of solvency, certificates, Certificates of
Title, and other documents and instruments reasonably requested
by Agent; and
(vi) there shall be no more than twelve (12)
Subsidiaries.
8.2.13 Operating Leases, Off-Balance Sheet Financing. Neither
Borrower nor any of its Subsidiaries shall directly or indirectly incur, create,
assume or suffer to exist any liabilities for operating leases or other
indebtedness or liabilities not reflected as such on their financial statements
other than liabilities described on Exhibit 8.2.13, and any refinancing of such
liabilities, so long as the aggregate amount thereof so refinanced shall not be
increased and the refinancing shall be on terms and conditions no more
restrictive than the
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terms and conditions of the liabilities to be refinanced; provided, however,
that Borrower and its Subsidiaries may incur liabilities in connection with
operating leases of real property (including office and yard space) and office
Equipment in the ordinary course of business and of other Equipment with values
of up to $2,500,000 in any fiscal year (exclusive of Equipment acquired under
operating leases executed prior to the Closing Date and listed on Exhibit
8.2.13) (and up to 50% of any amount not incurred in any fiscal year may be
carried over to the next fiscal year).
8.2.14 Permitted Acquisitions. Borrower shall not, and shall
not permit any of its Subsidiaries to, make an Acquisition unless each of the
following conditions is satisfied:
(a) such Acquisition is made by Borrower or a Guarantor;
(b) such Acquisition shall be consensual and, if required
under state law, shall have been approved by the board of directors or other
governing body of the Person to be acquired (if there is such a governing body);
(c) both before and after giving effect to such Acquisition,
all representations and warranties of Borrower and its Subsidiaries contained in
any Loan Document are true and correct on such date as if made as of such date
(except to the extent that a representation and warranty was made only as of a
specified date, such representation and warranty shall have been true and
correct as of such date) and no Default or Event of Default shall have occurred
and be continuing, and Agent shall receive a certificate of Borrower to such
effect on the date on which such Acquisition is consummated;
(d) both before and after giving effect to such Acquisition
and the incurrence of Indebtedness in connection therewith, Borrower and its
Subsidiaries (including any Subsidiary acquired in such Acquisition) shall be
Solvent and Borrower shall be in compliance with all financial covenants on
Exhibit 8.3 hereof on a pro forma basis, and Agent shall receive a certificate
of Borrower to such effect on the date on which such Acquisition is consummated;
(e) the purchase price for Acquisitions shall not exceed
$10,000,000 individually, $30,000,000 in the aggregate for any fiscal year, and
$100,000,000 in the aggregate for all Acquisitions during the term of this
Agreement. For purposes hereof, any Indebtedness assumed in connection with an
Acquisition shall be included in the calculation of the purchase price;
(f) Borrower shall have delivered written notice of the
pending Acquisition to Agent and the Lenders at least fifteen (15) Business Days
prior to its consummation (or such lesser period as agreed by Agent) including a
detailed description of such pending Acquisition, and if the purchase price for
such Acquisition is $5,000,000 or more, such notice shall be accompanied by
historical financial statements for the Person or business to be acquired, if
reasonably required by Agent, and preliminary pro forma financial statements
giving effect to the Acquisition, in each case in form and substance reasonably
satisfactory to Agent, analyses of sources and uses of funds, pro forma
calculations of compliance with the
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financial covenants on Exhibit 8.3 hereof and, prior to consummation of the
Acquisition, such other due diligence information as may have been reasonably
requested by Agent or any Lender;
(g) if a Revolving Credit Loan is to be made in connection
with such Acquisition, Agent shall have received a Notice of Borrowing and, if
Borrower desires to include the assets to be acquired in the Borrowing Base for
such Revolving Credit Loan, a Borrowing Base Certificate;
(h) As soon as reasonably practicable following consummation
of the Acquisition, Agent shall have received such financing statements,
filings, Certificates of Title and other Security Documents as required (or
advisable in Agent's judgment) to create and perfect Liens on any assets to be
acquired, including assets of any new Subsidiary, together with evidence
(including Lien search results) satisfactory to Agent that such Liens are first
and prior Liens subject only to Permitted Liens;
(i) all new Subsidiaries formed or acquired in such
Permitted Acquisition shall be wholly-owned, directly or indirectly, by
Borrower;
(j) the business and assets to be acquired in such
Acquisition shall be acquired free and clear of all Liens (other than Permitted
Liens);
(k) any new Subsidiary shall become a Guarantor and shall
execute and deliver to Agent such Security Documents as are required to be
executed by a Guarantor (or joinder agreements in form and substance
satisfactory to Agent) and such other documents as are necessary (or advisable
in Agent's judgment) under applicable law in order to grant Agent for the
benefit of the Lenders a perfected first priority security interest and Lien in
the assets of, and ownership interests in, such Subsidiary (subject only to
Permitted Liens); and Borrower or its Subsidiary, as applicable, shall execute
and deliver an amendment to the Pledge Agreement in form and substance
satisfactory to Agent, together with stock certificates and promissory notes and
other instruments endorsed in blank in accordance therewith;
(l) prior to inclusion of any assets in the Borrowing Base,
if Agent in its reasonable discretion requires, Agent shall have received
appraisals, in form and substance satisfactory to Agent, of all Inventory and
Equipment to be included in the Borrowing Base and shall have completed such
review of Accounts and Inventory as it deems necessary or desirable for
inclusion in the Borrowing Base;
(m) the Person or business to be acquired is engaged in the
business conducted by Borrower and its Subsidiaries immediately prior to the
Closing Date or similar activities related or incidental thereto; and
(n) in the case of any Acquisition with a purchase price of
$5,000,000 or more, on or prior to the date of such Acquisition, Agent shall
have received, in form and substance satisfactory to Agent, all acquisition
documents related thereto and certificates, and
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other documents and instruments reasonably requested by Agent, which
collectively shall confirm to Agent's satisfaction that the conditions set forth
herein have been satisfied
8.2.15 Payments and Amendments of Certain Debt.
(i) Make or permit any Subsidiary of
Borrower to make any payment of any part or all of any Subordinated Debt or take
any other action or omit to take any other action in respect of any Subordinated
Debt, except in accordance with the subordination agreement relative thereto or
the subordination provisions thereof; or
(ii) Amend or modify any agreement,
instrument or document evidencing or relating to any Subordinated Debt.
8.2.16 Securities of Subsidiaries. Permit any of its
Subsidiaries to issue any additional Securities except director's qualifying
Securities.
8.2.17 Xxxx-and-Hold Sales, Etc. Make, or permit any Subsidiary
of Borrower to make a sale to any customer on a xxxx-and-hold or consignment
basis.
8.2.18 Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than Borrower's
Subsidiaries.
8.2.19 Organizational Documents. Agree to, or suffer to occur,
any amendment, supplement or addition to its or any of its Subsidiaries'
charter, articles or certificate of incorporation, certificate of formation,
limited partnership agreement, bylaws, limited liability agreement, operating
agreement or other organizational documents (as the case may be), that would
reasonably be expected to have a Material Adverse Effect.
8.2.20 Fiscal Year End. Change, or permit any Subsidiary of
Borrower to change, its fiscal year end.
8.3 Specific Financial Covenants. During the Term, and thereafter
for so long as there are any Obligations outstanding, Borrower covenants that,
unless otherwise consented to by Majority Lenders in writing, it shall comply
with all of the financial covenants set forth in Exhibit 8.3 hereto. If GAAP
changes from the basis used in preparing the audited financial statements
delivered to Agent by Borrower on or before the Closing Date, Borrower will
provide Agent with certificates demonstrating compliance with such financial
covenants and will include, at the election of Borrower or upon the request of
Agent, calculations setting forth the adjustments necessary to demonstrate how
Borrower is in compliance with such financial covenants based upon GAAP as in
effect on the Closing Date.
Section 9. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any of
the other Loan Documents, and without affecting in any manner the rights of
Agent or any Lender under the other sections of this Agreement, no Lender shall
be required to make any Loan, nor
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shall Agent be required to or issue or procure any Letter of Credit or LC
Guaranty unless and until each of the following conditions has been and
continues to be satisfied:
9.1 Documentation. Agent shall have received, in form and substance
satisfactory to Agent and its counsel, a duly executed copy of this Agreement
and the other Loan Documents, together with such additional documents,
instruments and certificates as Agent and its counsel shall require in
connection therewith from time to time, all in form and substance satisfactory
to Agent and its counsel.
9.2 No Default; Representations and Warranties. No Default or Event
of Default shall exist and all representation and warranties made by Borrower or
any Guarantor in any Loan Document shall be true and correct on such date as if
made as of such date (except to the extent a representation and warranty was
made only as of a specified date, in which case it shall have been true and
correct as of such date).
9.3 Other Conditions. Each of the conditions precedent set forth in
the Loan Documents shall have been satisfied.
9.4 Availability. Agent shall have determined that immediately after
Lenders have made the initial Loans and after Agent has issued or procured the
initial Letters of Credit and LC Guaranties contemplated hereby, and Borrower
has paid (or, if accrued, treated as paid), all closing costs incurred in
connection with the transactions contemplated hereby, and has reserved an amount
sufficient to pay all trade payables greater than 60 days past due, Availability
shall not be less than $10,000,000.
9.5 No Litigation. No action, proceeding, investigation, regulation
or legislation shall have been instituted or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of this
Agreement or the consummation of the transactions contemplated hereby, or which
could have a Material Adverse Effect.
9.6 Material Adverse Effect. Since the date of Borrower's most
recent audited financial statements, there has not been any material adverse
change in the business, assets, financial condition, income or prospects of
Borrower and its Subsidiaries, taken as a whole, and no event or condition
exists which would be reasonably likely to result in any Material Adverse
Effect.
9.7 Cash Management System; Lockboxes. Borrower and its Subsidiaries
shall have established cash management systems for their respective operations
in accordance with Subsection 6.2.4 and on terms and conditions satisfactory to
Agent.
9.8 Lien Perfection; Title Insurance. Borrower and its Subsidiaries
shall have delivered to Agent such documents as requested by Agent to perfect
the Liens granted to Agent for the benefit of the Lenders and evidence that,
upon repayment of the Indebtedness to be refinanced by the initial Revolving
Credit Loans hereunder, Agent shall have duly perfected first priority Liens in
the assets of Borrower and its Subsidiaries, subject only to Permitted Liens.
Agent shall have received policies of title insurance satisfactory in form and
substance to Agent and its counsel or commitments therefor, insuring that the
Mortgages constitute first priority Liens on the Specified Real Property,
subject only to
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Permitted Liens.
9.9 Insurance. Agent shall have received and approved evidence of
insurance coverage in amount and scope, and Borrower's insurers shall have
provided endorsements in form and substance satisfactory to Agent naming Agent,
for the benefit of the Lenders, as loss payee for all casualty insurance and
business interruption insurance, with customary lender loss payable
endorsements, and naming Agent as an additional insured with respect to all
other insurance.
9.10 Due Diligence. Agent shall have satisfactorily completed its
diligence on the financial condition, assets, liabilities and operations of
Borrower and its Subsidiaries.
9.11 Opinions. Agent shall have received opinions of outside counsel
to Borrower and Guarantors, in form and substance reasonably satisfactory to
Agent and its counsel.
9.12 Repayment of Indebtedness. Agent shall have received evidence,
in form and substance satisfactory to Agent and its counsel, that all
Indebtedness under Borrower's existing credit facility has been satisfied (or
will be satisfied with application of the proceeds of the initial Revolving
Credit Loans) and all Liens released.
Section 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default. The occurrence of one or more of the
following events shall constitute an "Event of Default":
10.1.1 Payment of Obligations. Borrower shall fail to pay (i)
any of the Obligations hereunder (other than any fees not having a scheduled due
date) or under any Note on the due date thereof (whether due at stated maturity,
on demand, upon acceleration or otherwise) or (ii) any fees not having a
scheduled due date within two (2) Business Days after Borrower's receipt of
demand therefor.
10.1.2 Misrepresentations. Any representation, warranty or
other statement made or furnished to Agent or any Lender by or on behalf of
Borrower, any Subsidiary of Borrower or any Guarantor in this Agreement, any of
the other Loan Documents or any instrument, certificate or financial statement
furnished in compliance with or in reference thereto proves to have been false
or misleading in any material respect when made, furnished or remade pursuant to
Section 7.2 hereof.
10.1.3 Breach of Specific Covenants. Borrower shall (i) fail or
neglect to perform, keep or observe any covenant contained in Sections 6.1.2,
8.1.1, 8.1.2, 8.1.4, 8.2 or 8.3 hereof on the date that Borrower is required to
perform, keep or observe such covenant or shall (ii) fail or neglect to perform,
keep or observe any covenant contained in Sections 5.2 or 8.1.3 hereof within
ten (10) Business Days following the date on which Borrower is required to
perform, keep or observe such covenant.
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10.1.4 Breach of Other Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in Section
10.1 hereof) or any other Loan Document and the breach of such other covenant is
not cured to Agent's satisfaction by the earlier to occur of ten (10) Business
Days after (i) the date Borrower or such Subsidiary or Guarantor knew or should
have known of such occurrence and (ii) the date of giving of notice thereof by
Agent to Borrower.
10.1.5 Change of Control. A Change of Control shall occur.
10.1.6 Cross Default. A default or event of default shall occur
(and continue beyond any applicable grace period) under any note, agreement or
instrument evidencing any other Indebtedness of the Borrower or any of its
Subsidiaries, which default or event of default permits the acceleration of its
maturity, provided that the aggregate principal amount of all such Indebtedness
for which the default or event of default has occurred exceeds $1,000,000.
10.1.7 Failure of Enforceability of Credit Documents; Security.
Any material covenant, agreement or obligation of Borrower or any Guarantor
contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; Borrower or any Guarantor shall deny or disaffirm any of its material
obligations under any of the Loan Documents or any Liens granted in connection
therewith; or, any Liens granted in any of the Collateral shall be determined to
be void, voidable, invalid or unperfected, are subordinated or not given the
priority contemplated by this Agreement (except where such circumstance arises
as a result of any action or inaction by any Lender).
10.1.8 Uninsured Losses. Any material loss, theft, damage or
destruction of any portion of the Collateral having a fair market value of the
lesser of (i) $5,000,000 in the aggregate or (ii) 20% of Availability at such
time, if not fully covered (subject to such deductibles and self-insurance
retentions as Agent shall have permitted) by insurance.
10.1.9 Insolvency and Related Proceedings. Borrower, any
Subsidiary of Borrower or any Guarantor shall cease to be Solvent or shall
suffer the appointment of a receiver, trustee, custodian or similar fiduciary,
or shall make an assignment for the benefit of creditors, or any petition for an
order for relief shall be filed by or against Borrower, any Subsidiary of
Borrower or any Guarantor under the federal bankruptcy laws (if against
Borrower, any Subsidiary of Borrower or any Guarantor the continuation of such
proceeding for more than 30 days), or Borrower, any Subsidiary of Borrower or
any Guarantor shall make any offer of settlement, extension or composition to
their respective unsecured creditors generally.
10.1.10 Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of Borrower, any Subsidiary of
Borrower or any Guarantor for a period which materially adversely affects
Borrower's, such Subsidiary's or such Guarantor's capacity to continue its
business on a profitable basis; or Borrower, any
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Subsidiary of Borrower or any Guarantor shall suffer the loss or revocation of
any material license or permit now held or hereafter acquired by Borrower, any
Subsidiary of Borrower or any Guarantor which is necessary to the continued or
lawful operation of its business; or Borrower, any Subsidiary of Borrower or any
Guarantor shall be enjoined, restrained or in any way prevented by court,
governmental or administrative order from conducting all or any material part of
its business affairs; or any material lease or agreement pursuant to which
Borrower, any Subsidiary of Borrower or any Guarantor leases, uses or occupies
any Property shall be canceled or terminated prior to the expiration of its
stated term, except any such lease or agreement the cancellation or termination
of which would not reasonably be expected to have a Material Adverse Effect; or
any material portion of the Collateral shall be taken through condemnation or
the value of such Property shall be impaired through condemnation.
10.1.11 ERISA. A Reportable Event shall occur which, in Agent's
determination, constitutes grounds for the termination by the Pension Benefit
Guaranty Corporation of any Plan or for the appointment by the appropriate
United States district court of a trustee for any Plan, or if any Plan shall be
terminated or any such trustee shall be requested or appointed, or if Borrower,
any Subsidiary of Borrower or any other Guarantor is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from Borrower's, such Subsidiary's or such Guarantor's complete or
partial withdrawal from such Plan and any such event would reasonably be
expected to have a Material Adverse Effect.
10.1.12 Criminal Forfeiture. Borrower, any Subsidiary of
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could lead to a forfeiture of any Property of Borrower, any Subsidiary
of Borrower or any Guarantor.
10.1.13 Judgments. Any money judgments, writ of attachment or
similar processes (collectively, "Judgments") are issued or rendered against
Borrower, any Subsidiary of Borrower or any other Guarantor, or any of their
respective Property (i) in the case of money judgments, in an amount of $250,000
or more for any single judgment, attachment or process or $500,000 or more for
all such judgments, attachments or processes in the aggregate, in each case in
excess of any applicable insurance with respect to which the insurer has
admitted liability, and (ii) in the case of non-monetary Judgments, such
Judgment or Judgments (in the aggregate) would reasonably be expected to have a
Material Adverse Effect, in each case which Judgment is not stayed, released or
discharged within 30 days.
10.2 Acceleration of the Obligations. Upon or at any time after the
occurrence and during the continuance of an Event of Default, (i) the Agent may
(with the consent of the Majority Lenders) and shall at the direction of the
Majority Lenders terminate the Revolving Loan Commitments and/or (ii) the Agent
may (with the consent of the Majority Lenders) and shall at the direction of the
Majority Lenders declare all or any portion of the Obligations other than
Derivative Obligations (and all such Obligations shall thereupon become) at once
due and payable without presentment, demand, protest or further notice by Agent
or any Lender, and Borrower shall forthwith pay to Agent, the full amount of
such Obligations, provided, that upon the occurrence of an Event of Default
specified in Subsection 10.1.9 hereof, all of the Obligations shall become
automatically due and payable without declaration,
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notice or demand by Agent or any Lender, and the Revolving Loan Commitments
shall be terminated.
10.3 Other Remedies. Upon the occurrence and during the continuance
of an Event of Default, Agent shall have and may (and shall at the direction of
the Majority Lenders) exercise on behalf of the Lenders from time to time the
following rights and remedies:
10.3.1 All of the rights and remedies of a secured party under
the UCC or under other applicable law, and all other legal and equitable rights
to which Agent or Lenders may be entitled, all of which rights and remedies
shall be cumulative and shall be in addition to any other rights or remedies
contained in this Agreement or any of the other Loan Documents, and none of
which shall be exclusive.
10.3.2 The right to take immediate possession of the
Collateral, and to (i) require Borrower and each of its Subsidiaries to assemble
the Collateral, at Borrower's expense, and make it available to Agent at a place
designated by Agent which is reasonably convenient to both parties, and (ii)
enter any premises where any of the Collateral shall be located and to keep and
store the Collateral on said premises until sold (and if said premises be the
Property of Borrower or any Subsidiary of Borrower, Borrower agrees not to
charge, or permit any of its Subsidiaries to charge, Agent for storage thereof).
10.3.3 The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as Agent, in
its sole discretion, may deem advisable. Agent may, at Agent's option, disclaim
any and all warranties regarding the Collateral in connection with any such
sale. Borrower agrees that five (5) Business Days' written notice to Borrower or
any of its Subsidiaries of any public or private sale or other disposition of
Collateral shall be reasonable notice thereof, and such sale shall be at such
locations as Agent may designate in said notice. Agent shall have the right to
conduct such sales on Borrower's or any of its Subsidiaries' premises, without
charge therefor, and such sales may be adjourned from time to time in accordance
with applicable law. Agent shall have the right to sell, lease or otherwise
dispose of the Collateral, or any part thereof, for cash, credit or any
combination thereof, and Agent, on behalf of Lenders, may purchase all or any
part of the Collateral at public or, if permitted by law, private sale and, in
lieu of actual payment of such purchase price, may set off the amount of such
price against the Obligations. The proceeds realized from the sale of any
Collateral may be applied, after allowing two (2) Business Days for collection,
first to the costs, expenses and attorneys' fees incurred by Agent in collecting
the Obligations (other than Derivative Obligations), in enforcing the rights of
Agent and Lenders under the Loan Documents and in collecting, retaking,
completing, protecting, removing, storing, advertising for sale, selling and
delivering any Collateral, second to the interest due upon any of the
Obligations (other than Derivative Obligations), third, to the principal of the
Obligations (other than Derivative Obligations), and fourth to any other
Obligations, including Derivative Obligations and any costs of collection of any
Derivative Obligations. If any deficiency shall arise, Borrower and each
Guarantor shall remain jointly and severally liable to Agent and Lenders
therefor.
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10.3.4 Agent is hereby granted a license or other right to use,
without charge, Borrower's and each of its Subsidiary's labels, patents,
copyrights, licenses, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, consistent with Borrower's reasonable quality
control requirements, or any Property of a similar nature, as it pertains to the
Collateral, in completing, advertising for sale and selling any Collateral and
Borrower's and each of its Subsidiary's rights under all licenses and all
franchise agreements shall inure to Agent's benefit.
10.3.5 Agent may, at its option, require Borrower to deposit
with Agent funds equal to 105% of the sum of (x) the LC Amount and (y) all
unpaid LC Obligations and, if Borrower fails to promptly make such deposit,
Agent may advance such amount as a Revolving Credit Loan (whether or not an
Overadvance is created thereby). Each such Revolving Credit Loan shall be
secured by all of the Collateral and shall bear interest and be payable at the
same rate and in the same manner as Loans. Any such deposit or advance shall be
held by Agent as a reserve to fund future payments on such LC Guaranties and
future drawings against such Letters of Credit, including fees and charges
related to Letters of Credit and LC Guaranties. At such time as all LC
Guaranties have been paid or terminated and all Letters of Credit have been
drawn upon or expired, any amounts remaining in such reserve shall be applied
against any outstanding Obligations, or, if all Obligations have been
indefeasibly paid in full, returned to Borrower.
10.4 Set Off and Sharing of Payments. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, during the continuance of any Event of Default, each Lender is
hereby authorized by Borrower at any time or from time to time, with prior
written consent of Agent and with reasonably prompt subsequent notice to
Borrower (any prior or contemporaneous notice to Borrower being hereby expressly
waived) to set off and to appropriate and to apply any and all (i) balances held
by such Lender at any of its offices for the account of Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to Borrower or
its Subsidiaries), and (ii) other property at any time held or owing by such
Lender to or for the credit or for the account of Borrower or any of its
Subsidiaries, against and on account of any of the Obligations; provided, that
each Lender exercising such rights shall notify Agent thereof prior to exercise,
shall refrain from exercising such right until Agent shall have confirmed to
such Lender that such exercise will not prejudice the rights of the Lenders, and
any amount received as a result of the exercise of such rights shall be shared
in accordance with Subsection 3.8. Any Lender exercising a right to set off
shall, to the extent the amount of any such set off exceeds its Revolving Loan
Percentage of the amount set off, purchase for cash (and the other Lenders shall
sell) interests in each such other Lender's pro rata share of the Obligations as
would be necessary to cause such Lender to share such excess with each other
Lender in accordance with their respective Revolving Loan Percentages. Borrower
agrees, to the fullest extent permitted by law, that any Lender may exercise its
right to set off with respect to amounts in excess of its pro rata share of the
Obligations and upon doing so shall deliver such excess to Agent for the benefit
of all Lenders in accordance with the Revolving Loan Percentages.
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10.5 Remedies Cumulative; No Waiver. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings of
Borrower and its Subsidiaries contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule or in any Guaranty Agreement given to
Agent or any Lender or contained in any other agreement between any Lender and
Borrower or any of its Subsidiaries or between Agent and Borrower or any of its
Subsidiaries heretofore, concurrently, or hereafter entered into, shall be
deemed cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of Borrower herein contained. The failure
or delay of Agent or any Lender to require strict performance by Borrower or any
of its Subsidiaries of any provision of this Agreement or to exercise or enforce
any rights, Liens, powers, or remedies hereunder or under any of the aforesaid
agreements or other documents or security or Collateral shall not operate as a
waiver of such performance, Liens, rights, powers and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in full force
and effect until all Loans and other Obligations owing or to become owing from
Borrower or any of its Subsidiaries to Agent and each Lender have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrower or any of its Subsidiaries contained in this
Agreement or any of the other Loan Documents and no Event of Default by Borrower
under this Agreement or any other Loan Documents shall be deemed to have been
suspended or waived by Lenders, unless such suspension or waiver is by an
instrument in writing specifying such suspension or waiver and is signed by a
duly authorized representative of Majority Lenders or all Lenders (as required
by Section 11.10) or by Agent, at the direction of Majority Lenders or all
Lenders, as the case may be and directed to Borrower.
Section 11. THE AGENT
11.1 Authorization and Action. Each Lender hereby appoints and
authorizes Agent to take such action on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Lender hereby acknowledges that Agent shall not have by
reason of this Agreement assumed a fiduciary relationship in respect of any
Lender. In performing its functions and duties under this Agreement, Agent shall
act solely as agent of Lenders and shall not assume, or be deemed to have
assumed, any obligation toward, or relationship of agency or trust with or for,
Borrower or any of its Subsidiaries. As to any matters not expressly provided
for by this Agreement and the other Loan Documents (including without limitation
enforcement and collection of the Notes), Agent may, but shall not be required
to, exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, whenever such
instruction shall be requested by Agent or required hereunder, or a greater or
lesser number of Lenders if so required hereunder, and such instructions shall
be binding upon all Lenders; provided, that Agent shall be fully justified in
failing or refusing to take any action which exposes Agent to any liability or
which is contrary to this Agreement, the other Loan Documents or applicable law,
unless Agent is indemnified to its satisfaction by the other Lenders against any
and all liability and expense which it may incur by reason of taking or
continuing to take any such action. If Agent seeks the consent or approval of
the Majority Lenders (or a greater or lesser
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number of Lenders as required in this Agreement), with respect to any action
hereunder, Agent shall send notice thereof to each Lender and shall notify each
Lender at any time that the Majority Lenders (or such greater or lesser number
of Lenders) have instructed Agent to act or refrain from acting pursuant hereto.
11.2 Agent's Reliance, Etc. Neither Agent, any Affiliate of Agent,
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Agent: (i) may treat each Lender party hereto as
the holder of Obligations until Agent receives written notice of the assignment
or transfer or such lender's portion of the Obligations signed by such Lender
and in form reasonably satisfactory to Agent; (ii) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (iii)
makes no warranties or representations to any Lender and shall not be
responsible to any Lender for any recitals, statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Documents; (iv) shall not have any duty beyond Agent's customary practices in
respect of loans in which Agent is the only lender, to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or the other Loan Documents on the part of Borrower or any of
its Subsidiaries, to inspect the property (including the books and records) of
Borrower or any of its Subsidiaries, to monitor the financial condition of
Borrower or to ascertain the existence or possible existence or continuation of
any Default or Event of Default; (v) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto; (vi) shall not be liable to
any Lender for any action taken, or inaction, by Agent upon the instructions of
Majority Lenders pursuant to Section 11.1 hereof or refraining to take any
action pending such instructions; (vii) shall not be liable for any
apportionment or distributions of payments made by it in good faith pursuant to
Section 3 hereof; (viii) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate, message or other instrument or writing (which may be by telephone,
facsimile, telegram, cable or telex) believed in good faith by it to be genuine
and signed or sent by the proper party or parties; and (ix) may assume that no
Event of Default has occurred and is continuing, unless Agent has actual
knowledge of the Event of Default, has received notice from Borrower or
Borrower's independent certified public accounts stating the nature of the Event
of Default, or has received notice from a Lender stating the nature of the Event
of Default and that such Lender considers the Event of Default to have occurred
and to be continuing. In the event any apportionment or distribution described
in clause (vii) above is determined to have been made in error, the sole
recourse of any Person to whom payment was due but not made shall be to recover
from the recipients of such payments any payment in excess of the amount to
which they are determined to have been entitled.
11.3 Fleet and Affiliates. With respect to its commitment hereunder
to make Loans, Fleet shall have the same rights and powers under this Agreement
and the other Loan
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Documents as any other Lender and may exercise the same as though it were not
Agent; and the terms "Lender," "Lenders" or "Majority Lenders" shall, unless
otherwise expressly indicated, include Fleet in its individual capacity as a
Lender. Fleet and its Affiliates may lend money to, and generally engage in any
kind of business with, Borrower and its Subsidiaries and Affiliates, and any
Person who may do business with or own Securities of Borrower all as if Fleet
were not Agent and without any duty to account therefor to any other Lender.
11.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements referred to herein and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement. Agent shall not have any duty or responsibility, either
initially or on an ongoing basis, to provide any Lender with any credit or other
similar information regarding Borrower or any of its Subsidiaries.
11.5 Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrower), in accordance with their respective Aggregate
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement
or any other Loan Document or any action taken or omitted by Agent under this
Agreement; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share, as set forth above,
of any out-of-pocket expenses (including reasonable attorneys' fees) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower. The
obligations of Lenders under this Section 11.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Agent to Lenders, any Lender or any other Person,
including Borrower, any creditor of Borrower, a liquidator, administrator or
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse Agent
for all such amounts.
11.6 Rights and Remedies to be Exercised by Agent Only. Each Lender
agrees that, except as set forth in Subsection 10.4, no Lender shall have any
right individually (i) to realize upon the security created by this Agreement or
any other Loan Document, (ii) to enforce any provision of this Agreement or any
other Loan Document, or (iii) to make demand under this Agreement or any other
Loan Document.
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11.7 Agency Provisions Relating to Collateral. Each Lender authorizes
and ratifies Agent's entry into this Agreement and the Security Documents for
the benefit of Lenders. Each Lender agrees that any action taken by Agent with
respect to the Collateral in accordance with the provisions of this Agreement or
the Security Documents, and the exercise by Agent of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Lenders. Agent is hereby
authorized on behalf of all Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time prior to an Event of Default,
to take any action with respect to any Collateral or the Loan Documents which
may be necessary to perfect and maintain perfected Agent's Liens upon the
Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to (a) release
any Lien granted to or held by Agent upon any Collateral (i) upon termination of
the Agreement and payment and satisfaction of all Obligations; or (ii)
constituting property being sold or disposed of to a Person other than Borrower
or any of its Subsidiaries if Borrower certifies to Agent that the sale or
disposition is made in compliance with Subsection 8.2.5 hereof (and Agent may
rely conclusively on any such certificate, without further inquiry); or (iii)
constituting property in which Borrower or such Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; (iv) constituting
property subject to an operating lease permitted by Subsection 8.2.13; or (v) in
connection with any foreclosure sale or other disposition of Collateral after
the occurrence and during the continuation of an Event of Default or (vi) if
approved, authorized or ratified in writing by Agent at the direction of all
Lenders and (b) subordinate any Lien granted to Agent on Equipment if required
by the holder of any Indebtedness (including Capitalized Lease Obligations)
secured by Purchase Money Liens and Leases permitted hereunder. Upon request by
Agent at any time, Lenders will confirm in writing Agent's authority to release
particular types or items of Collateral pursuant hereto, or subordinate Liens on
Equipment. Agent shall have no obligation whatsoever to any Lender or to any
other Person to assure that the Collateral exists or is owned by Borrower or any
of its Subsidiaries or is cared for, protected or insured or has been encumbered
or that the Liens granted to Agent herein or pursuant to the Security Documents
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of its rights, authorities and powers granted or
available to Agent in this Section 11.7 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, but consistent with the provisions of this
Agreement, including given Agent's own interest in the Collateral as a Lender
and that Agent shall have no duty or liability whatsoever to any Lender.
11.8 Agent's Right to Purchase Commitments. Agent shall have the
right, but shall not be obligated, at any time upon written notice to any Lender
and with the consent of such Lender, which may be granted or withheld in such
Lender's sole discretion, to purchase for Agent's own account all of such
Lender's interests in this Agreement, the other Loan Documents and the
Obligations, for the face amount of the outstanding Obligations owed to such
Lender, including without limitation all accrued and unpaid interest and fees.
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11.9 Right of Sale, Assignment, Participations. Borrower hereby
consents to any Lender's participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this Agreement and any of the
other Loan Documents, or of any portion hereof or thereof, including, without
limitation, such Lender's rights, title, interests, remedies, powers, and duties
hereunder or thereunder subject to the terms and conditions set forth below:
11.9.1 Sales, Assignments. Each Lender hereby agrees that, with
respect to any sale or assignment (i) no such sale or assignment shall be for an
amount of less than $5,000,000, (ii) each such sale or assignment shall be made
on terms and conditions which are customary in the industry at the time of the
transaction, (iii) Agent and, in the absence of a Default or Event of Default,
Borrower, must consent, such consent not to be unreasonably withheld, to each
such assignment to a Person that is not an original signatory to this Agreement
or any Affiliate thereof, (iv) the assignee Lender shall pay to Agent a
processing and recordation fee of $3,500 and any reasonable out-of-pocket
attorneys' fees and expenses incurred by Agent in connection with any such sale
or assignment. After such sale or assignment has been consummated (x) the
assignee Lender thereupon shall become a "Lender" for all purposes of this
Agreement and (y) the assigning Lender shall have no further liability for
funding the portion of Revolving Loan Commitments assumed by such other Lender.
11.9.2 Participations. Any Lender may grant participations in
its extensions of credit hereunder to any other Lender or other lending
institution (a "Participant"), provided that (i) no such participation shall be
for an amount of less than $5,000,000, (ii) no Participant shall thereby acquire
any direct rights under this Agreement, (iii) no Participant shall be granted
any right to consent to any amendment, except to the extent any of the same
pertain to (1) reducing the aggregate principal amount of, or interest rate on,
or fees applicable to, any Loan or (2) extending the final stated maturity of
any Loan or the stated maturity of any portion of any payment of principal of,
or interest or fees applicable to, any of the Loans; provided, that the rights
described in this subclause (2) shall not be deemed to include the right to
consent to any amendment with respect to or which has the effect of requiring or
waiving any mandatory prepayment of any portion of any Loan or any amendment or
waiver of any Default or Event of Default, (iv) no sale of a participation in
extensions of credit shall in any manner relieve the originating Lender of its
obligations hereunder, (v) the originating Lender shall remain solely
responsible for the performance of such obligations, (vi) Borrower and Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (vii) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of Agent,
and, in the absence of a Default or an Event of Default, Borrower, which
consents shall not unreasonably be withheld and (viii) all amounts payable by
Borrower hereunder shall be determined as if the originating Lender had not sold
any such participation.
11.9.3 Certain Agreements of Borrower. Borrower agrees that (i)
it will use its best efforts to assist and cooperate with each Lender in any
manner reasonably requested by such Lender to effect the sale of participation
in or assignments of any of the Loan Documents or any portion thereof or
interest therein, including, without limitation, assisting in
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the preparation of appropriate disclosure documents and making members of
management available at reasonable times to meet with and answer questions of
potential assignees and Participants; and (ii) subject to the provisions of
Section 12.14 hereof, such Lender may disclose credit information regarding
Borrower to any potential Participant or assignee.
11.9.4 Non U.S. Resident Transferees. If, pursuant to this
Section 11.9, any interest in this Agreement or any Loans is transferred to any
transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof, the transferor Lender shall cause such
transferee (other than any Participant), and may cause any Participant,
concurrently with and as a condition precedent to the effectiveness of such
transfer, to (i) represent to the transferor Lender (for the benefit of the
transferor Lender, Agent, and Borrower) that under applicable law and treaties
no taxes will be required to be withheld by Agent, Borrower or the transferor
Lender with respect to any payments to be made to such transferee in respect of
the interest so transferred, (ii) furnish to the transferor Lender, Agent and
Borrower either United States Internal Revenue Service Form W-8ECI or United
States Internal Revenue Service Form W-8BEN (wherein such transferee claims
entitlement to complete exemption from United States federal withholding tax on
all interest payments hereunder), and (iii) agree (for the benefit of the
transferor Lender, Agent and Borrower) to provide the transferor Lender, Agent
and Borrower a new Form W-8ECI or Form W-8BEN upon the obsolescence of any
previously delivered form and comparable statements in accordance with
applicable United States laws and regulations and amendments duly executed and
completed by such transferee, and to comply from time to time with all
applicable United States laws and regulations with regard to such withholding
tax exemption.
11.10 Amendments. No amendment or waiver of any provision of this
Agreement or any other Loan Document (including without limitation any Note),
nor consent to any departure by Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Lenders
and Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that
no amendment, waiver or consent shall be effective, unless (i) in writing and
signed by each Lender, if such amendment, waiver or consent does any of the
following: (1) increases the aggregate Revolving Loan Commitments, or any
Lender's Revolving Loan Commitment, (2) reduces the principal of, or interest
on, any amount payable hereunder or under any Note, or any fees payable to
Lenders hereunder, other than those payable only to Fleet in its capacity as
Agent or Letter of Credit issuer, which may be reduced by Fleet unilaterally,
(3) decreases any interest rate payable hereunder or any fee payable to Lenders
hereunder, other than those payable to Fleet in its capacity as Agent or Letter
of Credit issuer, which may be reduced by Fleet unilaterally, (4) postpones any
date fixed for any payment of principal of, or interest on, any amounts payable
hereunder or under any Note, other than those payable only to Fleet in its
capacity as Agent, which may be postponed by Fleet unilaterally, (5) reduces the
number of Lenders that shall be required for Lenders or any of them to take any
action hereunder, (6) releases or discharge any Person liable for the
performance of any obligations of Borrower hereunder or under any of the Loan
Documents, (7) amends any provision of this Agreement that requires the consent
of all Lenders or consent to or waive any breach thereof, (8) amends the
definition of the term "Majority Lenders", (9) amends this Section 11.10, (10)
releases Collateral with a value in excess of $5,000,000,
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unless otherwise permitted pursuant to Section 11.7 hereof; or (11) increases
the advance rates contained in the definition of "Borrowing Base" to a level
greater than those set forth on the date hereof; or (12) amends the definitions
of "Borrowing Base" (or any component thereof) or "Availability Reserve" to make
such definitions less restrictive (provided that the foregoing shall not affect
Agent's discretion in determining eligibility) or (ii) in writing and signed by
Agent in addition to the Lenders required above to take such action, if such
action affects the rights or duties of Agent under this Agreement, any Note or
any other Loan Document.
11.11 Resignation of Agent; Appointment of Successor. Agent may resign
as Agent by giving not less than thirty (30) days prior written notice to the
Lenders and Borrower. If Agent shall resign under this Agreement, then, (i)
subject to the consent of Borrower (which consent shall not be unreasonably
withheld and which consent shall not be required during any period in which a
Default or an Event of Default exists), the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders or (ii) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following Agent's notice to the Lenders and Borrower of its resignation, then
Agent shall appoint a successor agent who shall serve as Agent until such time
as the Majority Lenders appoint a successor agent, subject to Borrower's consent
as set forth above. Upon its appointment, such successor agent shall succeed to
the rights, powers and duties of Agent and the term "Agent" shall mean such
successor effective upon its appointment, and the former Agent's rights, powers
and duties as Agent shall be terminated without any other or further act or deed
on the part of such former Agent or any of the parties to this Agreement. After
the resignation of any Agent hereunder, the provisions of this Section 11 shall
inure to the benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability for any
actions taken or not taken by it while it was an Agent under this Agreement.
11.12 Co-Agents. The co-Documentation Agents and co-Syndication Agents
shall have no right, duty, responsibility or obligation under this Agreement and
the other Loan Documents other than in their capacities as Lenders, and shall
have no fiduciary relationship to any Person.
SECTION 12. MISCELLANEOUS
12.1 Power of Attorney. Borrower hereby irrevocably designates,
makes, constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact), solely with respect to
the matters set forth in this Section 12.1, and Agent, or Agent's agent, may,
without notice to Borrower and in Borrower's or Agent's name, but at the cost
and expense of Borrower:
12.1.1 At such time or times as Agent or said agent, in its
sole discretion, may determine, endorse Borrower's name on any checks, notes,
acceptances, drafts, money orders or any other evidence of payment or proceeds
of the Collateral which come into the possession of Agent or under Agent's
control.
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12.1.2 At such time or times upon or after the occurrence and
during the continuance of an Event of Default (provided that the occurrence of
an Event of Default shall not be required with respect to clauses (iv), (viii)
and (ix) below), as Agent or its agent in its sole discretion may determine: (i)
demand payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge or release any of the Accounts or
other Collateral or any legal proceedings brought to collect any of the Accounts
or other Collateral; (iii) sell or assign any of the Accounts and other
Collateral upon such terms, for such amounts and at such time or times as Agent
deems advisable; (iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign Borrower's name
to a proof of claim in bankruptcy or similar document against any Account Debtor
or to any notice of lien, assignment or satisfaction of lien or similar document
in connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to Borrower and notify postal authorities to change the address
for delivery thereof to such address as Agent may designate; (vii) endorse the
name of Borrower upon any of the items of payment or proceeds relating to any
Collateral and deposit the same to the account of Agent on account of the
Obligations; (viii) endorse the name of Borrower upon any chattel paper,
document, instrument, invoice, freight xxxx, xxxx of lading or similar document
or agreement relating to the Accounts, Inventory and any other Collateral; (ix)
use Borrower's stationery and sign the name of Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to the Accounts, Inventory, Equipment and any other
Collateral; (xi) make and adjust claims under policies of insurance; and (xii)
do all other acts and things necessary, in Agent's determination, to fulfill
Borrower's obligations under this Agreement.
The power of attorney granted hereby shall constitute a power
coupled with an interest and shall be irrevocable.
12.2 Indemnity. Borrower hereby agrees to indemnify Agent and each
Lender (and each of their Affiliates) and hold Agent and each Lender (and each
of their Affiliates) harmless from and against any liability, loss, damage,
suit, action or proceeding ever suffered or incurred by any such Person
(including reasonable attorneys fees (or allocated costs of in-house counsel in
lieu of outside counsel) and legal expenses) as the result of the failure of
Borrower or any of its Subsidiaries to observe, perform or discharge Borrower's
duties hereunder or under any other Loan Document or arising out of, relating to
or in connection with this Agreement and the other Loan Documents or the use of
the proceeds thereof, except as to any such Person to the extent that such
liability, loss or damage is found in a non-appealable judgment by a court of
competent jurisdiction to have resulted from such Person's own negligence or
willful misconduct. In addition, Borrower shall defend Agent and each Lender
(and each of their Affiliates) against and save it harmless from all claims of
any Person with respect to the Collateral (except those resulting from the gross
negligence or intentional misconduct of any such Person). Notwithstanding any
contrary provision in this Agreement, the obligation of Borrower under this
Section 12.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.
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12.3 Sale of Interest. Borrower may not sell, assign or transfer any
interest in this Agreement, any of the other Loan Documents, or any of the
Obligations, or any portion thereof, including, without limitation, Borrower's
rights, title, interests, remedies, powers, and duties hereunder or thereunder
without the prior written consent of all Lenders, which consent by any Lender or
Lenders may be granted or denied in the sole discretion of such Lender.
12.4 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
12.5 Successors and Assigns. This Agreement, the Other Agreements and
the Security Documents shall be binding upon and inure to the benefit of the
successors and assigns of Borrower, Agent and each Lender permitted under
Section 11.9 hereof.
12.6 Cumulative Effect; Conflict of Terms. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in any of the other
Loan Documents by specific reference to the applicable provision of this
Agreement, if any provision contained in this Agreement is in direct conflict
with, or inconsistent with, any provision in any of the other Loan Documents,
the provision contained in this Agreement shall govern and control.
12.7 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which counterparts taken together shall constitute but one and the
same instrument.
12.8 Notices. Except as otherwise provided herein, all notices,
requests and demands to or upon a party hereto, to be effective, shall be in
writing and shall be sent by certified or registered mail, return receipt
requested, by personal delivery against receipt, by overnight courier or by
facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, delivered or received immediately when
delivered against receipt, one Business Day after deposit with an overnight
courier or, in the case of facsimile notice, when sent, addressed as follows:
If to Agent: Fleet Capital Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Loan Administration
Facsimile No.: (000) 000-0000
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With a copy to: Xxxxxx & Xxxxxxx
000 Xxxx 0xx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile No.: (000) 000-0000
If to Borrower: Mobile Mini, Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx Xxxx LLP
Two N. Central, 22nd Floor
Phoenix, Arizona 85004
Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon a Lender pursuant to Subsection 3.1.1 or 4.2.2
hereof shall not be effective until received by such Lender.
12.9 Consent. Whenever Agent's or Majority's Lenders' consent is
required to be obtained under this Agreement, any of the Other Agreements or any
of the Security Documents as a condition to any action, inaction, condition or
event, except as otherwise specifically provided herein, Agent or Majority
Lenders, as applicable, shall be authorized to give or withhold such consent in
their sole and absolute discretion.
12.10 Credit Inquiries. Borrower hereby authorizes and permits Agent
and each Lender to respond to usual and customary credit inquiries from third
parties concerning Borrower or any of its Subsidiaries.
12.11 Time of Essence. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.
12.12 Entire Agreement. This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or written.
12.13 Interpretation. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by
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any court or other governmental or judicial authority by reason of such party
having or being deemed to have structured or dictated such provision.
12.14 Confidentiality. Agent and each Lender shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement in
accordance with Agent's and such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any governmental
authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this Section
12.14.
12.15 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN
NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN LOS
ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT IF
ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN
CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND
PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE
ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT
WITH THE LAWS OF CALIFORNIA. AS PART OF THE CONSIDERATION FOR NEW VALUE
RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF
BUSINESS OF BORROWER, AGENT OR ANY LENDER, BORROWER HEREBY CONSENTS AND AGREES
THAT THE SUPERIOR COURT OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT AGENT'S
OPTION, THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA,
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN BORROWER ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND
OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL
RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
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POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT
THE RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY
JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
12.16 WAIVERS BY BORROWER. BORROWER WAIVES (i) THE RIGHT TO TRIAL BY
JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE
LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND
PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY,
RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL
PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND
GUARANTIES AT ANY TIME HELD BY AGENT OR ANY LENDER ON WHICH BORROWER MAY IN ANY
WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY
DO IN THIS REGARD; (iii) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF
THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (iv) THE BENEFIT OF
ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (v) NOTICE OF ACCEPTANCE
HEREOF. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT
AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE
DEALINGS WITH BORROWER. BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
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IN WITNESS WHEREOF, this Loan and Security Agreement has been duly executed
on the day and year specified at the beginning of this Agreement.
BORROWER:
MOBILE MINI, INC., a Delaware corporation
/s/ Xxxxxxxx Xxxxxxxxxxxx
Title: Executive Vice President
AGENT:
FLEET CAPITAL CORPORATION,
a Rhode Island corporation, as Agent
By:
-------------------------------
Name: Xxxxxxx Xxx Xxxxxxxxxx
Title: Senior Vice President
Signature page to Loan and Security Agreement
IN WITNESS WHEREOF, this Loan and Security Agreement has been duly
executed on the day and year specified at the beginning of this Agreement.
BORROWER:
MOBILE MINI, INC., a Delaware corporation
By:
-------------------------------
Name: Xxxxxxxx Xxxxxxxxxxxx
Title: Executive Vice President
AGENT:
FLEET CAPITAL CORPORATION,
a Rhode Island corporation, as Agent
/s/ Xxxxxxx Xxx Xxxxxxxxxx
Title: Senior Vice President
Signature page to Loan and Security Agreement
CO-SYNDICATION AGENTS:
BANK ONE, NA,
with its main office in Chicago, Illinois,
as Co-Syndication Agent
/s/ Xxxxx Xxxxxxxx
Title: First Vice President
XX XXXXXX CHASE BANK,
as Co-Syndication Agent
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
Signature page to Loan and Security Agreement
CO-SYNDICATION AGENTS:
BANK ONE, NA,
with its main office in Chicago, Illinois,
as Co-Syndication Agent
By:
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: First Vice President
XX XXXXXX XXXXX BANK,
as Co-Syndication Agent
/s/ Xxxxxxxx X. Xxxxx
Title: Vice President
Signature page to Loan and Security Agreement
CO-DOCUMENTATION AGENTS:
BANK OF AMERICA, N.A.,
AS CO-DOCUMENTATION AGENT
/s/ Xxxxxxx Xxxx
Title: Senior Vice President
WASHINGTON MUTUAL BANK,
AS CO-DOCUMENTATION AGENT
By:
-------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Signature page to Loan and Security Agreement
CO-DOCUMENTATION AGENTS:
BANK OF AMERICA, N.A.,
AS CO-DOCUMENTATION AGENT
By: __________________________________
Name: Xxxxxxx Xxxx
Title: Senior Vice President
WASHINGTON MUTUAL BANK,
AS CO-DOCUMENTATION AGENT
/s/ Xxxxx X. Xxxx
Title: Vice President
Signature page to Loan and Security Agreement
LENDERS:
FLEET CAPITAL CORPORATION
/s/ Xxxxxxx Xxx Xxxxxxxxxx
Title: Senior Vice President
Revolving Loan Commitment: $32,500,000
Signature page to Loan and Security Agreement
BANK ONE, NA,
with its main office in Chicago, Illinois
/s/ Xxxxx Xxxxxxxx
Title: First Vice President
Revolving Loan Commitment: $30,000,000.00
Signature page to Loan and Security Agreement
XX XXXXXX XXXXX BANK
/s/ Xxxxxxxx X. Xxxxx
Title: Vice President
Revolving Loan Commitment: $30,000,000.00
Signature page to Loan and Security Agreement
BANK OF AMERICA, N.A.
/s/ Xxxxxxx Xxxx
Title: Senior Vice President
Revolving Loan Commitment: $30,000,000.00
Signature page to Loan and Security Agreement
WASHINGTON MUTUAL BANK
/s/ Xxxxx X. Xxxx
Title: Vice President
Revolving Loan Commitment: $25,000,000.00
Signature page to Loan and Security Agreement
FIRST UNION NATIONAL BANK
/s/ Xxxx Xxxxxx
Title: Senior Vice President
Revolving Loan Commitment: $22,500,000.00
Signature page to Loan and Security Agreement
DEUTSCHE FINANCIAL SERVICES CORP.
/s/ Xxxxxx Xxxxxxxx
Title: Vice President
Revolving Loan Commitment: $17,500,000.00
Signature page to Loan and Security Agreement
U.S. BANK NATIONAL ASSOCIATION
/s/ Xxxxxx X. Xxxxxx
Title: Vice President
Revolving Loan Commitment: $17,500,000.00
Signature page to Loan and Security Agreement
PNC BANK, NATIONAL ASSOCIATION
/s/ Xxxxxxxx Xxxxxxxxx
Title: Vice President
Revolving Loan Commitment: $15,000,000.00
Signature page to Loan and Security Agreement
ALLFIRST BANK
/s/ Xxxxx X. Xxxxxxx
Title: VP
Revolving Loan Commitment: $15,000,000.00
Signature page to Loan and Security Agreement
THE PROVIDENT BANK
/s/ Xxxxxxxx X. Xxxxxx
Title: Vice President
Revolving Loan Commitment: $10,000,000.00
Signature page to Loan and Security Agreement
BANK LEUMI USA
/s/ Xxxxxxx Xxxxxxx
Title: Vice President
Revolving Loan Commitment: $5,000,000.00
Signature page to Loan and Security Agreement
APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of February
11, 2002, by and among FLEET CAPITAL CORPORATION, individually and as Agent, the
other financial institutions which are or become parties thereto and MOBILE
MINI, INC., a Delaware corporation, (a) the terms Certificated Security, Chattel
Paper, Commercial Tort Claims, Deposit Account, Document, Electronic Chattel
Paper, Financial Asset, Fixture, General Intangibles, Goods, Instruments,
Inventory, Investment Property, Letter-of-Credit Right, Payment Intangibles,
Proceeds, Security, Security Entitlement, Software, Supporting Obligations and
Tangible Chattel Paper and Uncertificated Security have the respective meanings
assigned thereto under the UCC (as defined below); (b) all terms indicating
Collateral having the meanings assigned thereto under the UCC shall be deemed to
mean such Property, whether now owned or hereafter created or acquired by
Borrower or any Guarantor or in which Borrower or any Guarantor now has or
hereafter acquires any interest; (c) capitalized terms which are not otherwise
defined have the respective meanings assigned thereto in said Loan and Security
Agreement; and (d) the following terms shall have the following meanings (terms
defined in the singular to have the same meaning when used in the plural and
vice versa):
"Account Debtor" - any Person who is or may become obligated on or
under or on account of any Account, Contract Right, Chattel Paper or General
Intangible.
"Account" - the meaning assigned under the UCC and all rights to
payments under leases and Chattel Paper.
"Acquisition" - (i) the acquisition by Borrower or any of its
Subsidiaries of all of the issued and outstanding Securities or other equity
interests of a Person, (ii) the acquisition by Borrower or any of its
Subsidiaries of all or substantially all of the assets of a Person or a line of
business of a Person or (iii) the merger or consolidation of Borrower or any of
its Subsidiaries with a Person other than a Person that was a Subsidiary of
Borrower or such Subsidiary immediately prior to such merger.
"Affiliate" - a Person (other than a Subsidiary): (i) which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, a Person; (ii) which beneficially owns or holds
15% or more of any class of the Voting Stock of a Person; or (iii) 15% or more
of the Voting Stock (or in the case of a Person which is not a corporation, 15%
or more of the equity interest) of which is beneficially owned or held by a
Person or a Subsidiary of a Person.
"Agent" - Fleet in its capacity as agent for the Lenders under the
Agreement and its successors and assigns, including any successor in that
capacity appointed pursuant to Subsection 11.11.
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"Aggregate Percentage" - with respect to each Lender, the percentage
equal to the quotient of (i) such Lender's Revolving Loan Commitment divided by
(ii) the aggregate of all Revolving Loan Commitments.
"Agreement" - the Loan and Security Agreement referred to in the
first sentence of this Appendix A, all Exhibits and Schedules thereto and this
Appendix A, as each of the same may be amended from time to time.
"Applicable Margin" - from the Closing Date to, but not including,
the first Adjustment Date (as hereinafter defined) the percentages set forth
below with respect to the Base Rate Portion and the LIBOR Portion:
Base Rate Portion .25%
LIBOR Portion 2.00%
The percentages set forth above will be adjusted on the first day of
the month following receipt by Agent from Borrower of the financial statements
required to be delivered pursuant to Subsection 8.1.3(iii) of the Agreement for
each fiscal quarter ended on the last day of March, June, September and December
during the Term, commencing with the quarter ending June 30, 2002 (each such
date an "Adjustment Date"), effective prospectively, by reference to the Debt
Ratio for the four quarters most recently ending in accordance with the
following:
Debt Ratio Base Rate Portion LIBOR Portion
---------- ----------------- -------------
> or = to 4.0:1 .75% 2.50%
> or = to 3.5:1 but <4.0:1 .50% 2.25%
> or = to 3.0:1 but <3.5:1 .25% 2.00%
> or = to 2.5:1 but <3.0:1 0% 1.75%
<2.5:1 0% 1.50%
provided that, (i) if Borrower's audited financial statements for any fiscal
year delivered pursuant to Subsection 8.1.3(i) of the Agreement reflect a Debt
Ratio that yields a different Applicable Margin than that yielded by the
quarterly financial statements previously delivered pursuant to Subsection
8.1.3(iii) of the Agreement for the last quarter of such fiscal year, the
Applicable Margin shall be readjusted retroactive to the preceding Adjustment
Date and (ii) if Borrower fails to deliver the financial statements required to
be delivered pursuant to Subsection 8.1.3(i) or Subsection 8.1.3(iii) of the
Agreement on or before the due date thereof, the interest rate shall
automatically adjust to the highest interest rate set forth above, effective
prospectively from such due date until the next Adjustment Date.
A-2
"Appraiser" - an appraiser employed by Agent or an independent third
party appraiser engaged by Agent, at Borrower's expense.
"Availability" - the amount of additional money which Borrower is
entitled to borrow from time to time as Revolving Credit Loans, such amount
being the difference derived when the sum of the principal amount of Revolving
Credit Loans then outstanding (including any amounts which Agent or any Lender
may have paid for the account of Borrower pursuant to any of the Loan Documents
and which have not been reimbursed by Borrower), the LC Amount, all unpaid LC
Obligations, the Availability Reserve and any other reserves is subtracted from
the Borrowing Base. If the amount outstanding is equal to or greater than the
Borrowing Base, Availability is zero (0).
"Availability Reserve" - a reserve against Availability equal to
$10,000,000.
"Bank" - Fleet National Bank.
"Base Rate" - the rate of interest announced or quoted by Bank from
time to time as its prime rate for commercial loans, whether or not such rate is
the lowest rate charged by Bank to its most preferred borrowers; and, if such
prime rate for commercial loans is discontinued by Bank as a standard, a
comparable reference rate designated by Bank as a substitute therefor shall be
the Base Rate.
"Base Rate Advance" - any Revolving Credit Loan bearing interest
computed by reference to the Base Rate.
"Base Rate Portion" - that portion of the Revolving Credit Loans
that is subject to interest computed by reference to the Base Rate.
"Borrower" - Mobile Mini, Inc., a Delaware corporation with its
chief executive office and principal place of business at 0000 Xxxxx Xxxxxx
Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000.
"Borrowing Base" - as at any date of determination thereof, an
amount equal to the lesser of:
(i) the Revolving Credit Maximum Amount; or
(ii) an amount equal to the sum of
(A) up to eighty-five percent (85%) of the net amount of Eligible
Accounts; plus
(B) up to ninety percent (90%) of Eligible Container Fleet
Inventory; plus
(C) up to seventy percent (70%) of Eligible Trailer Fleet Inventory;
plus
A-3
(D) the lesser of (i) $15,000,000 or (ii) the sum of
(a) up to ninety percent (90%) of Eligible Container
Inventory Held for Sale; plus
(b) up to the lesser of (x) $2,500,000 or (y) ninety
percent (90%) of Eligible Work-in-Process
Container Inventory; plus
(c) up to seventy-five percent (75%) of Eligible
Primary Raw Materials Inventory; plus
(d) up to sixty percent (60%) of Eligible Other Raw
Materials Component Inventory; plus
(E) the lesser of (i) $25,000,000 and (ii) the sum of (a) up to
eighty percent (80%) of the value of Eligible Machinery and Equipment; plus (b)
up to sixty percent (60%) of the value of the Specified Real Property.
For purposes of calculating the components of the Borrowing Base,
(1) the net amount of Eligible Accounts at any time shall be the face amount of
such Eligible Accounts less any and all returns, rebates, discounts (which may,
at Agent's option, be calculated on shortest terms), service charges, customer
deposits, credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time, (2) the amount of Eligible Inventory shall be
determined on a first-in, first-out basis; (3) Inventory "cost" shall be
determined in a manner consistent with Borrower's current and historical
accounting practices unless otherwise specifically provided in this Agreement,
(4) the value of Eligible Machinery and Equipment and Specified Real Property
shall be determined on the basis of the orderly liquidation value of such
Property based on the most recent appraisal received by Agent from the
Appraiser; and (5) orderly liquidation value of Inventory shall be based on the
most recent appraisal received by Agent from the Appraiser.
"Borrowing Base Certificate" - a certificate by a senior financial
officer of Borrower, substantially in the form of Exhibit 8.1.4 (or another form
acceptable to Agent) setting forth the calculation of the Borrowing Base,
including a calculation of each component thereof, all in such detail as shall
be satisfactory to Agent. All calculations of the Borrowing Base in connection
with the preparation of any Borrowing Base Certificate shall originally be made
by Borrower and certified to Agent; provided, that Agent shall have the right to
review and adjust, in the exercise of its reasonable credit judgment, any such
calculation after giving notice thereof to Borrower, (1) to reflect its
reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement.
"Business Day" - (i) when used with respect to the LIBOR option,
shall mean a day on which dealings may be effected in deposits of United States
Dollars in the London interbank foreign currency deposits market and on which
Bank is conducting and other banks may conduct business in London, England, in
the State of California and (ii) when used with respect to any other provision
of the Agreement, any day excluding Saturday, Sunday and any
A-4
day which is a legal holiday under the laws of the State of California or is a
day on which banking institutions located in such state are closed.
"Capital Expenditures" - expenditures made or liabilities incurred
for the acquisition of any fixed assets (including but not limited to
containers) or improvements, replacements, substitutions or additions thereto
which have a useful life of more than one year, including the total principal
portion of Capitalized Lease Obligations and that portion of Investments
allocable to property, plant or equipment. Capital Expenditures shall exclude
(i) new and used manufactured or remanufactured portable container Inventory
held for sale, (ii) proceeds of a Casualty Loss applied to the repair or
replacement of the property affected by the Casualty Loss and (iii) Inventory or
Equipment acquired in a Permitted Acquisition.
"Capitalized Lease Obligation" - any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"Cash Equivalents" means either of the following, so long as the
same are maintained in accounts in which Agent has a perfected security
interest: (i) securities issued, guarantied or insured by the United States or
any of its agencies and having maturities of not more than one year; and (ii)
certificates of deposit having maturities of not more than one year issued by
Agent, any Lender or by a U.S. federal or state chartered commercial bank of
recognized standing whose capital and unimpaired surplus is in excess of
$100,000,000 and whose short-term commercial paper rating, or that of its parent
holding company, is at least A-2 or the equivalent by Standard & Poor's
Corporation and at least P-2 or the equivalent by Xxxxx'x Investors Services,
Inc.
"Casualty Loss" - (i) the loss, damage, or destruction of any asset
owned or used by Borrower or any of its Subsidiaries, (ii) the condemnation,
confiscation, or other taking, in whole or in part, of any such asset, or (iii)
the diminishment of such asset so as to render use for its intended purpose
impracticable or unreasonable.
"Certificate of Title - a certificate of title, certificate of
ownership or other registration certificate issued or required to be issued for
any asset under the certificate of title or similar laws of any jurisdiction.
"Change of Control" - either: (i) other than members of management
as of the Closing Date, any "person" (as such term is used in Subsections 13(d)
and 14(d) of the Securities and Exchange Act of 1934, as amended) on or after
the Closing Date is or becomes a "beneficial owner" (as defined in Rule 13d-3
under such Act), directly or indirectly, of Securities of Borrower representing
15% or more of the combined voting power of Borrower's then-outstanding
Securities; or (ii) the existing directors for any reason cease to constitute
75% of Borrower's Board of Directors or (iii) any Guarantor ceases to be a
wholly-owned Subsidiary of Borrower, except as expressly permitted by the Loan
Documents. For purposes of this definition, "existing directors" means (x)
individuals constituting Borrower's Board of Directors on the Closing Date, and
(y) any subsequent director whose election by the Board of Directors or
nomination for election by Borrower's shareholders was approved by a
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vote of at least 75% of the directors then in office which directors either were
directors on the Closing Date or whose election or nomination for election was
previously so approved.
"Closing Date" - the date on which all of the conditions precedent
in Section 9 of the Agreement are satisfied and the initial Loan is made or the
initial Letter of Credit or LC Guaranty is issued under the Agreement.
"Collateral" - all of the Property and interests in Property
described in Section 5 of the Agreement, and all other Property and interests in
Property that now or hereafter secure the payment and performance of any of the
Obligations or any Guaranty Agreement.
"Collateral Access Agreement" - any landlord waivers, mortgagee
waivers, bailee letters or any similar acknowledgment agreements of any
warehouseman or processor in possession of Inventory, in form and substance
approved by Agent.
"Computer Hardware and Software" - all rights (including rights as
licensee and lessee) with respect to (i) computer and other electronic data
processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever); (iii)
any firmware associated with any of the foregoing; and (iv) any documentation
for hardware, Software and firmware described in clauses (i), (ii) and (iii)
above, including flow charts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes.
"Consolidated" - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
"Consolidated EBITDA" - for a period, the Consolidated net income of
Borrower and its Subsidiaries (excluding extraordinary gains, non-cash
extraordinary losses and extraordinary losses arising from prepayments of
Indebtedness incurred on or about the Closing Date in connection with the
initial funding of the Loans) for the period (i) plus all Interest Expense,
income tax expense, depreciation and amortization (including amortization of any
goodwill or other intangibles) for the period, (ii) less gains or plus losses
attributable to any fixed asset sales (excluding sales of containers held for
lease) in the period and (iii) plus or minus any other non-cash charges which
have been subtracted or added in calculating Consolidated net income. For all
purposes other than calculating Consolidated Net Cash Flow, Consolidated EBITDA
for any such period shall be calculated by giving pro forma effect to any
Permitted Acquisition during such period, as if such Acquisition had been
consummated on the first day of such period, as long as Borrower shall have
delivered to Agent audited financial statements for such period for the Person
or assets acquired.
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"Consolidated Net Cash Flow" - for a period, Consolidated EBITDA
less the sum of (i) Unfinanced Capital Expenditures, during such period, plus
(ii) taxes paid in cash during such period and plus (iii) Restricted Payments
paid in cash during such period (other than Restricted Payments paid by a
Subsidiary of Borrower to Borrower or a Guarantor).
"Contingent Obligation" - any direct, indirect, contingent or
non-contingent guaranty or obligation for the Indebtedness of another, except
endorsements in the ordinary course of business.
"Contract Right" - any right to payment under a contract for the
sale or lease of goods or the rendering of services, which right is at the time
not yet earned by performance.
"Debt Ratio" - as of any date of determination, the ratio of (i)
Funded Debt as of such date to (ii) Consolidated EBITDA for the four fiscal
quarters ending on such date.
"Default" - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an Event of
Default.
"Default Rate" - as defined in Subsection 2.1.2 of the Agreement.
"Derivative Obligations" - every obligation of a Person under any
forward contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency or
exchange rates or valuations.
"Dominion Account" - a special bank account or accounts of Agent
established by Borrower pursuant to Subsection 6.2.4 of the Agreement at a bank
selected by Borrower, but acceptable to Agent in its reasonable discretion, and
over which Agent shall have sole and exclusive access and control for withdrawal
purposes.
"Eligible Account" - an Account of Borrower or a Guarantor arising
in the ordinary course of the business of Borrower or such Guarantor from the
sale of goods, the lease of goods or rendition of services which Agent, in its
reasonable credit judgment, deems to be an Eligible Account less all returns,
rebates, discounts (which may at Agent's option be calculated on shortest
terms), service charges, customer deposits, credits, allowances or excise taxes
of any nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts. Without limiting the
generality of the foregoing, unless otherwise approved in writing by Agent, no
Account shall be an Eligible Account if:
(i) it arises out of a sale made or services rendered
by Borrower or a Guarantor to a Subsidiary of Borrower or an
Affiliate of Borrower or to a Person controlled by an Affiliate of
Borrower; or
(ii) it is an Account that has payment terms longer
than 45 days from the date of invoice; provided, however, that
$200,000 may be
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considered Eligible Accounts with payment terms longer than 45 days
but no longer than 90 days from the date of the invoice;
(iii) it remains unpaid more than 90 days after the
original invoice date; or
(iv) it is owed by an Account Debtor and the total
unpaid Accounts of such Account Debtor exceed 10% of the net amount
of all Eligible Accounts, but only to the extent of such excess; or
(v) any covenant, representation or warranty contained
in the Agreement with respect to such Account has been breached; or
(vi) the Account Debtor is also a creditor or supplier
of Borrower or any Subsidiary of Borrower, or the Account Debtor has
disputed liability with respect to such Account, or the Account
Debtor has made any claim with respect to any other Account due from
such Account Debtor to Borrower or any Subsidiary of Borrower, or
the Account otherwise is or may become subject to right of setoff by
the Account Debtor, provided, that any such Account shall be
eligible to the extent such amount thereof exceeds such contract,
dispute, claim, setoff or similar right; or
(vii) the Account Debtor has commenced a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the Account Debtor in an
involuntary case under the federal or other similar bankruptcy,
reorganization or insolvency laws, as now constituted or hereafter
amended, or any other petition or other application for relief under
the federal or other similar bankruptcy reorganization or insolvency
laws, as now constituted or hereafter amended, has been filed
against the Account Debtor, or if the Account Debtor has failed,
suspended business, ceased to be Solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets
or affairs; or
(viii) it arises from a sale made or services rendered
to an Account Debtor outside the United States, unless the sale is
either (1) to an Account Debtor located in Ontario or any other
province of Canada in which the Personal Property Security Act has
been adopted in substantially the same form as currently in effect
in Ontario or (2) on letter of credit, guaranty or acceptance terms,
in each case acceptable to Agent in its reasonable credit judgment;
or
(ix) (1) it arises from a sale to the Account Debtor on
a xxxx-and-hold or consignment basis; or (2) it is subject to a
reserve established by
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Borrower or any of its Subsidiaries for potential returns or
refunds, to the extent of such reserve; or
(x) the Account Debtor is the United States of
America, any State or any political subdivision or department,
agency or instrumentality thereof, unless Borrower or any such
Guarantor, as applicable, assigns its right to payment of such
Account to Agent, in a manner satisfactory to Agent, in its
reasonable credit judgment, so as to comply with the Assignment of
Claims Act of 1940 (31 U.S.C. Section 203 et seq., as amended) or
complies with any similar applicable state or local law as Agent may
require; or
(xi) it is not at all times subject to Agent's duly
perfected, first priority security interest and to no other Lien
that is not a Permitted Lien; or
(xii) the goods giving rise to such Account have not
been delivered to and accepted by the Account Debtor or the services
giving rise to such Account have not been performed by Borrower or
the applicable Guarantor and accepted by the Account Debtor or the
Account otherwise does not represent a final sale; or
(xiii) the Account is evidenced by an instrument of any
kind, or has been reduced to judgment; or
(xiv) Borrower or a Subsidiary of Borrower has made any
agreement with the Account Debtor for any deduction therefrom,
except for discounts or allowances which are made in the ordinary
course of business for prompt payment and which discounts or
allowances are reflected in the calculation of the face value of
each invoice related to such Account; or
(xv) more than 50% of the Accounts owing from the
Account Debtor are not Eligible Accounts hereunder; provided that
Agent may, in its sole discretion, reduce such percentage to a
lesser percentage, but not below 25%; or
(xvi) the Account is subject to any progress payment or
other similar advance made by or for the benefit of the applicable
Account Debtor; or
(xvii) the Account evidences a lease to an Account
Debtor that is an individual and the aggregate amount of such
Accounts included as Eligible Accounts hereunder equals or exceeds
$750,000; or
(xvii) the Account evidences a sale to an Account Debtor
that is an individual.
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"Eligible Container Fleet Inventory" - Eligible Goods Inventory of
Borrower and the Guarantors consisting of new and used manufactured or
remanufactured portable and ISO containers and portable mobile offices, valued
at the lower of Borrower and its Subsidiaries' cost or orderly liquidation
value, except for custom containers that are pre-sold and ISO containers that
are pre-sold, which will be valued at the lower of Borrower's cost or sales
invoice, , held by Borrower or a Guarantor for intended lease or rental by
Borrower and its Subsidiaries to third party end users.
"Eligible Container Inventory Held For Sale" - Eligible Goods
Inventory of Borrower and the Guarantors consisting of new and used manufactured
or remanufactured portable and ISO containers, valued at the lower of Borrower
and Subsidiaries' cost or orderly liquidation value, except for custom
containers that are pre-sold and ISO containers that are pre-sold, which will be
valued at the lower of Borrower's cost or sales invoice, held by Borrower or a
Guarantor for intended sale to third parties, containers used by Borrower and
the Guarantors, containers temporarily out of service and otherwise
unrefurbished ISO units, whether or not held for sale.
"Eligible Goods Inventory" - Inventory of Borrower and the
Guarantors which Agent, in its reasonable credit judgment, deems to be Eligible
Goods Inventory. In determining the amount to be so included, Inventory shall be
valued at the lower of cost or orderly liquidation value, except for custom
containers that are pre-sold and ISO containers that are pre-sold, which will be
valued at the lower of Borrower's cost or sales invoice, . Unless otherwise
approved in writing by Agent, no Inventory shall be deemed Eligible Goods
Inventory if:
(a) it is not owned solely by Borrower or a Guarantor or Borrower
or a Guarantor does not have good, valid and marketable title thereto; or
(b) it is not located in the United States; or
(c) it (i) is not subject to valid, current rental or lease
agreements between Borrower or a Guarantor and the renters or lessees thereof or
(ii) if not leased, is not located on property owned or leased by Borrower or a
Guarantor or is not located in a contract warehouse, subject to a Collateral
Access Agreement executed by the mortgagee, the lessor or the contract
warehouseman, as the case may be, and segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises; provided,
however, that as long as Borrower has received Collateral Access Agreements to
the extent necessary to comply with Subsection 8.1.6 of the Agreement, Inventory
will not be deemed ineligible solely because it is located on property not
subject to a Collateral Access Agreement, but Agent shall reserve one month's
rent under the applicable lease for the premises against the Borrowing Base; or
(d) it is not subject to a valid and perfected first priority Lien
in favor of Agent except, with respect to Inventory stored at sites described in
clause (c) above, for Liens for unpaid rent or normal and customary warehousing
charges; or
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(e) it consists of goods returned or rejected by Borrower or a
Subsidiary's or Affiliate's customers or goods in transit to third parties
(other than to warehouse sites covered by a Collateral Access Agreement); or
(f) it is not first-quality finished goods or work in process, is
obsolete, or does not otherwise conform to the representations and warranties
contained in the Loan Documents; or
(g) it is subject to a lease which should be classified as a
capital lease under GAAP or contains a contains a purchase option for an amount
less than the amount equal to the net book value; or
(h) Inventory which is located on Borrower's premises and is being
repaired; or
(i) Inventory which can not be located at the time of Borrower's
physical inventory; or
(j) it is Eligible Raw Materials Inventory or Eligible Machinery
and Equipment.
"Eligible Inventory" - Eligible Goods Inventory and Eligible Raw
Materials Inventory.
"Eligible Machinery and Equipment" - Equipment of Borrower or a
Guarantor which Agent, in its reasonable credit judgment, deems to be Eligible
Machinery and Equipment. Without limiting the generality of the foregoing,
unless otherwise approved in writing by Agent, no Equipment shall be deemed
Eligible Machinery and Equipment if:
(a) it is not owned solely by Borrower or a Guarantor or Borrower
or a Guarantor does not have good, valid and marketable title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by Borrower or a
Guarantor subject to a Collateral Access Agreement executed by the lessor;
provided, however, that as long as Borrower has received Collateral Access
Agreements to the extent necessary to comply with Subsection 8.1.6 of the
Agreement, Equipment will not be deemed ineligible solely because it is located
on property not subject to a Collateral Access Agreement, but Agent shall
reserve one month's rent under the applicable lease of the premises against the
Borrowing Base; or
(d) it is not subject to a valid and perfected first priority Lien
in favor of Agent except, with respect to Equipment stored at sites described in
clause (c) above, for Liens for unpaid rent or normal and customary warehousing
charges; or
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(e) it is not of a like kind or type of Equipment that has been
appraised and it has not been appraised by the Appraiser with an appraisal in
form and substance satisfactory to Agent and reasonably satisfactory to Majority
Lenders.
"Eligible Other Raw Materials Component Inventory" - Eligible Raw
Materials Inventory, valued at Borrowers' cost, of Borrower or a Guarantor
purchased from third parties consisting of plumbing, drywall, electrical
components, insulation materials, HVAC materials, doors and windows, and
fasteners, and located on the Closing Date or thereafter at Borrower's Maricopa
facility or such other facility of Borrower or a Guarantor as to which Borrower
implements a perpetual inventory accounting system comparable to that of the
Maricopa facility.
"Eligible Primary Raw Materials Inventory" - Eligible Raw Materials
Inventory, valued at Borrowers' cost (except for fiscal year end calculations
where the value will be the lower of Borrower's cost or market), of Borrower or
a Guarantor consisting of steel, lumber, plywood and paint, and located on the
Closing Date or thereafter at Borrower's Maricopa facility or such other
facility of Borrower as to which Borrower implements a perpetual inventory
accounting system comparable to that of the Maricopa facility.
"Eligible Raw Materials Inventory" - Eligible Primary Raw Materials
Inventory or Eligible Other Raw Materials Inventory which Agent, in its
reasonable credit judgment, deems to be Eligible Raw Materials Inventory.
Without limiting the generality of the foregoing, unless otherwise approved in
writing by Agent, no Inventory shall be deemed Eligible Raw Materials Inventory
if:
(a) it is not owned solely by Borrower or a Guarantor or Borrower
or a Guarantor does not have good, valid and marketable title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by Borrower or a
Guarantor or in a contract warehouse, subject to a Collateral Access Agreement
executed by the lessor or the contract warehouseman, as the case may be, and
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises; provided, however, that as long as Borrower has received
Collateral Access Agreements to the extent necessary to comply with Subsection
8.1.6 of the Agreement, Inventory will not be deemed ineligible solely because
it is located on property not subject to a Collateral Access Agreement, but
Agent shall reserve equal to one month's rent under the applicable lease of the
premises against the Borrowing Base.; or
(d) it is not subject to a valid and perfected first priority Lien
in favor of Agent except, with respect to Inventory stored at sites described in
clause (c) above, for Liens for unpaid rent or normal and customary warehousing
charges; or
A-12
(e) it is goods returned or rejected by Borrower or a Guarantor's
customers or goods in transit to third parties (other than to warehouse sites
covered by a Collateral Access Agreement); or
(f) it is not first-quality raw materials, is obsolete or slow
moving, or does not otherwise conform to the representations and warranties
contained in the Credit Documents; or
(g) it is Eligible Goods Inventory or Eligible Machinery and
Equipment; or
(h) it is Inventory being repaired at Borrower's facility.
"Eligible Trailer Fleet Inventory" - Eligible Goods Inventory
consisting of new and used manufactured or remanufactured Trailers, valued at
the lower of cost or orderly liquidation value, held by Borrower or a Guarantor
for intended lease or rental by Borrower or a Guarantor to third party end
users, and shall exclude any Inventory that is not manufactured in accordance
with and does not meet all standards imposed by all requirements of law or by
any governmental authority having regulatory authority over such goods or their
manufacture, use, sale, or lease.
"Eligible Work-In-Process Container Inventory" - Eligible Goods
Inventory, valued at cost, consisting of : (a) new and used manufactured or
remanufactured portable containers, which is in the work-in-process phase of
manufacturing; (b) shaped steel component parts; or (c) sub-assemblies and which
are located on the Closing Date or thereafter at Borrower's Maricopa facility or
at such other facility of Borrower or a Guarantor as to which Borrower and the
Guarantors implement after the Closing Date a perpetual inventory accounting
system comparable to that of the Maricopa facility.
"Environmental Laws" - all federal, state and local laws, rules,
regulations, ordinances, orders and consent decrees relating to pollution or the
protection of the environment.
"Equipment" - all machinery, apparatus, equipment, fittings,
furniture, fixtures, motor vehicles and other tangible personal Property (other
than Inventory) of every kind and description used in the operations of Borrower
or any of its Subsidiaries or Affiliates or owned by Borrower or any of its
Subsidiaries or Affiliates or in which Borrower or any of its Subsidiaries or
Affiliates has an interest, whether now owned or hereafter acquired by Borrower
or any of its Subsidiaries or Affiliates and wherever located, and all parts,
accessories and special tools and all increases and accessions thereto and
substitutions and replacements therefor.
"ERISA" - the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations from time to time promulgated thereunder.
"Event of Default" - as defined in Section 10.1 of the Agreement.
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"Fixed Charge Coverage Ratio" - as any date of determination, the
ratio of (i) Consolidated Net Cash Flow for the four fiscal quarters ending on
such date to (ii) the sum of Interest Expense for the four fiscal quarters
ending on such date plus the current portion of Funded Debt as of such date.
"Fleet" - Fleet Capital Corporation, a Rhode Island corporation with
an office at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx 00000,
and its successors and assigns.
"Funded Debt" - means, without duplication, (i) Indebtedness arising
from the lending of money by any Person to Borrower or any of its Subsidiaries;
(ii) Indebtedness, whether or not in any such case arising from the lending by
any Person of money to Borrower or any of its Subsidiaries, (1) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (2) which constitutes obligations evidenced by bonds, debentures, notes
or similar instruments, or (3) upon which interest charges are customarily paid
(other than accounts payable) or that was issued or assumed as full or partial
payment for Property; (iii) Indebtedness that constitutes a Capitalized Lease
Obligation; (iv) reimbursement obligations with respect to letters of credit or
guaranties of letters of credit and (v) Indebtedness of Borrower or any of its
Subsidiaries under any guaranty of obligations that would constitute Funded Debt
under clauses (i) through (iii) hereof, if owed directly by Borrower or any of
its Subsidiaries. Funded Debt shall not include trade payables or accrued
expenses or Indebtedness of up to $1,500,000 incurred to finance insurance
premiums.
"Guarantors" - each Subsidiary of Borrower and each other Person who
now or hereafter guarantees payment or performance of the whole or any part of
the Obligations.
"Guaranty Agreements" - the Guaranty which is to be executed on the
Closing Date by each Subsidiary of Borrower, in form and substance satisfactory
to Agent, together with each other guaranty hereafter executed by any Guarantor.
"Indebtedness" - (a) indebtedness for borrowed money or for the
deferred purchase price of property or services (other than trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), whether on open account or evidenced by a note, bond,
debenture or similar instrument, (b) Capitalized Lease Obligations, (c)
reimbursement obligations for letters of credit, banker's acceptances or other
credit accommodations, (d) Derivative Obligations, as determined by Agent, (e)
Contingent Obligations and (f) obligations secured by any Lien on that Person's
property, even if that Person has not assumed such obligations.
"Intellectual Property" - all past, present and future: trade
secrets, know-how and other proprietary information; trademarks, internet domain
names, service marks, trade dress, trade names, business names, designs, logos,
slogans (and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright
A-14
registrations or applications for registrations which have heretofore been or
may hereafter be issued throughout the world and all tangible property embodying
the copyrights, unpatented inventions (whether or not patentable); patent
applications and patents; industrial design applications and registered
industrial designs; license agreements related to any of the foregoing and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, computer software, source codes, object codes,
executable code, data, databases and other physical manifestations, embodiments
or incorporations of any of the foregoing; the right to xxx for all past,
present and future infringements of any of the foregoing; all other intellectual
property; and all common law and other rights throughout the world in and to all
of the foregoing.
"Interest Expense" - the consolidated expense of Borrower and its
Subsidiaries for interest on Indebtedness, including, without limitation,
amortization of original issue discount, incurrence fees (to the extent included
in interest expense), the interest portion of any deferred payment obligation
and the interest component of any capital lease obligation.
"Interest Period" - as applicable to any LIBOR Advance, a period
commencing on the date a LIBOR Advance is made, and ending on the date which is
one (1) month, two (2) months, three (3) months, or six (6) months later, as may
then be requested by Borrower; provided that (i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end in the next
preceding or succeeding Business Day as is Agent's custom in the market to which
such LIBOR Advance relates; and (ii) there remains a minimum of one (1) month,
two (2) months, three (3) months or six (6) months (depending upon which
Interest Period Borrower selects) in the Term.
"Investment" - all expenditures made and all liabilities incurred
(including Contingent Obligations) for or in connection with the acquisition of
Securities or Indebtedness of a Person, loans, advances, capital contributions
or transfers of property to a Person, or acquisition of substantially all the
assets of a Person. In determining the aggregate amount of Investments
outstanding at any particular time, (i) a guaranty shall be valued at not less
than the principal amount guaranteed and outstanding; (ii) returns of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution) shall be deducted; (iii) earnings, whether as
dividends, interest or otherwise, shall not be deducted; and (iv) decreases in
the market value shall not be deducted.
"IP Security Agreement" - a security agreement executed by Borrower
or any Guarantor granting to Agent, for the benefit of the Lenders, a Lien on
Intellectual Property.
"LC Amount" - at any time, the aggregate undrawn face amount of all
Letters of Credit and LC Guaranties then outstanding.
"LC Guaranty" - any guaranty pursuant to which Agent or any
Affiliate of Agent shall guaranty the payment or performance by Borrower of its
reimbursement obligation under any letter of credit.
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"LC Obligations" - any Obligations that arise from any draw against
any Letter of Credit or against any Letter of Credit supported by an LC
Guaranty.
"Legal Requirement" - any requirement imposed upon Agent or any
Lender by any law of the United States of America or the United Kingdom or by
any regulation, order, interpretation, ruling or official directive (whether or
not having the force of law) of the Federal Reserve Board, the Bank of England
or any other board, central bank or governmental or administrative agency,
institution or authority of the United States of America, the United Kingdom or
any political subdivision of either thereof.
"Lenders" - Fleet in its capacity as lender and any other financial
institution which is or becomes a party to this Agreement as a lender.
"Letter of Credit" - any standby or documentary letter of credit
issued by Agent or any Affiliate of Agent for the account of Borrower.
"LIBOR" - with respect to any LIBOR Advance, an interest rate per
annum (rounded upwards, if necessary, to the next higher 1/16 of 1%) equal to
the product of (i) the Base LIBOR Rate (as hereinafter defined) divided by (ii)
an amount equal to 1 minus the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed against
banks which are members of the Federal Reserve System for "Eurocurrency
Liabilities" as defined in Regulation D. For purposes of this definition, the
term "Base LIBOR Rate" shall mean the rate, rounded upwards, if necessary, to
the next higher 1/16 of 1%) at which deposits of U.S. dollars approximately
equal in principal amount to the applicable LIBOR Advance are offered to Agent
or Agent's Affiliate by prime banks in the London interbank foreign currency
deposits market at approximately 11:00 a.m., London time, two business days
prior to the such LIBOR Advance, for delivery on the day of such LIBOR Advance.
Each determination by Agent of any LIBOR rate shall, in the absence of manifest
error, be conclusive.
"LIBOR Advance" - any Loan bearing interest computed by reference to
the LIBOR.
"LIBOR Interest Payment Date" - the last day of each Interest Period
and, in the case of any Interest Period of six (6) months, the 90th day of such
Interest Period.
"LIBOR Portion" - that portion of the Revolving Credit Loans that is
subject to interest computed by reference to the LIBOR.
"Lien" - any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
rights of seller under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of the Agreement, Borrower or
Guarantor, as applicable, shall be deemed to be the owner of any Property which
it has acquired or holds
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subject to a conditional sale agreement or other arrangement pursuant to which
title to the Property has been retained by or vested in some other Person for
security purposes.
"Loan Account" - the loan account established on the books of Agent
pursuant to Section 3.6 of the Agreement.
"Loan Documents" - the Agreement, the Other Agreements and the
Security Documents.
"Loans" - all loans and advances of any kind made by Agent or any
Lender (or by any affiliate of Fleet) pursuant to the Agreement.
"London Banking Day" - any date on which commercial banks are open
for business in London, England.
"Majority Lenders" - as of any date, Lenders holding 51% of the
Revolving Loan Commitments determined on a combined basis and following the
termination of the Revolving Loan Commitments, Lenders holding 51% or more of
the outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by
Borrower or funded with a Revolving Credit Loan; provided, that (i) in each
case, if there are 2 or more Lenders with outstanding Loans, LC Amounts,
unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least
2 Lenders shall be required to constitute Majority Lenders; and (ii) prior to
termination of the Revolving Loan Commitments, if any Lender breaches its
obligation to fund any requested Revolving Credit Loan, for so long as such
breach exists, its voting rights hereunder shall be calculated with reference to
its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations,
rather than its Revolving Loan Commitment.
"Mandatory Redeemable Obligation" - an obligation of Borrower or any
of its Subsidiaries (or guaranteed by any of them) which must be redeemed or
repaid (a) at a fixed or determinable date, whether by operation of sinking fund
or otherwise, (b) at the option of any Person other than Borrower or such
Subsidiary, or (c) upon the occurrence of a condition not solely within the
control of Borrower or such Subsidiary, such as a redemption required to be made
out of future earnings.
"Material Adverse Effect" - means (i) a material adverse effect on
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of Borrower and Guarantors, taken as a
whole, (ii) the impairment of the ability of Borrower or any Guarantor to
perform its obligations under the Loan Documents to which it is a party or of
Agent or the Lenders to enforce the Obligations or realize upon the Collateral,
or (iii) a material adverse effect on the value of a material portion of the
Collateral or the amount which Agent or the Lenders would receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral.
"Mortgages" - All mortgages, deeds of trust and comparable documents
now or at any time hereafter securing the whole or any part of the Obligations.
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"Multiemployer Plan" - has the meaning set forth in Section
4001(a)(3) of ERISA.
"Obligations" - all Loans, all LC Obligations and all other
advances, debts, liabilities, obligations, covenants and duties, together with
all interest, fees and other charges thereon, owing, arising, due or payable
from Borrower to Agent, for its own benefit and the benefit of the Lenders, or
from Borrower to Bank, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under the
Agreement or any of the other Loan Documents or cash management services
rendered in connection therewith, whether direct or indirect (including those
acquired by assignment), absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising and however acquired, and any
Derivative Obligations owing to Agent, any Lender or any Affiliate of a Lender
or Bank.
"Organizational I.D. Number" - with respect to Borrower or any
Subsidiary of Borrower, the organizational identification number assigned to
Borrower or such Subsidiary by the applicable governmental unit or agency of the
jurisdiction of organization of Borrower or such Subsidiary.
"Other Agreements" - any and all agreements, instruments and
documents (other than the Agreement and the Security Documents), heretofore, now
or hereafter executed by Borrower, any Subsidiary of Borrower or any other third
party and delivered to Agent in respect of the transactions contemplated by the
Agreement.
"Overadvance" - the amount, if any, by which the outstanding
principal amount of Revolving Credit Loans, plus the LC Amount, plus the amount
of LC Obligations that have not been reimbursed by Borrower or funded with a
Revolving Credit Loan, plus reserves, exceeds the Borrowing Base.
"Permitted Acquisition" - an Acquisition permitted under Subsection
8.2.14 of the Agreement.
"Permitted Liens" - any Lien of a kind specified in Subsection 8.2.3
of the Agreement.
"Person" - an individual, partnership, corporation, limited
liability company, joint stock company, land trust, business trust, or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Plan" - an employee benefit plan now or hereafter maintained for
employees of Borrower or any of its Subsidiaries that is covered by Title IV of
ERISA.
"Pledge Agreement - the pledge agreement executed by Borrower and
its Subsidiaries pledging to Agent, for the benefit of the Lenders, all
Securities owned by them.
"Projections" - Borrower's forecasted Consolidated (i) balance
sheets, (ii) profit and loss statements, (iii) cash flow statements, and (iv) of
stockholders equity
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statements, all prepared on a consistent basis with the historical financial
statements of Borrower and its Subsidiaries, together with appropriate
supporting details and a statement of underlying assumptions.
"Property" - any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Purchase Money Liens and Leases" - a Lien upon fixed assets which
secures Indebtedness permitted under Subsection 8.2.2, but only if such Lien
shall at all times be confined solely to the fixed assets the purchase price of
which was financed through the incurrence of the purchase money Indebtedness
secured by such Lien.
"Reportable Event" - any of the events set forth in Section 4043(b)
of ERISA.
"Reserve Percentage" - the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed on member banks of the Federal Reserve System against "Eurocurrency
Liabilities" as defined in Regulation D.
"Restricted Payment" - defined in Section 8.2.6.
"Revolving Credit Loan" - a Loan made by a Lender pursuant to
Section 1.1.1 of the Agreement.
"Revolving Credit Maximum Amount" - $250,000,000.00, as such amount
may be reduced from time to time pursuant to the terms of the Agreement.
"Revolving Loan Commitment" - with respect to any Lender, the amount
of such Lender's Revolving Loan Commitment pursuant to Subsection 1.1.1 of the
Agreement, as set forth below such Lender's name on the signature page hereof,
as the same may be reduced from time to time pursuant to the terms of this
Agreement.
"Revolving Loan Percentage" - with respect to each Lender, the
percentage equal to the quotient of such Lender's Revolving Loan Commitment
divided by the aggregate of all Revolving Loan Commitments.
"Revolving Notes" - the Secured Promissory Notes to be executed by
Borrower on or about the Closing Date in favor of each Lender to evidence the
Revolving Credit Loans, which shall be in the form of Exhibit 1.1 to the
Agreement, together with any replacement or successor notes therefor.
"Security" - all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other Person and
all warrants, options or other rights to acquire the same.
"Security Documents" - the Guaranty Agreements, the Subsidiary
Security Agreements, the IP Security Agreements, the Pledge Agreement, the
Mortgages and all other instruments and agreements now or at any time hereafter
securing the whole or any part of the
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Obligations or any Guaranty thereof, including any joinder agreement pursuant to
which any Subsidiary or Affiliate of Borrower becomes a party to any other
Security Document.
"Solvent" - as to any Person, such Person (i) owns Property whose
fair saleable value is greater than the amount required to pay all of such
Person's Indebtedness (including contingent debts discounted based on the
likelihood of their having to be paid), (ii) is able to pay all of its
Indebtedness as such Indebtedness matures and (iii) has capital sufficient to
carry on its business and transactions and all business and transactions in
which it is about to engage.
"Specified Real Property" - the four parcels of real property owned
by Borrower or Guarantor located at (i) 11755 Maricopa Industrial Parkway, Pinal
County, Arizona, (ii) 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx, (xxx) 0000
Xxxxxxxxxxx Xxxx, Xxxxxx, Xxxxx; and (iv) 0000 X.X. 00xx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx.
"Subordinated Debt" - Indebtedness of Borrower or any Subsidiary of
Borrower that is subordinated to the Obligations in a manner satisfactory to
Agent, and contains terms, including without limitation, payment terms,
satisfactory to Agent.
"Subsidiary" - any Person of which another Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination. For purposes of clarity, the term "Subsidiary"
shall include subsidiaries of Subsidiaries.
"Subsidiary Security Agreement" - the security agreement executed by
Borrower's Subsidiaries and Affiliates in favor of Agent, for the benefit of the
Lenders.
"Swing Line Loan" - as defined in Section 3.1.11 of the Agreement.
"Term" - as defined in Section 4.1 of the Agreement.
"Total Credit Facility" - $250,000,000.00, as reduced from time to
time pursuant to the terms of the Agreement.
"Trailers" - over-the-road tractor trailers and trailers intended
for use as storage facilities not constituting portable and ISO containers owned
by Borrower or any of its Subsidiaries.
"Type of Organization" - with respect to Borrower or any Subsidiary
of Borrower, the kind or type of entity by which Borrower or such Subsidiary is
organized, such as a corporation or limited liability company.
"UCC" - the Uniform Commercial Code as in effect in the State of
California on the date of this Agreement, as the UCC may be amended or otherwise
modified from time to time.
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"Unfinanced Capital Expenditures" - for any period, cash
expenditures made for Capital Expenditures during such period less (i) the net
cash proceeds received during such period from Borrower's issuance of equity
Securities or Subordinated Debt and (ii) the amount, that Lenders would advance
against Eligible Machinery and Equipment, Eligible Container Fleet Inventory or
Eligible Container Inventory held for sale acquired if it were included in the
Borrowing Base.
"Voting Stock" - Securities of any class or classes of a
corporation, limited partnership or limited liability company or any other
entity the holders of which are ordinarily, in the absence of contingencies,
entitled to vote with respect to the election of corporate directors (or Persons
performing similar functions).
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. The section titles, table of contents
and list of exhibits appear as a matter of convenience only and shall not affect
the interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.
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LIST OF EXHIBITS AND SCHEDULES
Exhibit 1.1 Form of Revolving Note
Exhibit 8.3 Financial Covenants
List of Exhibits and Schedules
EXHIBIT 1.1
FORM OF REVOLVING NOTE
Exhibit 1.1 - Page 1
EXHIBIT 8.3
FINANCIAL COVENANTS
8.3.1 Fixed Charge Coverage Ratio. As of the end of each fiscal
quarter set forth below, Borrower and its Subsidiaries shall maintain a Fixed
Charge Coverage Ratio of not less than the ratio set forth below opposite such
date:
Fiscal Quarter Fixed Charge
Ended on Coverage Ratio
-------- --------------
March 31, 2002 2.10 to 1.0
June 30, 2002 1.90 to 1.0
September 30, 2002 1.80 to 1.0
December 31, 2002 1.80 to 1.0
March 31, 2003 2.00 to 1.0
June 30, 2003 and thereafter 2.10 to 1.0
8.3.2 Debt Ratio. As of the end of each fiscal quarter, Borrower
and its Subsidiaries shall maintain a Debt Ratio of not more than 4.50 to 1.00.
8.3.3 Minimum Availability. Borrower shall maintain at all times an
Availability of not less than $10,000,000.00, calculated for these purposes only
without deduction of the Availability Reserve.
8.3.4 Minimum Utilization. Borrower and Guarantors shall maintain
minimum utilization rates for each fiscal quarter, calculated at the end of each
such quarter as the average amount during such quarter, and calculated as:
(a) the number of units of the Eligible Container Fleet Inventory
of Borrower and the Guarantors which is then subject to valid, current rental or
lease agreements between Borrower or a Guarantor and the renters or lessees
thereof, divided by the aggregate number of units of the Eligible Container
Fleet Inventory of Borrower and the Guarantors, of not less than seventy five
percent (75%) in the first fiscal quarter of each year and seventy-seven and
one-half percent (77.5%) in each other fiscal quarter; and
(b) (i) the number of units of the Eligible Container Fleet
Inventory of Borrower and the Guarantors which is then subject to valid, current
rental or lease agreements
Exhibit 8.3 - Page 1
between Borrower or a Guarantor and the renters or lessees thereof, divided by
(ii) sum of (A) the number of units of the Eligible Container Fleet Inventory of
Borrower and the Guarantors, and (B) the number of units of the Eligible
Container Inventory Held For Sale of Borrower and the Guarantors, of not less
than seventy percent (70%) in the first fiscal quarter in each year and
seventy-two and one-half percent (72.5%) in each other fiscal quarter; provided,
that for the purposes of calculation of compliance with this Subsection 8.3.4,
the aggregate of the number of units of Eligible Container Inventory Held For
Sale, as a percentage of the sum of clauses (A) and (B) above, shall not exceed
five percent (5%).
Exhibit 8.3 - Page 2
