Exhibit 10.37
THIRD AMENDED AND RESTATED
SENIOR LOAN AND SECURITY AGREEMENT
Interpool, Inc.
Trac Lease, Inc.
Interpool Limited
Interpool Finance Corp.
with
CoreStates Bank, N.A., as Agent
PNC Bank, National Association, as Co-Agent
and
Each of the Financial Institutions Listed
Herein as Lenders
Dated as of December 19, 1997
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION.............................2
1.1 Terms Defined..............................................2
1.2 Accounting Principles.....................................11
SECTION 2. THE LOANS.................................................12
2.1 Credit Facility - Description.............................12
2.2 Advances, Conversions, Renewals and Payments..............14
2.3 Preconditions to Advances and Assignment of Leases
and Leased Property......................................15
2.4 Credit Facility Interest..................................17
2.5 Additional Interest Provisions............................20
2.6 Fees......................................................21
2.7 Prepayments...............................................21
2.8 Use of Proceeds...........................................22
2.9 Indemnity.................................................22
2.10 Capital Adequacy..........................................23
2.11 Restated Loan Agreement and Confirmation of
Existing Indebtedness....................................23
SECTION 3. COLLATERAL................................................23
3.1 Description...............................................23
3.2 Lien Documents............................................24
3.3 Other Actions.............................................24
3.4 Searches..................................................24
3.5 Guarantees................................................25
3.6 Filing Security Agreement.................................25
3.7 Power of Attorney.........................................25
3.8 Option to Release Collateral..............................25
3.9 Recollaterization of Loans................................26
SECTION 4. CLOSING...................................................27
4.1 Resolutions, Opinions, and Other Documents................27
4.2 Absence of Certain Events.................................28
4.3 Warranties and Representations at Closing.................28
4.4 Compliance with this Agreement............................28
4.5 Officers' Certificate.....................................28
4.6 Closing...................................................28
4.7 Non-Waiver of Rights......................................28
SECTION 5. REPRESENTATIONS AND WARRANTIES............................28
5.1 Corporate Organization and Validity.......................29
5.2 Places of Business........................................29
5.3 Pending Litigation........................................29
5.4 Title to Collateral.......................................30
5.5 Governmental Consent......................................30
5.6 Taxes.....................................................30
5.7 Financial Statements......................................30
5.8 Full Disclosure...........................................30
5.9 Subsidiaries..............................................30
5.10 Guarantees, Contracts, etc................................30
5.11 Government Regulations, etc...............................31
5.12 Business Interruptions....................................32
5.13 Names.....................................................32
5.14 Other Associations........................................32
5.15 Environmental Matters.....................................32
5.16 Regulation O..............................................33
5.17 Capital Stock.............................................33
5.18 Solvency..................................................33
5.19 Perfection of Security Interest...........................33
5.20 Leases and Leased Property................................34
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS..........................35
6.1 Payment of Taxes and Claims...............................35
6.2 Maintenance of Properties and Corporate Existence.........35
6.3 Business Conducted........................................37
6.4 Litigation................................................37
6.5 Taxes.....................................................37
6.6 Bank Accounts.............................................39
6.7 Employee Benefit Plans....................................39
6.8 Warranties for Future Advances............................39
6.9 Incurrence of Additional Funded Debt......................40
6.10 Financial Covenants.......................................40
6.11 Financial and Business Information........................40
6.12 Officers' Certificates....................................41
6.13 Inspection................................................42
6.14 Material Adverse Developments.............................42
6.15 Places of Business........................................42
6.16 Sale of Collateral........................................42
SECTION 7. BORROWERS' NEGATIVE COVENANTS:............................43
7.1 Merger, Consolidation, Dissolution or Liquidation.........43
7.2 Liens and Encumbrances....................................43
7.3 Negative Pledge...........................................43
7.4 Transactions With Affiliates or Subsidiaries..............44
7.5 Distributions, Redemptions and Other Indebtedness.........44
7.6 Loans and Investments.....................................44
7.7 Use of Lenders' Name......................................44
7.8 Miscellaneous Covenants...................................44
7.9 Change of Ownership Interests.............................45
SECTION 8. DEFAULT...................................................45
8.1 Events of Default.........................................45
8.2 Cure......................................................47
8.3 Rights and Remedies on Default............................47
8.4 Nature of Remedies........................................48
8.5 Set-Off...................................................48
SECTION 9. AGENT.....................................................48
9.1 Appointment and Authorization.............................48
9.2 General Immunity..........................................49
9.3 Consultation with Counsel.................................49
9.4 Documents.................................................49
9.5 Rights as a Bank..........................................49
9.6 Responsibility of Agent...................................49
9.7 Collections and Disbursements.............................50
9.8 Indemnification...........................................51
9.9 Expenses..................................................51
9.10 No Reliance...............................................51
9.11 Reporting.................................................51
9.12 Removal of Agent..........................................51
9.13 Action on Instructions of Lenders.........................52
9.14 Several Obligations.......................................52
9.15 Consent of Banks..........................................52
9.16 Participations and Assignments............................53
9.17 Co-Agent..................................................54
SECTION 10. MISCELLANEOUS.............................................54
10.1 GOVERNING LAW.............................................54
10.2 Integrated Agreement......................................55
10.3 Waiver....................................................55
10.4 Time......................................................55
10.5 Expenses of Agent.........................................55
10.6 Brokerage.................................................55
10.7 Notices...................................................56
10.8 Waiver of Subrogation.....................................57
10.9 Headings..................................................57
10.10 Survival..................................................57
10.11 Successors and Assigns....................................57
10.12 Duplicate Originals.......................................57
10.13 Modification..............................................57
10.14 Signatories...............................................58
10.15 Third Parties.............................................58
10.16 Discharge of Taxes, Borrowers' Obligations, Etc...........58
10.17 Most Favored Lenders......................................58
10.18 Consent to Jurisdiction...................................58
10.19 Waiver of Jury Trial......................................59
10.20 Information to Participant................................59
EXHIBIT LIST
Exhibit 2.1(b) -- Form of Revolving Credit Note
Exhibit 2.1(c) -- Form of Term Note
Exhibit 2.1(e) -- Form of Borrowing Base Certificate
Exhibit 2.3(a)(i)(A) -- Borrowing Request
Exhibit 2.3(a)(i)(C)(1) -- Fleet Utilization Report
Exhibit 2.3(a)(i)(C)(2) -- Cash Flow Certificate
Exhibit 2.3(b) -- Form of Assignment Agreement
Exhibit 5.1 -- Borrowers' States of Incorporation
Exhibit 5.2 -- Places of Business
Exhibit 5.7 -- Borrowers' Federal Tax Identification Numbers
Exhibit 5.11 -- Employee Benefit Plans
Exhibit 5.13(a) -- Schedule of Names
Exhibit 5.13(b) -- Trademarks, Patents and Copyrights
Exhibit 5.14 -- Other Associations
Exhibit 5.15 -- Environmental Matters
Exhibit 6.12 -- Officers' Certificates
SCHEDULES
Schedule A Schedules of Lenders
Schedule B Addresses of Lenders
Schedule C Schedule of Consolidated Subsidiaries
THIRD AMENDED AND RESTATED
SENIOR LOAN AND SECURITY AGREEMENT
This Third Amended and Restated Senior Loan and Security Agreement
("Agreement") is dated as of the 19th day of December, 1997, by and among
Interpool, Inc. ("Interpool"), Trac Lease, Inc. ("Trac Lease"), Interpool
Limited ("Limited"), and Interpool Finance Corp. ("Interpool Finance")
(collectively, "Borrowers" and singly, each is a "Borrower") CoreStates Bank,
N.A., a national banking association in its capacity as agent, ("Agent"), PNC
Bank, National Association, a national banking association in its capacity as
co-agent ("Co-Agent") and CoreStates Bank, N.A. ("CoreStates") and the financial
institutions listed on Schedule A attached hereto and made a part of this
Agreement (as such Schedule may be amended, modified or replaced from time to
time), in their capacity as lenders (singly, each is a "Lender" and
collectively, all are "Lenders").
BACKGROUND
A. On May 18, 1994, Interpool, Trac Lease and Limited (collectively
"Initial Borrowers") and Agent, in its capacity as Lender, entered into a
certain Senior Loan and Security Agreement (as amended from time to time, the
"Initial Loan Agreement") pursuant to which CoreStates agreed to make advances
to Initial Borrowers up to a maximum aggregate amount of $25,000,000, evidenced
by each Initial Borrower's delivery of a revolving credit note to CoreStates.
B. On or about August 19, 1994, Initial Borrowers and Agent entered into
that certain First Amendment to Senior Loan and Security Agreement pursuant to
which the Maximum Credit Limit (as defined in the Initial Loan Agreement) was
increased to $35,000,000 and The Daiwa Bank, Limited became a Lender under the
Initial Loan Agreement.
C. On or about October 7, 1994, Initial Borrowers and Agent entered into
that certain Second Amendment to Senior Loan and Security Agreement, pursuant to
which the Maximum Credit Limit (as defined in the Initial Loan Agreement) was
increased to $75,000,000 and Chemical Bank New Jersey N.A., Meridian Bank and
Midlantic Bank, N.A. became Lenders under the Initial Loan Agreement.
D. On or about February 14, 1995, Initial Borrowers and Agent entered into
that certain Amended and Restated Senior Loan and Security Agreement ("Restated
Loan Agreement") pursuant to which the Maximum Credit Limit (as defined in the
Restated Loan Agreement) was increased to $100,000,000.
E. On or about May 31, 1995, Initial Borrowers, Agent and the Lenders named
in the Restated Loan Agreement, entered into that certain First Amendment to
Amended and Restated Senior Loan and Security Agreement, pursuant to which the
Maximum Credit Limit (as defined in the Restated Loan Agreement) was increased
to $125,000,000 and PNC Bank, National Association became a Lender under the
Restated Loan Agreement.
F. On or about June 20, 1995, Initial Borrowers, Interpool Finance, Agent
and the Lenders to the Restated Loan Agreement entered into that certain Joinder
to Amended and Restated Senior Loan and Security Agreement, pursuant to which
Interpool Finance became a Borrower under the Restated Loan Agreement.
G. On or about November 30, 1995, Borrowers, Agent, the Lenders that were
then a party to the Restated Loan Agreement and United Jersey Bank ("UJB")
entered into that certain Second Amended and Restated Senior Loan and Security
Agreement ("Second Restated Loan Agreement") pursuant to which the Maximum
Credit Limit (as defined in the Second Restated Loan Agreement) was increased to
$150,000,000.00. Subsequent thereto, UJB merged into Summit Bank and is now
known as Summit Bank; Meridian Bank merged into CoreStates Bank, N.A.; Chemical
Bank, New Jersey, N.A. and Midlantic Bank, N.A. each merged into PNC Bank,
National Association and The Sumitomo Bank Limited became the successor to The
Daiwa Bank, Limited.
H. On or about September 6, 1996, Borrowers, Agent and the Lenders that
were then parties to the Second Restated Loan Agreement entered into that
certain First Amendment to Second Amended and Restated Senior Loan and Security
Agreement pursuant to which, inter alia, ABN Amro Bank, N.V. New York Branch
became a Lender under the Second Restated Loan Agreement.
I. On or about December 16, 1996, and February 7, 1997, Borrowers, Agent
and Lenders entered into that certain Second Amendment to Second Amended and
Restated Senior Loan and Security Agreement and Third Amendment to Second
Amended and Restated Senior Loan and Security Agreement, respectively, to
further modify the terms of the Credit Facility.
J. Borrowers desire to further amend and restate the Second Restated Loan
Agreement, to add Union Bank of California, N.A., Credit Lyonnais New York
Branch and The Bank of Nova Scotia as Lenders and to increase the Maximum Credit
Limit to $200,000,000 to continue to enable them to purchase transportation
equipment and to provide working capital.
K. The Loans to, and other Obligations of, Trac Lease, Limited and
Interpool Finance shall continue to be guaranteed by Interpool, the Obligations
of Limited shall continue to be guaranteed by Interpool Finance and the
Obligations of Interpool Finance shall continue to be guaranteed by Limited.
L. The Second Restated Loan Agreement, as amended, along with all
agreements, instruments and documents executed and/or delivered in connection
therewith are collectively referred to as "Existing Loan Documents". The parties
desire to reduce the terms and conditions of their relationship to writing.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 TERMS DEFINED. As used in this Agreement, the following terms have the
following respective meanings:
ACCOUNT - Any right to payment for goods sold or leased or for services
rendered which is not evidenced by an instrument or chattel paper, whether or
not it has been earned by performance.
ADVANCE(S) - Any monies advanced or credit extended to Borrowers by any
Lender under the Credit Facility.
AFFILIATE - As to any person, each other person that directly, or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, the person in question.
AGREEMENT - This Third Amended and Restated Senior Loan and Security
Agreement, as it may hereafter be amended, supplemented or replaced from time to
time.
ASSIGNMENT AGREEMENT - Section 2.3(b).
AUTHORIZED OFFICER - Any officer of any Borrower authorized by specific
resolution of such Borrower to request Advances as set forth in the incumbency
certificate referred to in Section 4.1(d) of this Agreement.
BASE RATE - The greater of (i) that per annum rate designated or announced
by Agent at its principal office from time to time as its prime rate of
interest, which rate may not be the lowest rate then being charged to commercial
borrowers by Agent, or (ii) the Federal Funds Rate plus one-half of one percent
(.50%) per annum.
BASE RATE LOAN - That portion of the Loans on which interest accrues at the
Base Rate less the corresponding per annum percentage based on the applicable
Funded Debt to Tangible Net Worth ratio as set forth in Section 2.4(a).
BASE RATE OPTION - Section 2.4(a).
BASIC LEASE TERM - The base term of a Direct Finance Lease after any
applicable build up or delivery period.
BOOKS AND RECORDS - All of Borrowers' original ledger cards, payment
schedules, credit applications, Contract Rights, liens, security instruments,
guarantees and other General Intangibles relating in any way to the Leases or
Leased Property.
BORROWING BASE - As it pertains to each Borrower severally, on any date of
determination, an amount equal to (i) 90% of the Net Book Value of Eligible
Leased Property of such Borrower plus (ii) the Unamortized Portion of the Direct
Finance Leases of such Borrower.
BUSINESS DAY - Any day that is not a Saturday or Sunday or day on which
Agent or any Lender is required or permitted to close, and solely with respect
to LIBOR Rate Loans requested by Borrowers, shall mean any day which is
otherwise a Business Day on which the Agent is able to determine the LIBOR Rate
for such requested LIBOR Rate Loan.
CASH FLOW AVAILABLE FOR DEBT AND CAPITAL LEASE OBLIGATIONS DUE WITHIN ONE
YEAR - The sum of the most recent prior four fiscal quarters for which Financial
Statements are available of (i) Net Earnings plus (ii) currently deferred taxes
plus (iii) depreciation plus (iv) collections on Direct Finance Leases (less
income recognized on Direct Finance Leases), all per the Financial Statements.
CHATTEL PAPER - A writing or writings which evidence both a monetary
obligation and a security interest in or a lease of specific goods but a charter
or other contract involving the use or hire of a vessel is not chattel paper.
When a transaction is evidenced both by such a security agreement or a lease and
by an instrument or a series of instruments, the group of writings taken
together constitutes chattel paper.
CLOSING - Section 4.6.
CLOSING DATE - Section 4.6.
COLLATERAL - With respect to each Borrower, all now or hereafter existing
Leases and Leased Property, Books and Records and all cash and noncash proceeds,
thereof, including insurance proceeds, of such Borrower.
CONSOLIDATED SUBSIDIARIES - All Subsidiaries of Interpool which are
consolidated under GAAP. At December 31, 1993, they are as listed on Schedule C.
CONTRACT RIGHTS - All rights under contracts not yet earned by performance.
CREDIT FACILITY - Section 2.1(a).
CREDIT FACILITY MATURITY DATE - The later of (i) May 31, 1999 or (iv) the
last day of the then Current Term.
CURRENT TERM - The Initial Term during the period of the Initial Term, and
any renewal or extended term during the term thereof, if Lenders elect, in their
sole discretion to renew or extend the Credit Facility.
DEBT AND CAPITAL LEASE OBLIGATIONS DUE WITHIN ONE YEAR - For purposes of
Section 2.3(a)(i)(C), the principal amount of Borrower's indebtedness and
capitalized leases (including 20% of outstanding principal under the Credit
Facility) due within the upcoming four fiscal quarters as appearing in the most
recent available quarterly Financial Statements less balances of cash and
marketable securities in excess of $5,000,000 as appearing in the most recent
available quarterly Financial Statements.
DIRECT FINANCE LEASE - Any Lease which is included as a "direct finance
lease" in the Financial Statements other than a Direct Finance Lease which is
subject to a Lien other than a Permitted Lien or the Lien of Lenders and/or
Agent.
DISTRIBUTION -
(1) Dividends or other distributions on capital stock of any Borrower; and
(2) The redemption, repurchase or acquisition of such stock or of warrants,
rights or other options to purchase such stock.
DOCUMENT - A document of title as defined in the general definitions of
Section 1-201 of the Uniform Commercial Code and a receipt of the kind described
in Section 7-201(b) of the Uniform Commercial Code (relating to who may issue
warehouse receipts; storage under government bond).
EARNINGS AVAILABLE FOR FIXED CHARGES - The sum of Fixed Charges plus Net
Earnings before income taxes plus interest expense relating to
"company-obligated mandatorily redeemable, preferred securities in grantor
trusts," as shown in the Financial Statements.
ELIGIBLE LEASED PROPERTY - Any and all Leased Property, comprised of
intermodal dry cargo and specialized containers and intermodal container chassis
and trailers (unless otherwise agreed to in writing by Agent and the
SuperMajority Lenders) in the possession of a Lessee or located at depots
utilized by a Lessee and/or any Borrower other than Leased Property (i) which is
leased under a Direct Finance Lease, (ii) which is subject to Lien other than a
Permitted Lien or Lien of Lenders and/or Agent, or (iii) which is lost, stolen
or destroyed. Eligible Leased Property does not include raw materials,
work-in-process, packaging materials, supplies and other similar items.
EQUIPMENT - All goods used or bought for use primarily in business or if
the goods are not included in the definition of Inventory, farm products or
consumer goods.
ERISA - The Employee Retirement Income Security Act of 1974, as the same
may be amended, from time to time.
EVENT OF DEFAULT - Section 8.1.
EXPENSES - Section 10.5.
FEDERAL FUNDS RATE - For any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed and rounded upward to the nearest
1/1000 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; PROVIDED, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Rate" for such day shall be the Federal Funds Rate for the last
day of which such rate was announced.
FINANCIAL STATEMENTS - The consolidated financial statements of Interpool
and its Consolidated Subsidiaries prepared in accordance with GAAP.
FIXED CHARGES - The sum of interest expense (excluding interest expense
with respect to "company-obligated mandatorily redeemable, preferred securities
in grantor trusts," as shown in the Financial Statements) plus obligations as
lessees for lease rentals on Long Term Leases, for Interpool and its
Consolidated Subsidiaries.
FIXED CHARGE COVERAGE RATIO - Section 6.10.
FIXED RATE OPTION - Section 2.4(c).
FUNDED DEBT - All indebtedness for borrowed money with recourse to
Interpool and its Consolidated Subsidiaries, or any of them, including purchase
money mortgages, capitalized leases, conditional sales contracts and similar
title retention debt instruments (excluding any current maturities of such
indebtedness) which by its term matures more than one year from the date of any
calculation thereof and/or which is renewable or extendable under any revolving
credit or similar agreement, which shall include 80% of the aggregate
outstanding amount of all Loans under the Credit Facility. The calculation of
Funded Debt shall include all Funded Debt of Interpool and its Consolidated
Subsidiaries which appears in the Financial Statements, plus any liabilities
which would otherwise be classified as Funded Debt of any other Person (if such
Person was a Consolidated Subsidiary), which has been guaranteed by Interpool
and its Consolidated Subsidiaries or any of them, either jointly or severally.
Funded Debt shall exclude Nonrecourse Debt.
FUNDED DEBT TO TANGIBLE NET WORTH RATIO - At any time means the ratio of
(i) Funded Debt to (ii) Tangible Net Worth.
GAAP - Generally accepted accounting principles as in effect on the Closing
Date, as may be amended from time to time.
GENERAL INTANGIBLES - Any personal property, including "things in action"
other than goods, Accounts, Chattel Paper, Documents, Instruments and money and
shall include without limitation books, records, ledgers, journals, check books,
print outs, blue prints, designs, computer programs, computer tapes, punch
cards, formulae, drawings, customer lists, choses in action, claims, goodwill,
designs and plans, licenses, license agreements, tax and all other types of
refunds, returned and unearned insurance premiums, rights and claims under
insurance policies, patents, patent application, trademarks, trade names, trade
styles, trademark applications and copyrights.
GOOD BUSINESS DAY - Any Business Day when banks in Philadelphia,
Pennsylvania and London, England are open for business.
HAZARDOUS SUBSTANCE - Section 5.15.
INITIAL ADVANCE AMOUNT - For each Direct Finance Lease, the amount equal to
95% of the net present value of all remaining Lease payments (but not to exceed
the original amount capitalized in the Financial Statements) corresponding to
delivered Leased Property under such Direct Finance Lease, at the time such
Direct Finance Lease or a portion thereof becomes a part of the Borrowing Base
where such Lease payments are present valued at the then existing Base Rate. The
Initial Advance Amount for any Direct Finance Lease, or a portion thereof, will
not change from time to time with future changes in the Base Rate.
INITIAL TERM - Section 2.1(d).
INSTRUMENT - A negotiable instrument (as defined in Section 3-104 of the
Uniform Commercial Code), or a certificated security (as defined in Section
8-102 of the Uniform Commercial Code) or any other writing which evidences a
right to the payment of money and is not itself a security agreement or lease
and is of a type which is in ordinary course of business transferred by delivery
with any necessary endorsement or assignment.
INVENTORY - Goods held by a Person who holds them for sale or lease or to
be furnished under contracts of service or if such Person has so furnished them,
or if they are raw materials, work in process or materials used or consumed in a
business. Inventory of a Person is not to be classified as Equipment. For
purposes of this definition, Inventory shall also include all additions,
improvements, accessions, attachments, upgrades, replacements and substitutions
thereto or therefor.
IRS - Section 6.7.
LEASE - All of Borrowers' Accounts, Documents, General Intangibles,
Instruments and Chattel Paper arising in connection with each and every
equipment lease and/or schedule to a master lease agreement (including Direct
Finance Leases), assigned to Agent and/or Lenders or now or hereafter designated
on any schedule as being assigned to Agent and/or Lenders. The term "Lease" is
limited to the extent that such lease relates to Leased Property in which Agent
and/or Lenders are granted a security interest in connection with or in relation
to this Agreement and includes to that extent, (i) all payments to be made
thereunder, (ii) all rights of Borrowers therein, and (iii) any and all
amendments, renewals, extensions or guarantees thereof.
LEASED PROPERTY - Any property leased or to be leased by a Borrower, as
lessor, which is referenced in an Assignment Agreement pursuant to which Agent
and/or Lenders are granted a security interest in such property; the term
"Leased Property" includes all of Borrowers' Inventory or Equipment referenced
in any Assignment Agreement, including without limitation intermodal cargo
containers and intermodal container chassis and trailers and such other types of
Inventory or Equipment as the SuperMajority Lenders may approve, in their sole
discretion, so leased and any and all additions, improvements, accessions,
attachments, upgrades, replacements and substitutions thereto and therefor.
LESSEE - The lessee(s) or obligor(s) responsible for payment and/or
performance under a Lease.
LIBOR BASED RATE - The LIBOR Rate plus the corresponding per annum
percentage based on the following applicable Funded Debt to Tangible Net Worth
ratio:
FUNDED DEBT TO TANGIBLE NET
WORTH RATIO PER ANNUM PERCENTAGE
Less than 1.75:1 .45%
1.75:1 to 2.65:1 .50%
Greater than 2.65:1 to 3.00:1 .65%
Greater than 3.00:1 to 3.50:1 .80%
Greater than 3.50:1 1.00%
The applicable per annum percentage adjustment shall change quarterly,
based on the results of Borrowers' most current quarterly Financial Statements,
on the first day of the next fiscal quarter following delivery to Agent of such
Financial Statements. Notwithstanding anything to the contrary contained herein,
the applicable per annum percentage shall not be less than .50% prior to May 31,
1998.
LIBOR BASED RATE LOAN - That portion of the Revolving Credit or any Term
Loan on which interest accrues at the LIBOR Based Rate or the Term LIBOR Rate,
respectively.
LIBOR INTEREST PERIOD - Section 2.4(b)(ii).
LIBOR RATE - An annual rate of interest (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined by CoreStates as being the rate quoted to the
principal London Branch of CoreStates Bank, N.A. at approximately 11:00 a.m.
London time for the offering by leading banks in the London interbank market of
U.S. Dollar deposits in immediately available funds for the LIBOR Interest
Period elected by Borrowers, in effect two Business Days prior to the funding
date for a requested LIBOR Based Rate Loan (including those requested in
connection with the conversion of a Loan(s) subject to the Base Rate Option or
Term Base Rate Option to a LIBOR Based Rate Loan in accordance herewith), or for
a LIBOR Based Rate Loan which Borrowers have elected to continue as a LIBOR
Based Rate Loan beyond the expiration of the then current LIBOR Interest Period
with respect thereto, for deposits of dollars in amounts equal (as nearly as may
be estimated) to the amount of the LIBOR Based Rate Loan which shall then be
loaned by Lenders to Borrowers as of the time of such determination, as such
rate may be adjusted by the reserve percentage applicable during the LIBOR
Interest Period in effect (or if more than one such percentage shall be
applicable, the daily average of such percentages for those days in such LIBOR
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including without limitation, any emergency, supplemental or other
marginal reserve requirement) for CoreStates with respect to liabilities or
assets consisting of or including "Eurocurrency Liabilities" as such term is
defined in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time, having a term equal to such LIBOR Interest
Period but without the benefit of credit proration, exemptions, or offsets that
might otherwise be available from time to time under Regulation D ("Eurocurrency
Reserve Requirement"). Such adjustment shall be effectuated by calculating, and
the LIBOR Rate shall be equal to, the quotient of (i) the rate determined by
CoreStates divided by (ii) one minus the Eurocurrency Reserve Requirement plus
(iii) the Assessment Rate if applicable. The "Assessment Rate" for purposes of
this definition means the average rate at which premiums for deposit insurance
are then charged by the Federal Deposit Insurance Corporation (or any successor)
to CoreStates for time deposits at foreign branches.
LIEN - Any interest of any kind or nature in property securing an
obligation owed to, or a claim of any kind or nature in property by, a Person
other than the owner of the Property, whether such interest is based on the
common law, statute, regulation or contract, and including, but not limited to,
a security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt, a lease, consignment or bailment for security
purposes, a trust, or an assignment.
LOANS - Collectively, all Revolving Credit Loans and Term Loans.
LOAN DOCUMENTS - This Agreement, the Revolving Credit Notes, the Term Notes
and all agreements, instruments and documents executed and/or delivered from
time to time in connection therewith, as amended or replaced from time to time.
LONG TERM LEASES - Non-capitalized leases where Interpool or any of its
Consolidated Subsidiaries are the lessee, with an initial term in excess of
three (3) years, excluding leases of office equipment and transportation
vehicles used in the ordinary course of business.
MAJORITY LENDERS - At any time, Lenders holding Pro Rata Percentages
aggregating at least fifty-one (51%) percent of the total Credit Facility at
such time.
MAXIMUM CREDIT LIMIT - The sum of the Pro Rata Shares not to exceed
$200,000,000 in the aggregate.
NET BOOK VALUE - For each item of Leased Property as shown in Borrowers'
Financial Statements, the cost of such Leased Property less Permitted
Depreciation.
NET EARNINGS - The consolidated Net Income before extraordinary items for
any period, determined in conformity with GAAP, as appearing in the Financial
Statements.
NET INCOME - The consolidated net income after taxes as such would appear
in the Financial Statements, prepared in accordance with GAAP.
NONRECOURSE DEBT - Shall have the meaning as used in accordance with GAAP.
OBLIGATIONS - All existing and future liabilities and obligations of every
kind or nature at any time owing by a Borrower to Lenders or any of them, and/or
to Agent if incurred hereunder, whether joint or several, related or unrelated,
primary or secondary, matured or contingent, due or to become due, and whether
principal, interest, fees or Expenses, including, without limitation,
obligations in respect of the Credit Facility and any extensions, modifications,
substitutions, increases and renewals thereof, and the payment of all reasonable
amounts advanced by Agent (or any Lender after the occurrence of an Event of
Default) to preserve, protect and enforce rights hereunder and in the Collateral
and all Expenses incurred by Agent in connection therewith.
OVERADVANCES - Amount by which the outstanding Loans at any time exceed the
Borrowing Base.
PBGC - Section 6.7.
PENNSYLVANIA UNIFORM COMMERCIAL CODE OR UCC - The Uniform Commercial Code
as enacted in Pennsylvania as the same shall be amended from time to time.
PERMITTED DEPRECIATION - Depreciation for specific items of Leased Property
over the specified period resulting in the specified residual value:
CATEGORY PERIOD RESIDUAL
1. Cargo Containers 15 yrs. 15%
2. Chassis, either a. 20 yrs. not to exceed
or $1,200.00
b. 15 yrs. not to exceed
$2,600.00
The Permitted Depreciation for other items of Leased Property shall be
as used by Borrowers in their Financial Statements.
PERMITTED LIENS - Section 7.2.
PERSON - An individual, partnership, corporation, trust, unincorporated
association or organization, joint venture or any other entity.
PRO RATA PERCENTAGE - Section 2.1(a)(v).
PRO RATA SHARE - Section 2.1(a)(v).
PROPERTY - Any interest of any Borrower in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
PROSPECTUS - The Prospectus for Interpool dated December 8, 1993, a
complete and accurate copy of which was delivered to Agent prior to Closing.
REGULATION D - Regulation D of the Board of Governors of the Federal
Reserve System, comprising Part 204 of Title 12, Code of Federal Regulations, as
amended, and any successor thereto.
REVOLVING CREDIT LOANS - Section 2.1(a).
REVOLVING CREDIT NOTES - Section 2.1(b).
SUBFACILITY(IES) - The portion of the Credit Facility utilized by a
Borrower.
SUBORDINATED DEBT - Any indebtedness that is subordinated to the
Obligations referenced herein in form and substance satisfactory to the Agent
and the Lenders.
SUBSIDIARY - Any corporation more than fifty percent (50%) of whose voting
stock is legally and beneficially owned by a Borrower or owned by a corporation
more than fifty percent (50%) of whose voting stock is legally and beneficially
owned by a Borrower.
SUPERMAJORITY LENDERS - At any time, Lenders holding Pro Rata Percentages
aggregating at least sixty-six and two-thirds (66-2/3%) percent of the total
amount outstanding under the Credit Facility at such time; provided however,
that if there is no outstanding amount under the Credit Facility, the
SuperMajority Lenders shall be determined by those Lenders holding sixty-six and
two-thirds (66-2/3%) percent of the Maximum Credit Limit.
SURETY - Interpool, with respect to Trac Lease, Limited and Interpool
Finance; Limited with respect to Interpool Finance; and Interpool Finance with
respect to Limited.
SURETY AGREEMENT(S) - Those certain Amended and Restated Surety Agreements
from Interpool to Agent, for the benefit of Lenders and those certain Amended
and Restated Surety Agreements from Limited and Interpool Finance to Agent for
the benefit of Lenders, as described in Section 3.5 hereof.
TANGIBLE NET WORTH - At any time means the amount of stockholders equity of
Interpool and its Consolidated Subsidiaries as appearing in the Financial
Statements but adjusted to exclude trademarks, goodwill, covenants not to
compete and all other intangible assets as that term is defined under GAAP,
provided that Tangible Net Worth shall include, without duplication,
"Company-obligated mandatorily redeemable, preferred securities in grantor
trusts," as shown on the Financial Statements.
TERM BASE RATE OPTION - Section 2.4(a).
TERM LIBOR OPTION - Section 2.4(b).
TERM LIBOR RATE - The applicable LIBOR Based Rate plus 15 basis points.
TERM LOAN - Section 2.1(a).
TERM NOTES - Section 2.1(c).
UNAMORTIZED PORTION - An amount equal to 95% of the net present value of
the scheduled remaining Lease payments (without including any payments scheduled
to be paid prior to the date of calculation) of a Direct Finance Lease as of the
date such calculation is made, where such Lease payments are present valued at
the Base Rate in effect at the time of the Initial Advance Amount calculation.
UNMATURED EVENT OF DEFAULT - An event or condition which with the passage
of time, the giving of notice, or both would become an Event of Default.
1.2 ACCOUNTING PRINCIPLES. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with GAAP, to the
extent applicable, except as otherwise expressly provided in this Agreement.
SECTION 2. THE LOANS
2.1 CREDIT FACILITY - DESCRIPTION.
(a) (i) Subject to the terms and conditions of this Agreement, each Lender
hereby establishes for the several benefit of Borrowers a credit facility
(collectively referred to herein as "Credit Facility") which shall include
Advances extended by Lenders to or for the benefit of a Borrower from time to
time hereunder in the form of revolving credit loans ("Revolving Credit Loans")
or term loans ("Term Loans").
(ii) The Credit Facility is subdivided into four Subfacilities. Subject to
the terms and conditions of this Agreement, Loans may be requested by a Borrower
so long as the aggregate amount outstanding under all of the Subfacilities does
not exceed the Maximum Credit Limit. Notwithstanding the foregoing, the
aggregate outstanding amount of all Loans (w) to Limited shall not exceed the
aggregate availability under Limited's, Interpool's and Interpool Finance's
Borrowing Bases, (x) to Trac Lease shall not exceed the aggregate availability
under Trac Lease's Borrowing Base plus any remaining availability under
Interpool's Borrowing Base which has not been allocated toward the calculation
of Limited's or Interpool Finance's availability, (y) to Interpool Finance shall
not exceed the aggregate availability under Interpool Finance's Borrowing Base,
plus any remaining availability under Limited's Borrowing Base which has not
been allocated toward the calculation of Limited's availability, plus any
remaining availability under Interpool's Borrowing Base which has not been
allocated toward the calculation of Limited's or Trac Lease's availability, and
(z) to Interpool shall not exceed Interpool's Borrowing Base reduced by any
portion of Interpool's Borrowing Base allocated to Limited's, Trac Lease's or
Interpool Finance's Borrowing Base requirements; provided at no time may the
aggregate outstanding amount of all Loans under the Subfacilities exceed the
Maximum Credit Limit.
(iii) Subject to the limitations set forth herein, the outstanding balance
of all Revolving Credit Loans made to each Borrower may fluctuate from time to
time, to be reduced by repayments made by such Borrower, to be increased by
future Revolving Credit Loans which may be made by Lenders to such Borrower. If
the aggregate outstanding amount of all Loans to any Borrower at any time
exceeds the Borrowing Bases as described in (ii) above relating to such
Borrower, such Borrower shall immediately repay such excess in full.
(iv) Subject to the terms and conditions of this Agreement, and provided
that no Event of Default has occurred (which has not been expressly waived or
excused) or Unmatured Event of Default has occurred and is continuing,
hereunder, each Borrower shall have the option to have any Advance under the
Credit Facility initially be a Revolving Credit Loan or a Term Loan and each
Borrower may at any time convert a Revolving Credit Loan to a Term Loan. In no
event shall the initial principal amount of any Term Loan be less than
$2,000,000.
(v) Subject to the terms and conditions of this Agreement, each Lender
agrees to lend to each Borrower an amount equal to such Lender's respective
percentage (as to each Lender, the percentage of the Credit Facility set forth
opposite its name on Schedule "A" attached hereto and made a part hereof and
referred to as its "Pro Rata Percentage") of the Advance requested by such
Borrower. The outstanding Loans of each Lender shall not exceed in the aggregate
the respective amounts ("Pro Rata Shares") set forth opposite its name on
Schedule "A".
(b) At Closing, Borrowers shall execute and deliver (or shall have
previously executed and delivered) their promissory notes to each Lender for the
total principal amount of such Lender's Pro Rata Percentage of the Maximum
Credit Limit (collectively as may be amended, modified or replaced from time to
time, the "Revolving Credit Notes"). The Revolving Credit Notes shall evidence
each Borrower's unconditional several obligation to repay such Lender for all
Revolving Credit Loans made by such Lender to such Borrower under the Credit
Facility, with interest as herein and therein provided. Each and every Revolving
Credit Loan under the Credit Facility made to a particular Borrower shall be
deemed evidenced by the Revolving Credit Notes issued by such Borrower, all of
which are deemed incorporated herein by reference and made a part hereof. All
Revolving Credit Notes shall be substantially in the form set forth in Exhibit
"2.1(b)" attached hereto and made a part hereof.
(c) In the event a Borrower requests any Advance to initially be a Term
Loan, or at any time a Revolving Credit Loan is converted to a Term Loan, such
Borrower shall execute and deliver its promissory note to each Lender for the
total principal amount of such Lender's Pro Rata Percentage of such Term Loan
(collectively as may be amended, modified or replaced from time to time, the
"Term Notes"). The Term Notes shall evidence each Borrower's unconditional,
several obligation to repay such Lender for the Term Loans made to such Borrower
under the Credit Facility, with interest as herein and therein provided. Each
and every Term Loan under the Credit Facility shall be evidenced by a separate
Term Note, all of which shall be deemed incorporated herein by reference and
made a part hereof. All Term Notes shall be substantially in the form set forth
in Exhibit "2.1(c)" attached hereto and made a part hereof. Each Term Loan,
together with accrued interest, shall be repaid in monthly installments as set
by Agent at the time a Borrower elects an Advance to initially be a Term Loan or
at the time such Borrower elects to convert a Revolving Credit Loan to a Term
Loan. No Term Loan shall have a maturity date beyond five years after the then
current Credit Facility Maturity Date.
(d) The term ("Initial Term") of the Credit Facility shall expire on May
31, 1999. The Credit Facility may, nonetheless, be renewed annually commencing
on May 31, 1998 in Lenders' sole discretion, for additional one year periods
such that the then Current Term shall be extended to a date two years from the
date of such renewal. Borrowers request for such renewal must be made at least
60 days prior to May 31 of each calendar year. Upon such request, Agent shall
notify Borrowers of Lenders' decision no later than such anniversary date. In
any event, if on the Credit Facility Maturity Date, no Event of Default has
occurred and is continuing (which has not been expressly waived or excused), the
lesser of (i) 90% of the Maximum Credit Limit less the aggregate outstanding
amount of all Term Loans made to Borrowers and (ii) the aggregate outstanding
amount of all Revolving Credit Loans made to Borrowers, shall automatically be
converted to Term Loans in such amounts allocated to each Borrower on a pro rata
basis based on such Borrower's respective outstanding Obligations under the
Maximum Credit Limit. In the event of such conversion, the Term Loans shall be
repayable in 60 equal consecutive monthly installments with interest as set
forth in Section 2.4(c) below, otherwise all of each Borrower's Obligations,
unless having been sooner demanded by Agent, shall be due and payable on the
Credit Facility Maturity Date without demand. After the Credit Facility Maturity
Date no further Advances shall be available from Lenders.
(e) Each Borrower shall deliver, within thirty (30) days after each fiscal
quarter end, and with each borrowing request in accordance with Section 2.3(a),
unless Agent or the SuperMajority Lenders request more frequent delivery,
Borrowing Base Certificates in the form of Exhibit 2.1(e) attached hereto and
made a part hereof, executed by an Authorized Officer of each respective
Borrower, evidencing the availability under the respective Borrowing Bases. The
delivery of such Borrowing Base Certificates shall, upon request of Agent or
SuperMajority Lenders, also include supporting schedules for use in determining
the Borrowing Bases.
2.2 ADVANCES, CONVERSIONS, RENEWALS AND PAYMENTS.
(a) Except to the extent otherwise set forth in this Agreement, all
payments of principal and of interest on the Credit Facility, the Commitment
Fee, the Expenses, the Agent's Fee, and all other charges and any other
Obligations of Borrowers hereunder, shall be made to Agent at its main
Philadelphia banking office CoreStates Bank, N.A., 1339 Chestnut Street,
Philadelphia, Pennsylvania, in United States dollars, in immediately available
funds. Agent, on behalf of all Lenders, upon five (5) days prior notice to
Borrowers shall have the unconditional right and discretion to make an Advance
under the Credit Facility in the form of a Revolving Credit Loan to pay, and/or
to charge any Borrower's operating account with any such respective institution
for, all of such Borrower's Obligations as they become due from time to time
under this Agreement including without limitation, interest, principal, fees and
reimbursement of Expenses; provided however that so long as no Event of Default
has occurred which has not been expressly waived or excused, such Borrower's
prior approval shall be required before Agent may charge such Borrower's
operating account.
(b) (i) Advances which may be made by Lenders from time to time under the
Credit Facility shall be made available by crediting such proceeds to a
designated Borrower's operating account with Agent.
(ii) All Advances requested by Borrowers must be requested by 11:00 A.M.
Philadelphia time, three Good Business Days prior to the date of such requested
Advance. All requests or confirmation of requests for an Advance are to be in
writing and may be sent by telecopy or facsimile transmission provided that
Agent shall have the right to require that receipt of such request not be
effective unless confirmed via telephone with Agent. If the Advance requested is
to be a LIBOR Based Rate Loan, Agent shall notify such Borrower of the
applicable LIBOR Based Rate via telephone or telecopy two Good Business Days
prior to the requested Advance date.
(iii) A. Upon receiving a request for an Advance in accordance with
subparagraph (ii) above, as soon as reasonably practical thereafter, Agent shall
notify all Lenders of the request. Each Lender shall advance its applicable Pro
Rata Percentage of the requested Advance to Agent by remitting federal funds
immediately available, to Agent pursuant to Agent's instructions prior to 1:00
P.M. Eastern Time on the scheduled date of the Advance. Subject to satisfaction
of the terms and conditions hereof, Agent shall make the requested Advance
available to the requesting Borrower by crediting such amount to the designated
Borrower's operating account with Agent as soon as is reasonably practical
thereafter on the day the requested Advance is to be made. In lieu of the
foregoing, Agent may, in its sole and absolute discretion, fund the Pro Rata
Percentage of such Advance on behalf of any one or more Lenders (unconditionally
and absolutely obliging such affected Lender to reimburse Agent in full without
deduction or setoffs for its portion of such Advance) with a settlement of the
Pro Rata Percentages of such Advances of each Lender on the following Business
Day under such procedures as Agent may establish.
B. Neither Agent nor any other Lender shall be obligated, for any reason
whatsoever, to advance the share of any other Lender. If such corresponding
amount is not made available to Agent by such Lender on the date the Advance is
made and Agent elects (at its discretion, without any obligation to do so) to
make such Lender's Pro Rata Percentage of the Advance, Agent shall be entitled
to recover such amount on demand from such Lender together with interest at the
per annum rate equal to the federal funds rate in respect of the first two days
and at the Base Rate in respect to each day thereafter during the period
commencing 2:00 P.M. Eastern Time on the date of such Advance and ending on (but
excluding) the date Agent recovers such amount. Agent shall also be entitled to
recover any and all losses and damages (including without limitation, attorneys'
fees) from any Lender failing to so advance upon demand of Agent. Agent may set
off the obligations of a Lender under this paragraph against any distributions
or payments of the Obligations which Agent would otherwise make available to
such Lender. To the extent any Lender fails to provide or delays providing its
respective Pro Rata Percentage of any requested Advance, such Lender's Pro Rata
Percentage of all payments of the Obligations (but not its Pro Rata Percentage
of Advances required to be funded by such Lender) shall decrease to reflect the
actual percentage which its actual outstanding Advances bears to the total
outstanding Advances of all Lenders.
2.3 PRECONDITIONS TO ADVANCES AND ASSIGNMENT OF LEASES AND LEASED PROPERTY.
(a) Before Lenders will make any Advance:
(i) The Borrower requesting the Advance will deliver to Agent the following
(dated and signed) in substance satisfactory to Agent:
A. A borrowing request in the form attached hereto as Exhibit 2.3(a)(i)(A)
setting forth the requested date of the Advance (but no sooner than 3 Good
Business Days after Agent receives the request), the requested advance amount,
whether the Advance will be a Revolving Credit Loan or a Term Loan, a Borrowing
Base Certificate if, after giving effect to the Advance, the aggregate
outstanding amount of all Loans increases, in the form attached hereto as
Exhibit "2.1(e)" setting forth the available Borrowing Base(s) securing the
Subfacility, any information required by this Agreement and such other
information as Agent shall reasonably request. A borrowing request may be made
orally, provided that Borrower confirms the request in writing within two (2)
days thereafter, provided further however, that Lenders need not make any
Advances until Agent receives actual written confirmation and a Borrowing Base
Certificate. If any Borrower fails to provide a borrowing request corresponding
to the renewal of a LIBOR Based Rate Loan, such LIBOR Based Rate Loan shall be
converted to a loan subject to the Base Rate Option in accordance with Section
2.4(b)(ii) below,
B. If the Advance is to be a Term Loan, such Borrower shall deliver to
Agent a Term Note for each Lender in the principal amount equal to such Lender's
Pro Rata Percentage of the requested Term Loan,
C. If after giving effect to the Advance, the aggregate outstanding amount
of all Loans increases:
(1) A certificate in the form attached hereto as Exhibit 2.3(a)(i)(C)(1),
from an Authorized Officer evidencing that as of the date of the most recent
available monthly report, the fleet utilization rates of all of the containers
and all of the chassis of Interpool and its Consolidated subsidiaries, exceeds
70%,
(2) A certificate in the form attached hereto as Exhibit 2.3(a)(i)(C)(2),
from an Authorized Officer certifying that as of the last day of the most recent
fiscal quarter for which Financial Statements are available, Interpool and its
Consolidated Subsidiaries had, on a consolidated basis, and to the best of its
knowledge then have, a ratio of Cash Flow Available For Debt and Capital Lease
Obligations Due Within One Year to Debt and Capital Lease Obligations Due Within
One Year of not less than 1.1 to 1, and
(3) Borrowers shall affirm each of the representations and warranties set
forth in Section 6.8 hereof.
D. Such other instruments, agreements and documents in form and substance
satisfactory to Agent, as Agent reasonably requests to carry out the intent of
the parties to this Agreement.
(ii) No Event of Default shall have occurred which has not been expressly
waived or excused and, if after giving effect to the Advance, the aggregate
outstanding amount of Loans increases, no Unmatured Event of Default shall have
occurred and be continuing.
(b) In order to increase a Borrowing Base, the respective Borrower shall
deliver to Agent for the benefit of Lenders the following items:
(i) A description of the collateral package, which shall include, a
description of the Leased Property, and if the Lease is a Direct Finance Lease,
the Basic Lease Term, identification of the Lessee and the Initial Advance
Amount, and such other information which Agent or Lenders shall reasonably
request,
(ii) An Assignment Agreement signed by Borrower (or if Trac Lease, Limited
or Interpool Finance is the prospective Borrower, Interpool may execute and
deliver such Assignment Agreement) assigning the Leases (relating to the Leased
Property), to Agent for the benefit of Lenders and granting Agent for the
benefit of Lenders a security interest in such Leased Property, in the form
attached hereto as Exhibit "2.3(b)" ("Assignment Agreement"),
(iii) Invoices, if available, showing the true cost of the Leased Property
which may include inspection, positioning and delivery costs, but in no event
shall such amount exceed the capitalized cost of such Leased Property as
determined per GAAP,
(iv) If requested by Agent, additional Uniform Commercial Code ("UCC")
financing statements and/or documentation appropriate for filing with any
applicable other governmental authority, covering, inter alia, the Leased
Property and the Leases listing Agent for the benefit of Lenders, as secured
party and the appropriate Borrower as debtor, to be filed in locations
reasonably required by Agent,
(v) Copies of all UCC-1 financing statements or other filings made with
governmental authorities filed by Borrowers against Lessee(s) and/or Leased
Property and any acknowledgment copies or recording information such Borrower
may have received back from the recording offices,
(vi) For each item of Leased Property, ownership of which is evidenced by a
certificate of title, such certificate of title, with Agent, for the benefit of
Lenders, named as the first lienholder thereon or all necessary documentation
including proper applications, to have a certificate of title issued with Agent,
on behalf of Lenders, named as the first lienholder, and
(vii) With respect to Collateral pledged to increase Interpool Finance's
Borrowing Base, evidence that the corresponding Assignment Agreement has been
recorded in Bills of Sale registry with the Public Records Office for the Cayman
Islands and Interpool Finance's internal registry of charges.
2.4 CREDIT FACILITY INTEREST.
(a) BASE RATE OPTION - The unpaid principal balance of any Term Loan,
unless subject to the Term LIBOR Option or the Fixed Rate Option, shall bear
interest, subject to the terms hereof at the per annum rate equal to the Base
Rate ("Term Base Rate Option"). The unpaid principal balance of Revolving Credit
Loans, unless subject to the LIBOR Rate Option, shall bear interest, subject to
the terms hereof, at the per annum rate equal to the Base Rate less the
corresponding per annum percentage adjustment based on the applicable Funded
Debt to Tangible Net Worth Ratio ("Base Rate Option"):
FUNDED DEBT TO TANGIBLE NET
WORTH RATIO PER ANNUM PERCENTAGE ADJUSTMENT
Less than 1.75:1 1.30%
Greater than 1.75:1 to 2.65:1 1.30%
Greater than 2.65:1 to 3.00:1 1.15%
Greater than 3.00:1 to 3.50:1 1.00%
Greater than 3.50:1 .80%
Changes in the Base Rate shall become effective on the same day a change in the
Base Rate occurs. Interest on Base Rate Loans shall be due and payable in
arrears on the second day of each calendar month commencing the first full month
following the Closing Date. The applicable per annum percentage adjustment
(above) shall change quarterly, based on the results of the most current
quarterly Financial Statements, on the first day of the next fiscal quarter
following delivery to Agent of such Financial Statements.
(b) LIBOR RATE OPTION:
(i) The unpaid principal balance of any Term Loan, unless subject to the
Term Base Rate Option or the Fixed Rate Option may, at Borrower's option, bear
interest at the Term LIBOR Rate ("Term LIBOR Option") and the unpaid principal
balance of all or a portion of the Revolving Credit Loans may, at Borrower's
option, bear interest at the LIBOR Based Rate ("LIBOR Rate Option") provided
that in no event may (i) a LIBOR Based Rate Loan be less than $1,000,000 nor
(ii) each Lender's Pro Rata Share of such LIBOR Based Rate Loan be less than
$500,000.
(ii) LIBOR Based Rate Loans shall be selected for a period of either one
(1), two (2) or three (3) months' duration, as Borrowers may elect, during which
the LIBOR Based Rate is applicable ("LIBOR Interest Period"); provided, however,
that (a) if the LIBOR Interest Period would otherwise end on a day which shall
not be a Good Business Day, such LIBOR Interest Period shall be extended to the
next succeeding Good Business Day, unless such Good Business Day falls in
another calendar month, in which case such LIBOR Interest Period shall end on
the next preceding Good Business Day subject to clause (c) below; (b) interest
shall accrue from and including the first day of each LIBOR Interest Period to,
but excluding the day on which any LIBOR Interest Period expires; and (c) with
respect to any LIBOR Interest Period which begins on the last Good Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such LIBOR Interest Period), the LIBOR
Interest Period shall end on the last Good Business Day of a calendar month. All
accrued and unpaid interest on a LIBOR Based Rate Loan must be repaid in full on
the day the applicable LIBOR Interest Period expires. No LIBOR Interest Period
with respect to Revolving Credit Loans may end after the Credit Facility
Maturity Date. Subject to all of the terms and conditions applicable to a
request that a new Advance be a LIBOR Based Rate Loan, Borrowers may extend
LIBOR Based Rate Loans as of the last day of the applicable LIBOR Interest
Period to a new LIBOR Based Rate Loan or may convert all or a portion of the
Revolving Credit Loans or Term Loans subject to the Base Rate Option or Term
Base Rate Option, as applicable, to a LIBOR Based Rate Loan. If the respective
Borrower fails to notify the Agent of its desire to extend a LIBOR Based Rate
Loan at least three Good Business Days prior to the last day of the then current
LIBOR Interest Period of an outstanding LIBOR Based Rate Loan, then such
outstanding LIBOR Based Rate Loan shall become a Revolving Credit Loan subject
to the Base Rate Option or a Term Loan subject to the Term Base Rate Option,
respectively, at the end of the current LIBOR Interest Period for such
outstanding LIBOR Based Rate Loan and shall accrue interest in accordance with
Section 2.4(a) above until such Loan or a portion thereof, is converted to
another LIBOR Based Rate Loan.
(iii) The LIBOR Rate may be automatically adjusted by Agent on a
prospective basis to take into account the additional or increased cost of
maintaining any necessary reserves for Eurodollar deposits or increased costs
due to changes in applicable law or regulation or the interpretation thereof
occurring subsequent to the commencement of the then applicable LIBOR Interest
Period, including but not limited to changes in tax laws and changes in the
reserve requirements imposed by the Board of Governors of the Federal Reserve
System (or any successor), excluding any such changes that have resulted in a
payment pursuant to Section 2.10 hereof, that increase the cost to Lenders of
funding the LIBOR Based Rate Loan. Agent shall promptly give the respective
Borrower and each Lender notice of such a determination and adjustment, which
determination shall be conclusive, absent manifest error, as to the correctness
of the fact and the amount of such adjustment. Agent shall furnish to such
Borrower a statement setting forth the basis for adjusting such LIBOR Based Rate
and the method for determining the amount of such adjustment. In such event
Borrower may prepay the LIBOR Based Rate Loan with respect to which such
adjustment is made, subject to the requirements of Section 2.9 below.
(iv) In the event that a Borrower shall have requested the LIBOR Rate
Option in accordance with Section 2.4(b) and Agent shall have reasonably
determined that Eurodollar deposits equal to the amount of the principal of the
requested LIBOR Based Rate Loan and for the LIBOR Interest Period specified are
unavailable, impractical or unlawful, or that the rate based on the LIBOR Rate
will not adequately and fairly reflect the cost of the LIBOR Based Rate
applicable to the specified LIBOR Interest Period of making or maintaining the
principal amount of the requested LIBOR Based Rate Loan specified by such
Borrower during the LIBOR Interest Period specified, or that by reason of
circumstances affecting Eurodollar markets, adequate and reasonable means do not
exist for ascertaining the rate based on the LIBOR Rate applicable to the
specified LIBOR Interest Period, Agent shall promptly give notice of such
determination to the Borrowers that the rate based on the LIBOR Rate is not
available. A determination by Agent hereunder shall be prima facie evidence of
the correctness of the fact and amount of such additional costs or
unavailability. Upon such a determination, (i) the right of Borrowers to select,
convert to, or maintain a LIBOR Based Rate Loan at the rate based on the LIBOR
Rate shall be suspended until Agent shall have notified the Borrowers that such
conditions shall have ceased to exist, and (ii) the Loans subject to the
requested LIBOR Rate Option shall accrue interest in accordance with Section
2.4(a) above.
(v) In the event that, as a result of any changes in applicable law or
regulation or the interpretation thereof, it becomes unlawful for a Lender to
maintain Eurodollar liabilities sufficient to fund any LIBOR Based Rate Loan
subject to the LIBOR Based Rate, and then such Lender shall immediately notify
Agent who shall immediately notify the other Lenders and Borrowers thereof, and
such Lender's obligation to make, convert to, or maintain a LIBOR Based Rate
Loan at the LIBOR Based Rate shall, without penalty to Borrowers, be suspended
until such time as such Lender may again cause the LIBOR Base Rate to be
applicable to its share of any LIBOR Based Rate Loans and such Lender's share of
the Loans subject to the LIBOR Based Rate shall accrue interest in accordance
with Section 2.4(a) above. Promptly after becoming aware that it is no longer
unlawful for such Lender to maintain such Eurodollar liabilities, such Lender
shall notify Agent who will notify Borrowers thereof and such suspension shall
cease to exist. In the event it becomes unlawful for a Lender to maintain
Eurodollar liabilities, Borrowers may seek to have such Lender replaced with a
lender for whom maintenance of Eurodollar liabilities is not unlawful so long as
such replacement lender is satisfactory to Agent and the SuperMajority Lenders
(without giving effect to the potentially replaced Lender), in their sole and
absolute discretion.
(c) TERM LOAN RATES: The unpaid principal balance of each Term Loan shall,
subject to the terms hereof, bear interest at either the Base Rate, the Term
LIBOR Rate or at a fixed rate of interest quoted by Agent at the time such Term
Loan is requested or a Borrower notifies Agent of its desire to convert a
Revolving Credit Loan to a Term Loan ("Fixed Rate Option"). The fixed rate of
interest quoted by the Agent will be a consensus bid formed in conjunction with
all of the Lenders.
2.5 ADDITIONAL INTEREST PROVISIONS.
(a) CALCULATION OF INTEREST:
(i) Interest on the Loans, except those subject to the LIBOR Rate Option,
shall be based on a year of three hundred sixty five (365) days and charged for
the actual number of days elapsed.
(ii) Interest on Loans subject to the LIBOR Rate Option shall be based on a
year of three hundred sixty (360) days comprised of twelve 30-day months and
charged for the actual number of months elapsed. Any prepayment requiring
calculation of interest for less than a one month period shall be prorated for
the portion of the month elapsed.
(b) LIMITATION ON LIBOR BASED RATE LOANS. Upon the occurrence and
continuance of an Event of Default and following written notice from Agent to
Borrower, Agent may in its sole discretion, or the Majority Lenders shall have
the right to cause Agent to, eliminate the availability of LIBOR Based Rate
Loans.
(c) DEFAULT RATE: After the occurrence and during the continuance of an
Event of Default hereunder, the per annum effective rate of interest on all
Revolving Credit Loans and Term Loans outstanding under the Credit Facility,
regardless of the rate option, shall be increased to a rate equal to two (2%)
percentage points in excess of the applicable interest rate.
(d) CONVERSION: Following the occurrence of an Event of Default, all LIBOR
Based Rate Loans at the end of their applicable LIBOR Interest Period, shall
convert to a Loan subject to either the Base Rate Option or the Term Base Rate
Option, as applicable, which conversion is independent of Agent's rights under
Section 2.5(b) and 2.5(c).
(e) CONTINUATION OF INTEREST CHARGES: All contractual rates of interest
chargeable on outstanding Loans, regardless of the rate option, shall continue
to accrue and be paid even after default, maturity, acceleration, judgment,
bankruptcy, insolvency proceedings of any kind or the happening of any event or
occurrence similar or dissimilar.
(f) APPLICABLE INTEREST LIMITATIONS: In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest hereunder and charged or
collected pursuant to the terms of this Agreement exceed the highest rate
permissible under any law which a court of competent jurisdiction shall, in a
final determination, deem applicable hereto. In the event that such court
determines Lenders have charged or received interest hereunder in excess of the
highest applicable rate, such rate shall automatically be reduced to the maximum
rate permitted by such law, and Agent, on behalf of Lenders, shall in its sole
discretion, apply and set off such excess interest received by Lenders against
other Obligations which are then due, any additional amounts shall be refunded
to Borrowers.
2.6 FEES.
(a) COMMITMENT FEE: So long as the Credit Facility is outstanding and has
not been terminated, Interpool shall unconditionally pay to Agent, for the
benefit of Lenders in accordance with their Pro Rata Percentages, a
nonrefundable fee ("Commitment Fee") equal to the percentage of the average
daily unused portion of the Credit Facility (measured as the difference between
the Maximum Credit Limit and the outstanding principal balance of the Loans)
based on the applicable Funded Debt to Tangible Net Worth Ratio, as determined
by reference to the grid below. Such fee shall be computed and paid on a
quarterly basis, in arrears, on the fifth day of each January, April, July and
October for the previous quarter for which such computation is made by Agent,
commencing with the execution of this Agreement. Such fee shall be calculated
based on a year of three hundred sixty five (365) days and charged for the
actual number of days elapsed.
(b)
FUNDED DEBT TO TANGIBLE
NET WORTH RATIO PER ANNUM PERCENTAGE
Less than 1.75:1 .125%
1.75:1 to 2.65:1 .15%
Greater than 2.65:1 to 3.00:1 .175%
Greater than 3.00:1 .20%
The applicable per annum percentage adjustment shall change quarterly,
based on the results of Borrowers' most current quarterly Financial Statements,
on the first day of the next fiscal quarter following delivery to Agent of such
Financial Statements. Notwithstanding anything to the contrary contained herein,
the applicable per annum percentage shall not be less than .15% prior to May 31,
1998.
(c) AGENT'S FEE: So long as any of Borrowers' Obligations remain
outstanding, Interpool shall unconditionally pay to Agent, for its sole benefit,
a non-refundable fee ("Agent's Fee") as provided in the separate fee letter
among Borrowers and Agent.
2.7 PREPAYMENTS.
(a) LIBOR BASED RATE LOANS: No portion of the LIBOR Based Rate Loans may be
prepaid at any time except if the Borrowers first satisfy in full their
obligations under Section 2.9 below arising from such prepayment.
(b) BASE RATE LOANS: Revolving Credit Loans subject to the Base Rate Option
may be prepaid at any time and from time to time in whole or in part without
premium or penalty.
(c) TERM LOANS: Term Loans subject to the Term Base Rate Option, may be
prepaid in whole or part by giving Agent 5 Business Days prior written notice.
Term Loans subject to the Fixed Rate Option, may be prepaid in whole or in part
by giving Agent 5 Business Days prior written notice, and the payment of a
prepayment fee as hereafter calculated. A Borrower's notice will irrevocably
bind it to make prepayment on, with the prepayment fee (if any) and accrued
interest to, the date stated in the notice ("Prepayment Date"). The prepayment
fee (which must be paid if prepayment is voluntary or involuntary) is an amount
equal to the excess, if any, of (a) the net present value of all scheduled
remaining principal and interest payments on the prepaid portion of the Term
Loan discounted at a rate equal to the then-existing yield to maturity of U.S.
Treasury obligations with the maturity nearest to the scheduled maturity of the
Term Loan plus 40 basis points, over (b) the principal amount to be prepaid.
Borrowers agree that this fee payable to Lenders is a reasonable estimate of
their damages and not a penalty.
(d) PROCEEDS OF COLLATERAL: Following the occurrence of an Event of Default
(which has not been expressly waived or excused) or the continuance of an
Unmatured Event of Default, or if required by Section 2.7(e) below, Borrowers
shall promptly upon the receipt of proceeds of any Collateral, pay all such
proceeds to Agent for application against the outstanding amount of the
respective Subfacilities under the Credit Facility. Such payments shall first be
applied to such Borrower's outstanding balance of the Revolving Credit Loans
subject to the Base Rate Option, then to the Revolving Credit Loans subject to
the LIBOR Rate Option and then to the outstanding balance of such Term Loans as
Agent in its sole discretion may decide, in the inverse order of such Term
Loan's maturity.
(e) MANDATORY PREPAYMENT: In the event the aggregate outstanding amount of
all Loans to a Borrower at any time exceeds the lesser of the Maximum Credit
Limit or the Borrowing Bases for such Borrower described in Section 2.1(a)(ii)
above, such Borrower shall immediately either repay such excess in full or
provide sufficient additional Collateral to increase the Borrowing Base (so long
as the aggregate of all Loans to Borrowers does not exceed the Maximum Credit
Limit). Such payments shall first be applied to such Borrower's outstanding
balance of the Revolving Credit Loans subject to the Base Rate Option, then to
the Revolving Credit Loans subject to the LIBOR Rate Option and then to the
outstanding balance of such Term Loans as Agent in its sole discretion may
decide, in the inverse order of such Term Loan's maturity.
(f) REDUCTION OF MAXIMUM CREDIT LIMIT: Notwithstanding anything to the
contrary contained herein, Borrowers shall have the right at any time, upon five
(5) Business Days' prior written notice to Agent, subject to the prepayment
provisions contained in this Section 2.7, to permanently reduce the Maximum
Credit Limit; provided however (i) that each such reduction shall be in an
aggregate amount of $5,000,000 or an integral multiple thereof; (ii) that each
Lender's Revolving Credit Pro Rata Share shall be reduced proportionately to the
reduction of the Maximum Credit Limit; and (iii) that Borrowers may only make
one such reduction during any consecutive twelve-month period.
2.8 USE OF PROCEEDS. The extensions of credit under and proceeds of the
Credit Facility shall be used to (i) provide working capital, (ii) to enable
Borrowers to purchase or refinance Leased Property and (iii) for other general
corporate purposes.
2.9 INDEMNITY. Each Borrower shall indemnify, defend and hold harmless
Agent and Lenders against any and all loss, liability, cost or expense which
Agent and Lenders may sustain or incur as a consequence of (a) any failure of
such Borrower to accept, convert or extend any LIBOR Based Rate Loan after
notice thereof has been given to Agent or (b) any payment, prepayment or
conversion of a LIBOR Based Rate Loan such Borrower made for any reason on a
date other than the last day of the applicable LIBOR Interest Period. Such
Borrower shall pay the full amount thereof to Agent on demand by Agent.
2.10 CAPITAL ADEQUACY. If any present or future law, governmental rule,
regulation, policy, guideline, directive or similar requirement imposes,
modifies, or deems applicable any capital adequacy, capital maintenance or
similar requirement which affects the manner in which any Lender allocates
capital resources to its commitments (including any commitments hereunder), and
as a result thereof, in the reasonable opinion of such Lender, the rate of
return on such Lender's capital with regard to the Loans is reduced to a level
below that which such Lender could have achieved but for such circumstances,
then in such case and upon notice from Agent to Borrowers, from time to time,
Borrowers shall pay such Lender such additional amount or amounts as shall
compensate such Lender for such reduction in its rate of return. Such notice
shall contain the statement of such Lender with regard to any such amount or
amounts which shall, in the absence of manifest error, be binding upon Borrowers
so long as such calculations have been reasonably prepared, are accurate and are
available to Borrower upon request. Agent and/or Lenders shall provide prompt
notice of such adjustment and allow Borrowers to prepay the Loans without
penalty (but subject to Section 2.9 herein).
2.11 RESTATED LOAN AGREEMENT AND CONFIRMATION OF EXISTING INDEBTEDNESS.
Borrowers acknowledge and confirm that as of the close of business on December
19, 1997, they are indebted to Lenders, without defense, setoff or counterclaim
under the Existing Loan Documents, in the aggregate principal amount of
$90,000,000 ("Existing Indebtedness"). This Agreement amends and restates the
Second Restated Loan Agreement and certain other agreements and documents
heretofore evidencing or securing the Existing Indebtedness. The execution and
delivery of this Agreement and the other Loan Documents however, does not
evidence or represent a refinancing, repayment, accord and/or satisfaction or
novation of the Existing Indebtedness. All of the Lenders' obligations to
Borrowers with respect to Advances to be made concurrently herewith or after the
date hereof are set forth in this Agreement. All liens and security interests
previously granted to Agent for the benefit of Lenders, and/or to Lenders,
pursuant to the Existing Loan Documents are acknowledged and reconfirmed, remain
in full force and effect and are not intended to be released, replaced or
impaired.
SECTION 3. COLLATERAL
3.1 DESCRIPTION. Subject to Sections 3.8 and 3.9 below, as security for the
payment of the respective Obligations, and satisfaction by each of the Borrowers
of all covenants and undertakings contained in this Agreement and the other Loan
Documents made by each Borrower, each Borrower hereby confirms its prior grant
of, and assigns and grants to Agent, on behalf of Lenders, a continuing first
lien on and security interest in, upon and to its Collateral. No Collateral of
Trac Lease, Interpool Finance or Limited shall secure the Obligations of
Interpool and no Collateral of either Trac Lease or Limited shall secure the
others' Obligations. The Collateral of Interpool shall secure the Obligations of
each and every Borrower and the Collateral of Interpool Finance shall secure the
Obligations of Limited and the Collateral of Limited shall secure the
Obligations of Interpool Finance.
3.2 LIEN DOCUMENTS. At Closing and thereafter as Agent deems necessary,
each Borrower shall execute and deliver to Agent, or have executed and delivered
(all in form and substance reasonably satisfactory to Agent):
(a) FINANCING STATEMENTS - Financing statements pursuant to the UCC, which
Agent, on behalf of Lenders, may file in any jurisdiction where any Collateral
is or may be located and in any other jurisdiction that Agent deems reasonably
appropriate;
(b) CERTIFICATE OF TITLE - With respect to all Leased Property, ownership
of which is evidenced by a certificate of title, such certificate of title with
Agent, for the benefit of Lenders, named as the first lienholder thereon or all
necessary documentation including proper applications, to have a certificate of
title issued with Agent, on behalf of Lenders, named as the first lienholder;
and
(c) OTHER AGREEMENTS - Any other agreements, documents, instruments and
writings, including, without limitation, security agreements and Assignment
Agreements, reasonably required by Agent to evidence, perfect or protect
Lenders' liens and security interest in the Collateral or as Agent may
reasonably request from time to time.
3.3 OTHER ACTIONS.
(a) In addition to the foregoing, Borrowers shall do anything further that
may be lawfully and reasonably required by Agent to secure Lenders and
effectuate the intentions and objects of this Agreement, including, but not
limited to, the execution and delivery of continuation statements, amendments to
financing statements, security agreements, contracts and any other documents
required hereunder. At Agent's request, Borrowers shall also as promptly as
possible deliver (with execution by Borrowers of all necessary documents or
forms to reflect Lenders' Lien thereon) to Agent as bailee for Lenders, all
items, which are or can be made available, for which Lenders must receive
possession to obtain a perfected security interest, including without
limitation, certificates and documents of title.
(b) Each Borrower will hold all Leases (except the Lessee's counterpart)
which are not from time to time delivered to Agent, in trust for the Agent on
behalf of the Lenders, and covenants and agrees that it will not pledge or
permit any third party other than Agent to possess any of the foregoing;
provided, however, that if a Borrower is compelled by law to deliver any Lease
to a third party other than Agent, such Lease(s) shall be conspicuously marked
to evidence that it is subject to the Liens granted to Agent, for the benefit of
Lenders, under this Agreement.
(c) Each Borrower will cause each item of Leased Property to be marked with
an identification number and will endeavor in good faith to insure that such
number remains thereon and legible so long as such Leased Property remains
subject to the Lien of Agent and/or Lenders.
3.4 SEARCHES. Agent shall, prior to or at Closing, and thereafter as Agent
may determine from time to time, at Borrowers' expense, obtain the following
searches (the results of which are to be consistent with the warranties made by
Borrowers in this Agreement):
(a) UCC SEARCHES: UCC searches with the Secretary of State and local filing
office of each state where each Borrower maintains its executive office or a
bona fide place of business;
(b) JUDGMENTS, ETC.: Judgment, federal tax lien and corporate tax lien
searches, in all applicable filing offices of each state searched under
subparagraph (a) above.
3.5 GUARANTEES. On or before the Closing Date Interpool shall execute and
deliver to Agent those certain Amended and Restated Surety Agreements pursuant
to which Interpool shall guarantee and agree to serve as surety for the
Obligations of Trac Lease, Limited and Interpool Finance. In addition, Limited
shall execute and deliver to Agent an Amended and Restated Surety Agreement
pursuant to which Limited shall guarantee and agree to serve as surety for the
Obligations of Interpool Finance, and Interpool Finance shall execute and
deliver to Agent an Amended and Restated Surety Agreement pursuant to which
Interpool Finance shall guarantee and agree to serve as surety for the
Obligations of Limited.
3.6 FILING SECURITY AGREEMENT. A carbon, photographic or other reproduction
or other copy of this Agreement or of a financing statement is sufficient as and
may be filed in lieu of a financing statement.
3.7 POWER OF ATTORNEY. Each of the officers of Agent is hereby irrevocably
made, constituted and appointed the true and lawful attorney for each Borrower
(without requiring any of them to act as such) with full power of substitution
to execute in the name of any Borrower any financing statements, schedules,
assignments, instruments, documents and statements that such Borrower is
obligated to give Agent hereunder or is necessary to perfect Agent's security
interest or lien in the Collateral, and following the occurrence of an Event of
Default which has not been expressly waived or excused or the occurrence and
continuance of an Unmatured Event of Default to: (1) endorse the name of such
Borrower upon any and all checks, drafts, money orders and other instruments for
the payment of monies that are payable to such Borrower and constitute
collections on the Collateral; (2) to verify validity, amount or any other
matter relating to the Collateral by mail, telephone, telecopy or otherwise; and
(3) do such other and further acts and deeds in the name of any Borrower that
Agent may reasonably deem necessary or desirable to enforce any Account or other
Collateral.
3.8 OPTION TO RELEASE COLLATERAL.
(a) Lenders agree to release their right, title and interest in and to the
Collateral upon the occurrence of all of the following conditions:
(i) Interpool and the Consolidated Subsidiaries are able to comply with the
following financial covenants for a period of no less than six (6) consecutive
fiscal quarters: (x) total Funded Debt to Tangible Net Worth ratio not to exceed
3 to 1; (y) the Fixed Charge Coverage Ratio to be greater than 1.75 to 1; and
(z) Tangible Net Worth to exceed $125,000,000;
(ii) Prior to a determination described in subparagraph (iii) below,
Interpool receives a private rating from Standard & Poor's Corp. on an unsecured
basis of PPR2 or higher or its equivalent rating from either Moodys or Duff &
▇▇▇▇▇▇, respectively; and
(iii) Borrowers receive the consent of the holders of at least eighty
percent (80%) of the outstanding Funded Debt (excluding capitalized leases) and
the holders of at least sixty percent (60%) of their private placement notes to
release their collateral, if any, and such sixty (60%) percent of the holders
shall have released such collateral securing such indebtedness.
(b) In the event Lenders release their right, title and interest in and to
the Collateral pursuant to Section 3.8(a) above and for so long as no event
described in Section 3.9 below occurs which would require a recollateralization,
(i) The definitions of "Lease" and "Leased Property" shall be deemed to
read as follows:
LEASE - all of Borrowers' Accounts, Documents, General Intangibles,
Instruments and Chattel Paper arising in connection with each and every
equipment lease and/or schedule to a master lease agreement (including Direct
Finance Leases).
LEASED PROPERTY - any property leased or to be leased by a Borrower, as
lessor, including without limitation intermodal cargo containers and intermodal
container chassis and trailers and such other types of Inventory or Equipment as
the SuperMajority Lenders may approve, in their sole discretion, so leased and
any and all additions, improvements, accessions, attachments, upgrades,
replacements and substitutions thereto and therefor.
(ii) In no event shall the aggregate of the Borrowing Bases be less than
all outstanding Funded Debt and in the event the amount of Funded Debt exceeds
the amount of the Borrowing Bases, Borrowers shall, within three (3) Business
Days of the date they become aware that such excess exists, take all steps
necessary to cause the amount of Funded Debt to be less than or equal to the
Borrowing Base, including if required, repaying a portion of the Loans
hereunder.
(iii) Sections 2.1(e) and 2.3(a) of this Agreement shall be modified such
that Borrowing Base Certificates shall only be required to be delivered within
thirty (30) days after the end of each fiscal quarter, provided that upon
request of Agent or SuperMajority Lenders, Borrowers shall also include
supporting schedules for use in determining the Borrowing Bases, and Section
2.3(b) shall be of no force or effect.
3.9 RECOLLATERIZATION OF LOANS. If at any time after the release of
Collateral pursuant to Section 3.8, either (x) Interpool and the Consolidated
Subsidiaries fail to comply with any of the financial covenants contained in
Sections 3.8(a), or (y) the releases consented to by the holders Funded Debt
referred to in Section 3.8(c) are not actually obtained within 45 days of
Borrowers' obtaining such consents, or (z) a Borrower causes, incurs or suffers
to be incurred or permits to exist any Lien on any of its property other than
(i) Permitted Liens; (ii) Liens between Borrowers and their subsidiaries; (iii)
Liens incurred subsequent to such release of Collateral, on after acquired
property, including purchase money Liens and Liens on after acquired property up
to 100% of the lower of cost or fair value; (iv) Liens existing on Property at
the time of acquisition of such Property, (v) Liens on the property of an entity
at the time it becomes a Subsidiary; (vi) Liens securing indebtedness owed by
Borrowers in an amount not to exceed 20% of Borrowers' Tangible Net Worth, as
determined from time to time, which Liens shall include without limitation Liens
existing on Property collateralizing Funded Debt and Private Placement Notes for
which Borrowers did not get the consents described in Section 3.8(a)(iii); and
(vii) extensions, renewals and refundings of the foregoing, then all Loans made
pursuant to the Loan Documents, shall be recollateralized by the Borrowers
pursuant to and in accordance with the terms and conditions of Section
2.1(a)(ii) and Sections 3.1 through 3.7 hereof, within 5 Business Days after
such failure to comply or the incurrence of such Lien.
SECTION 4. CLOSING
Closing under this Agreement is subject to the following conditions
precedent (all documents to be in form and substance satisfactory to Agent and
Borrowers and their respective counsel):
4.1 RESOLUTIONS, OPINIONS, AND OTHER DOCUMENTS. Borrowers shall have
delivered to Agent the following:
(a) this Agreement and the Revolving Credit Notes all properly executed;
(b) each document and agreement required to be executed under any provision
of this Agreement or any related agreement;
(c) certified copies of (i) resolutions of each Borrower's board of
directors authorizing the execution of this Agreement, the Revolving Credit
Notes and the Term Notes to be issued hereunder and each document required to be
delivered by any Section hereof and (ii) each Borrower's Articles or Certificate
of Incorporation and By-laws;
(d) an incumbency certificate for each Borrower identifying all Authorized
Officers, with specimen signatures;
(e) a written opinion of Borrowers' counsel addressed to Agent for the
benefit of all Lenders and opinions of such other counsel as Agent deems
necessary;
(f) certification by an Authorized Officer of Interpool that there has not
occurred any material adverse change in the operations and condition (financial
or otherwise) of any of the Borrowers since December 31, 1996;
(g) payment by Borrowers of all Expenses associated with the Credit
Facility incurred to the Closing Date;
(h) At Agent's request, Uniform Commercial Code, judgment, federal and
state tax lien searches against each Borrower, at Borrowers' expense, showing
that the Collateral is not subject to any Liens, together with Good Standing and
Corporate Tax Lien Search Certificates showing no tax Liens on each Borrower's
Property and showing each Borrower to be in good standing in each jurisdiction
where the failure to so qualify might have a material adverse affect on such
Borrower's business, financial condition, Property or Agent's and/or Lenders'
rights hereunder;
(i) Initial Borrowing Base Certificates dated the Closing Date evidencing
each Borrower's minimum borrowing availability under their respective Borrowing
Base as of the Closing Date;
(j) Amended and Restated Surety Agreements from Interpool, Limited and
Interpool Finance.
(k) at Borrowers' expense, obtain and deliver to Agent good standing
certificates showing each Borrower to be in good standing in its respective
state of incorporation and in each other state or foreign country in which it is
doing and presently intends to do business for which such Borrower's failure to
be so qualified might have material adverse effect on such Borrower's business,
financial condition, Property or Agent's and/or Lenders' rights hereunder.
4.2 ABSENCE OF CERTAIN EVENTS. At the Closing Date, no Event of Default or
Unmatured Event of Default hereunder shall have occurred and be continuing.
4.3 WARRANTIES AND REPRESENTATIONS AT CLOSING. The warranties and
representations contained in Section 5 as well as any other Section of this
Agreement shall be true and correct in all material respects on the Closing Date
with the same effect as though made on and as of that date. Borrowers shall not
have taken any action or permitted any condition to exist which would have been
prohibited by any Section hereof.
4.4 COMPLIANCE WITH THIS AGREEMENT. Borrowers shall have performed and
complied with all agreements, covenants and conditions contained herein
including, without limitation, the provisions of Sections 6 and 7 hereof, which
are required to be performed or complied with by Borrowers before or at the
Closing Date.
4.5 OFFICERS' CERTIFICATE. Agent shall have received a certificate dated
the Closing Date and signed by an Authorized Officer of each Borrower certifying
that all of the conditions specified in this Section have been fulfilled.
4.6 CLOSING. Subject to the conditions of this Section 4, the Credit
Facility shall be made available upon execution hereof and completion of the
conditions contained in Section 4.1 hereof (the "Closing Date").
4.7 NON-WAIVER OF RIGHTS. By completing the Closing hereunder, or by making
advances hereunder, Agent and Lenders do not thereby waive a breach of any
warranty or representation made by Borrowers hereunder or any agreement,
document, or instrument delivered to Agent or otherwise referred to herein, and
any claims and rights of Agent resulting from any breach or misrepresentation by
Borrowers are specifically reserved by Agent.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce Lenders to complete the Closing and make the initial Advances
under the Credit Facility to Borrowers, each Borrower warrants and represents to
Agent and Lenders that:
5.1 CORPORATE ORGANIZATION AND VALIDITY.
(a) Each Borrower is a corporation duly organized and validly existing
under the laws of its state (or other jurisdiction) of incorporation or
organization, as applicable, is duly qualified, is validly existing and in good
standing and has lawful power and authority to engage in the business it
conducts in each state and other jurisdiction where the nature and extent of its
business requires qualification, except where the failure to so qualify would
not have a material adverse effect on such Borrower's business, financial
condition, Property or prospects. A list of the states or other jurisdictions
where each Borrower is incorporated or organized is attached hereto as Exhibit
"5.1" and made a part hereof.
(b) The making and performance of this Agreement and related agreements,
and each document required by any Section hereof will not violate any law,
government rule or regulation, or the charter, minutes or bylaw provisions of
any Borrower or violate or result in a default (immediately or with the passage
of time) under any contract, agreement or instrument to which each Borrower is a
party, or by which each is bound, except, in the case of any law, rule,
regulation, contract, agreement or instrument, for such violations and defaults
that which separately or collectively would not have a material adverse effect
on such Borrower's business, financial condition, Property or prospects. No
Borrower is in violation of or has knowingly caused any Person to violate any
term of any agreement or instrument to which it or such Person is a party or by
which it may be bound or of its charter, minutes or its bylaws which violation
could have a material adverse effect on such Borrower's business, financial
condition, Property or prospects.
(c) Each Borrower has all requisite corporate power and authority to enter
into and perform this Agreement and to incur the obligations herein provided
for, and has taken all proper and necessary corporate action to authorize the
execution, delivery and performance of this Agreement, and the documents and
related agreements required hereby.
(d) This Agreement, the Revolving Credit Notes, the Term Notes to be issued
hereunder, and all related agreements and documents required to be executed and
delivered by Borrowers hereunder, when delivered, will be valid and binding upon
each Borrower and enforceable in accordance with their respective terms.
5.2 PLACES OF BUSINESS. The only places of business of each Borrower where
each keeps and intends to keep Books and Records concerning its Collateral, are
at the addresses listed in Exhibit "5.2" attached hereto and made a part hereof.
5.3 PENDING LITIGATION. There are no judgments or judicial or
administrative orders, proceedings or investigations (civil or criminal)
pending, or to the knowledge of any Borrower, threatened, against any Borrower
in any court or before any governmental authority or arbitration board or
tribunal which may materially and adversely affect the business, financial
condition, Property or prospects of such Borrower, or the ability of any
Borrower or Borrowers to perform under this Agreement. No Borrower is in default
with respect to any order of any court, governmental authority, regulatory
agency or arbitration board or tribunal, the effect of which would materially
and adversely affect the business, financial condition, Property or prospects of
such Borrower. To the best of each Borrowers' knowledge, no executive officer of
any Borrower has been indicted or convicted in connection with or is engaging in
any criminal conduct, or is currently subject to any lawsuit, proceeding or
under investigation in connection with any racketeering or other related type of
conduct or activity.
5.4 TITLE TO COLLATERAL. Each Borrower has good and marketable title in fee
simple (or its equivalent under applicable law) to all the Collateral it
respectively purports to own, free from Liens, except Permitted Liens and those
of Agent and/or Lenders, and free from the claims of any other Person except the
Lessees.
5.5 GOVERNMENTAL CONSENT. Neither the nature of any Borrower or of its
business or Property, nor any relationship between any Borrower and any other
Person, nor any circumstance affecting any Borrower in connection with the
issuance or delivery of the Revolving Credit Notes or Term Notes, is such as to
require a consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of any Borrower in
connection with the execution and delivery of this Agreement or the issuance or
delivery of the Revolving Credit Notes or Term Notes or other documents
contemplated hereby.
5.6 TAXES. All tax returns required to be filed by each Borrower in any
jurisdiction have in fact been filed, and all taxes, assessments, fees and other
governmental charges upon each Borrower, or upon any of its respective Property,
income or franchises, which are shown to be due and payable on such returns have
been paid, except for those taxes being contested in good faith with due
diligence by appropriate proceedings for which appropriate reserves have been
maintained under GAAP. No Borrower is aware of any proposed additional tax
assessment or tax to be assessed against or applicable to such Borrower that
might have a material adverse effect on such Borrower's business, financial
condition, Property or prospects.
5.7 FINANCIAL STATEMENTS. Interpool and its Consolidated Subsidiaries'
annual consolidated audited balance sheet as of December 31, 1996 and the
related statements of income and shareholder's equity as of such dates, all
accompanied by a report thereon from Interpool's independent certified public
accountants, (complete copies of which have been delivered to Agent), have been
prepared in accordance with GAAP and present fairly, accurately and completely
the financial position of Interpool and its Consolidated Subsidiaries as of such
dates and the results of their operations for such periods. The fiscal year for
all Borrowers currently ends on December 31. Each Borrower's federal tax
identification number is as listed on Exhibit "5.7" attached hereto and made a
part hereof.
5.8 FULL DISCLOSURE. Neither the financial statements referred to in
Section 5.7, nor this Agreement or related agreements and documents or any
written statement furnished by Borrowers or any of them to Agent in connection
with the negotiation of the Credit Facility and contained in any financial
statements or documents relating to any Borrower contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading.
5.9 SUBSIDIARIES. Borrowers have no Subsidiaries or Affiliates, except as
listed on Schedule C attached hereto and made a part hereof.
5.10 GUARANTEES, CONTRACTS, ETC.
(a) No Borrower owns or holds any material equity or long term debt
investments in, has any material outstanding advances to, or serves as
guarantor, surety or accommodation maker for any material obligations of, or has
any outstanding borrowings from, any Person other than another Borrower except
as recorded and described in the Financial Statements.
(b) No Borrower is a party to any contract or agreement, or subject to any
charter or other corporate restriction, which materially and adversely affects
its business, financial condition, Property or prospects.
(c) Except as otherwise specifically provided in this Agreement, no
Borrower has agreed or consented to cause or permit any of the Collateral
whether now owned or hereafter acquired to be subject in the future (upon the
happening of a contingency or otherwise) to a Lien not permitted by this
Agreement.
5.11 GOVERNMENT REGULATIONS, ETC.
(a) The use of the proceeds of and each Borrower's issuance of the
Revolving Credit Notes and/or the Term Notes will not directly or indirectly
violate or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, Regulations U, T, G and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. No Borrower owns or intends to
carry or purchase any "margin stock" within the meaning of said Regulation U.
(b) Each Borrower has obtained all licenses, permits, franchises or other
governmental authorizations necessary for the ownership of its Property and for
the conduct of its business, where the failure to obtain would have a material
adverse effect on the business, financial condition, Property or prospects of
such Borrower.
(c) As of the date hereof, no employee benefit plan ("Pension Plan"), as
defined in Section 3(2) of ERISA, maintained by any Borrower or under which any
Borrower could have any liability under ERISA (i) has failed to meet the minimum
funding standards established in Section 302 of ERISA, (ii) has failed to comply
with all applicable requirements of ERISA and of the Internal Revenue Code,
including all applicable rulings and regulations thereunder, (iii) has engaged
in or been involved in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code which would subject Borrowers to any
material liability, or (iv) has been terminated if such termination would
subject such Borrowers to any material liability. No Borrower has assumed, or
received notice of a claim asserted against such Borrower for, withdrawal
liability (as defined in Section 4207 of ERISA) with respect to any
multi-employer pension plan. Each Borrower has timely made all contributions
when due with respect to any multi-employer pension plan in which it
participates and no event has occurred triggering a claim against such Borrower
for withdrawal liability with respect to any multi-employer pension plan in
which such Borrower participates. All Employee Benefit Plans and multi- employer
pension plans to which any Borrower participates are listed on Exhibit "5.11"
attached hereto and made a part hereof.
(d) No Borrower is in violation of, has received written notice that it is
in violation of, or has knowingly caused any Person to violate, any applicable
statute, regulation or ordinance of the United States of America, or of any
state, city, town, municipality, county or of any other jurisdiction, or of any
agency, or department thereof, (including without limitation, environmental laws
and regulations), which may materially and adversely affect its business,
financial condition, Property or prospects.
(e) Each Borrower is current with all reports and documents required to be
filed with any state or federal securities commission or similar agency and is
in full compliance in all material respects with all applicable rules and
regulations of such commissions.
5.12 BUSINESS INTERRUPTIONS. Within five (5) years prior to the date
hereof, none of the business, Property or operations of any Borrower have been
materially and adversely affected in any way by any casualty, strike, lockout,
combination of workers, order of the United States of America, or any state or
local government, or any political subdivision or agency thereof, directed
against such Borrower. There are no pending or threatened labor disputes,
strikes, lockouts or similar occurrences or grievances affecting the business
being operated by any Borrower.
5.13 NAMES.
(a) Within five (5) years prior to the Closing Date, no Borrower has
conducted business under or used any other name (whether corporate or assumed)
except for the names shown on Exhibit "5.13(a)", attached hereto and made a part
hereof. Each Borrower is the sole owner of all names listed on such Exhibit
"5.13(a)" and, to the best of each Borrower's knowledge, any and all business
done and all invoices issued in such trade names are such Borrower's sales,
business and invoices. Each trade name of each Borrower represents a division or
trading style of such Borrower and not a separate corporate subsidiary or
affiliate or independent entity.
(b) All trademarks, patents or copyrights which any Borrower uses, plans to
use or has a right to use are owned by such Borrower except to the extent any
other Person has claims or rights in such Property, as such claims and rights
are described on such Exhibit "5.13(b)." To the best of each Borrower's
knowledge, no Borrower is in violation of any rights of any other Person with
respect to such Property.
5.14 OTHER ASSOCIATIONS. No Borrower is engaged or has an interest in any
joint venture or partnership with any other Person except as described on
Exhibit "5.14" hereto and made a part hereof.
5.15 ENVIRONMENTAL MATTERS. Except as disclosed on Exhibit "5.15" attached
hereto and made a part hereof, no Borrower has knowledge:
(a) of the presence of any Hazardous Substances on any of the real property
where any Borrower conducts operations or has its personal property, or
(b) of any on-site spills, releases, discharges, disposal or storage of
Hazardous Substances that have occurred or are presently occurring on any of
such real property, or
(c) of any spills, releases, discharges or disposal of Hazardous Substances
that have occurred, are presently occurring on any other real property as a
result of the conduct, action or activities of any Borrower.
As used herein, the term "Hazardous Substances" means any substances
defined or designated as hazardous or toxic waste, hazardous or toxic material,
hazardous or toxic substance or similar term, by any environmental statute, rule
or regulation of any governmental entity presently in effect and applicable to
such real property.
5.16 REGULATION O. No director, executive officer or principal shareholder
of any Borrower is a director, executive officer or principal shareholder of any
Lender. For the purposes hereof the terms "director" (when used with reference
to a Lender), "executive officer" and "principal shareholder" have the
respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.
5.17 CAPITAL STOCK. The authorized and outstanding shares of capital stock
of each Borrower is as set forth in the Prospectus or other information or
statements previously provided to the Agent. All of the issued and outstanding
capital stock of each Borrower has been duly and validly authorized and issued
and is fully paid and non-assessable and has been sold and delivered to the
holders thereof in compliance with, or under valid exemption from, all Federal
and state laws and the rules and regulations of all regulatory bodies thereof
governing the sale and delivery of securities. Except for the rights and
obligations set forth in the Prospectus and other financial statements
previously provided to Agent, there are no subscriptions, warrants, options,
calls, commitments, rights or agreements by which any Borrower or any of the
shareholders of such Borrower is bound relating to the issuance, transfer,
voting or redemption of shares of its capital stock or any pre-emptive rights
held by any Person with respect to the shares of capital stock of any Borrower.
Except as set forth in the Prospectus and other financial statements previously
provided to Agent, no Borrower has issued any securities convertible into or
exchangeable for shares of its capital stock or any options, warrants or other
rights to acquire such shares or securities convertible into or exchangeable for
such shares.
5.18 SOLVENCY. Each Borrower is solvent, able to pay its respective debts
as they become due, and has capital sufficient to carry on its respective
business and all business in which it is about to engage, and now owns Property
having a value both at fair valuation and at present fair salable value greater
than the amount required to pay such entity's debts. No Borrower will be
rendered insolvent by the execution and delivery of this Agreement or any of the
other documents executed in connection with this Agreement or by the
transactions contemplated hereunder or thereunder.
5.19 PERFECTION OF SECURITY INTEREST. Subject to the terms and conditions
of Sections 3.8 and 3.9 above, Agent, for the benefit of Lenders, has a first
perfected lien and security interest in the Collateral (including without
limitation each Lease and the Leased Property) subject to no other Lien except
Permitted Liens. Borrowers have taken and in the future, shall take all steps
necessary to maintain Agent's first perfected lien and security interest in the
Collateral, including, if required, perfecting the appropriate Borrower's
security interest through filing financing statements, amendments thereto, or
assignments and/or continuations thereof and recording of the documentation
necessary to perfect such Borrower's lien. Any Collateral failing to comply with
this Section shall immediately cease to be included in the Borrowing Base.
5.20 LEASES AND LEASED PROPERTY. With respect to each Lease and/or items of
Leased Property, the Borrower named as the lessor therein and/or thereof,
represents and warrants that to the best of its knowledge, information and
belief:
(a) Each Lease is genuine, based on contracts that are enforceable in
accordance with its terms against the Lessee and the Leased Property named and
referenced therein, constitutes the entire agreement for the leasing of the
Leased Property thereby covered, has not been altered or amended, except as set
forth in the related schedules, and Borrower's Books and Records relating
thereto are accurate, complete and genuine;
(b) There does not exist a sole original Lease and possession of any
counterpart is not sufficient to constitute possession of the sole original for
"Chattel Paper" under the UCC;
(c) Except as otherwise consented to by Agent in writing (after approval
from the SuperMajority Lenders), the availability under the Borrowing Base shall
be reduced by the Borrowing Base value attributable to that portion of the
leases with the same Lessee which in the aggregate with all other leases between
any Borrower and such Lessee, produce reported revenues in excess of 10% of the
year to date total revenues calculated from the Financial Statements;
(d) The original amount and unpaid balance of each Lease recorded on
Borrowers' Books and Records and on any statement or schedule delivered to Agent
in connection therewith is the true and correct amount actually owed to
Borrowers;
(e) The amounts due under the Leases are not subject to any claim or
reduction, counterclaim, setoff, recoupment, or any other claim or allowance
which may have a material adverse affect on the Borrowers, or any of them;
(f) Each item of Leased Property has not been lost, stolen, or destroyed;
(g) Each Lease is a valid, legal and binding obligation of the Borrower
named therein and the corresponding Lessee, and is enforceable against such
Borrower and such Lessee in accordance with its terms. Such Borrower is the sole
owner of each of the Leases and has the authority to assign all of its right,
title and interest therein upon the terms herein set forth;
(h) Each of the Leases and all Leased Property which is the subject matter
thereof at the time of its assignment to Lenders (so long as the Loans remain
collateralized) and at all times when they are included in the Borrowing Bases
(even if the Loans become unsecured by Sections 3.8 and 3.9 hereof) will be free
and clear of any and all assignments, options, rights, or other Liens
whatsoever, except Lenders and/or Agent's and Permitted Liens;
(i) All rentals, fees, costs, expenses and charges paid or payable by the
Lessee under any Lease, including without limitation, any brokerage and other
fees paid to such Borrower do not violate any laws relating to the maximum fees,
costs, expenses or charges that can be charged in any state in which any Leased
Property is located or in which the corresponding Lessee is located, or in which
a transaction was consummated, or in any other state which may have jurisdiction
with respect to any such Leased Property, Lease or Lessee;
(j) Each item of Leased Property has been insured in the ordinary course of
Borrowers' or the corresponding Lessee's business; and
(k) At any time when the Collateral secures the Obligations, unless
otherwise consented to by Agent in writing (after approval from the
SuperMajority Lenders), no Leased Property constitutes Rolling Stock requiring a
filing with any federal governmental authority in order to protect Borrowers' or
Lenders' interests therein.
SECTION 6. BORROWERS' AFFIRMATIVE COVENANTS
Each Borrower covenants that until all of Borrowers' Obligations to Lenders
are paid and satisfied in full and the Credit Facility has been terminated:
6.1 PAYMENT OF TAXES AND CLAIMS. Each Borrower shall pay, before they
become delinquent,
(a) all taxes, assessments, fines, costs, penalties and governmental
charges or levies imposed upon it or upon such Borrower's Property, and
(b) all claims or demands, which in the aggregate exceed $2,000,000, of
materialmen, mechanics, carriers, warehousemen, landlords and other Persons
entitled to the benefit of statutory or common law Liens, which, if unpaid,
would result in the imposition of a Lien on Borrowers', or any of their,
Properties;
Provided, however, that such Borrower shall not be required to pay any such
tax, assessment, charge, levy, claim or demand if the amount, applicability or
validity thereof shall at the time be contested in good faith and by appropriate
proceedings by such Borrower, and if such Borrower shall have set aside on its
books adequate reserves in respect thereof, in accordance with GAAP; which
deferment of payment is permissible but if any Lien other than a Permitted Lien,
has been entered or such Borrower's title to, and its right to use, the
Collateral are adversely affected thereby, such Collateral shall immediately
cease to be included in the Borrowing Base.
6.2 MAINTENANCE OF PROPERTIES AND CORPORATE EXISTENCE.
(a) PROPERTY - Each Borrower shall maintain or cause to be maintained its
Property in good condition and shall make or cause to be made all necessary
renewals, replacements, additions, betterments and improvements thereto and will
pay and discharge when due the cost of repairs and maintenance to its Property,
all as in the judgment of such Borrower may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times. So long as no Event of Default has occurred which has not been
expressly waived or excused, Borrowers shall have the sole discretion as to
repairing or disposing of damaged Property comprising a portion of the
Collateral.
(b) PROPERTY INSURANCE - Each Borrower shall maintain insurance on the
Collateral against fire, flood, casualty and such other hazards in such amounts,
with such deductibles and with such insurers as are customarily used by
companies operating in the same industry as Borrowers. At or prior to Closing,
Borrowers shall furnish Agent with certificates of insurance certified as true
and correct and being in full force and effect as of the Closing Date or such
other evidence of insurance as Agent may require. In the event any Borrower
fails to procure or cause to be procured any such insurance or to timely pay or
cause to be paid the premium(s) on any such insurance, Agent (on behalf of
Lenders) may do so for such Borrower, but such Borrower shall continue to be
liable for the same. The policies of all such casualty insurance shall contain
standard Lender's Loss Payable Clauses issued in favor of Agent (on behalf of
Lenders) under which all losses thereunder shall be paid to Agent (on behalf of
Lenders) as Agent's interest may appear. So long as no Event of Default has
occurred which has not been expressly waived or excused hereunder and subject to
Section 2.7(d) and (e), Borrowers shall be permitted to collect and retain
insurance proceeds. Such policies shall expressly provide that the requisite
insurance cannot be altered or canceled without thirty (30) days prior written
notice to Agent. Each Borrower hereby appoints Agent as such Borrower's
attorney-in-fact, exercisable at Agent's option to endorse any check which may
be payable to any Borrower in order to collect the proceeds of such insurance
and any amount or amounts collected by Agent pursuant to the provisions of this
paragraph may be applied by Agent to Borrowers' Obligations. Each Borrower
further covenants that all prorated and currently due insurance premiums owing
under its current casualty policy have been paid. Borrowers also agree to notify
Agent, promptly, upon any Borrower's receipt of a notice of termination,
cancellation, or non-renewal from its insurance company of any such policy.
(c) PUBLIC LIABILITY INSURANCE - Each Borrower shall maintain, and shall
deliver to Agent upon Agent's request evidence of, public liability, insurance
in such amounts as is customary for companies in the same or similar businesses
located in the same or similar area.
(d) FINANCIAL RECORDS - Borrowers shall keep current and accurate books of
records and accounts in which full and correct entries will be made of all of
their business transactions, and will reflect in their financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP.
No Borrower shall change its respective fiscal year end date without prior
written notice to Agent and Lenders.
(e) CORPORATE EXISTENCE AND RIGHTS - Each Borrower shall do (or cause to be
done) all things necessary to preserve and keep in full force and effect its
existence, good standing, rights and franchises.
(f) COMPLIANCE WITH LAWS - Each Borrower shall be in compliance with any
and all laws, ordinances, governmental rules and regulations, and court or
administrative orders or decrees to which it is subject, whether federal, state
or local, (including without limitation environmental or environmental-related
laws, statutes, ordinances, rules, regulations and notices), and shall obtain
and maintain any and all licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its Property or to the conduct of
its businesses, which violation or failure to obtain may materially adversely
affect the business, Property, financial conditions or prospects of such
Borrower.
6.3 BUSINESS CONDUCTED. Each Borrower shall continue in the business
presently operated by it using its best efforts to maintain its customers and
goodwill. No Borrower shall engage, directly or indirectly, in any material
respect (including without limitation the making or holding of investments) in
any line of business substantially different from the transportation and/or
equipment leasing businesses.
6.4 LITIGATION. Borrowers shall give prompt notice to Agent of any
litigation claiming in excess of $5,000,000 which is not covered by insurance
from any Borrower, or which may otherwise have a material adverse effect on the
business, financial condition, Property or prospects of any Borrower.
6.5 TAXES.
(a) Notwithstanding any other provision of this Agreement other than 6.5(f)
and (g), any and all payments by Borrowers hereunder shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imports or withholding taxes, and all liabilities with respect thereto,
excluding taxes imposed on Agent's or any Lender's net income and franchise
taxes imposed on Agent or any Lender by the United States or any jurisdiction
under the laws of which it is organized or in which an office is located or any
political subdivision thereof (all such nonexcluded taxes, levies, imports,
withholding taxes and liabilities being hereinafter referred to as "Taxes"). If
Borrowers shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender or Agent (i) the sum payable shall be
increased by the amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
6.5) such Lender or Agent shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrowers shall make such
deductions and (iii) Borrowers shall pay the full amount deducted to the
relevant taxing authority or other governmental authority in accordance with
applicable law.
(b) In addition, Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Borrowers will indemnify each Lender and Agent for the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 6.5) paid by such Lender or
Agent in respect of any and all payments made by Borrowers hereunder, as the
case may be, and any liability (including penalties, interest and expenses other
than those resulting from the failure of a Lender or Agent to pay any Taxes or
Other Taxes for which it shall have received an indemnity payment hereunder)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Such indemnification shall be made
promptly after the date any Lender or Agent, as the case may be, makes written
demand therefor. If a Lender or Agent shall become aware that it is entitled to
receive a refund it shall notify Borrowers and shall, promptly after receipt of
a request by Borrowers, apply for and pursue such a refund at Borrowers'
expense. If any Lender or Agent receives a refund in respect of any Taxes or
Other Taxes for which such Lender or Agent has received payment from Borrowers
hereunder it shall promptly upon receipt repay such refund to Borrowers without
interest, except to the extent interest shall have accompanied such refund,
provided that Borrowers, upon the request of such Lender or Agent, agree to
return such refund (plus penalties, interest or other charges) to such Lender or
Agent in the event such Lender or Agent is required to repay such refund.
(d) Within 45 days after the date of any payment of Taxes or Other Taxes
withheld by Borrowers in respect of any payment to any Lender or Agent,
Borrowers will furnish to the Agent, the original or a certified copy of any
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 6.5 shall
survive the payment in full of principal and interest hereunder.
(f) On or prior to the date it becomes a party to this Agreement, each
Lender that is organized outside of the United States shall deliver to Borrowers
such certificates, documents or other evidence, as required by the Code or
Treasury Regulations issued pursuant thereto, including Internal Revenue Service
Form 4224 or 1001 and any other certificate or statement or exemption required
by Treasury Regulation Section 1.1441-4(a) or Section 1.1441-6(c) or any
subsequent version thereof, properly completed and duly executed by such Lender
establishing that such payment is (i) not subject to withholding under the Code
because such payment is effectively connected with the conduct by such Lender of
a trade or business in the United States or (ii) totally exempt from United
States Federal withholding tax under a provision of an applicable tax treaty. In
addition, each such Lender shall, if legally able to do so, thereafter deliver
such certificates, documents or other evidence from time to time establishing
that payments received hereunder are not subject to such withholding upon
receipt of a written request therefor from Borrowers or Agent. Unless Borrowers
and Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under the Revolving Credit Notes are not subject to
United States Federal withholding tax under an applicable tax treaty, Borrowers
or Agent shall withhold taxes from such payments at the applicable statutory
rate.
(g) Borrowers shall not be required to pay any additional amounts to any
Lender in respect of United States Federal withholding tax pursuant to this
Section 6.5 if the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to deliver the certificate, documents or
other evidence specified in this Section 6.5 unless such failure is attributable
to (i) a change in applicable law, regulation or official interpretation thereof
or (ii) an amendment or modification to or a revocation of any applicable tax
treaty or a change in official position regarding the application or
interpretation thereof, in each case on or after the date such Lender becomes a
party to this Agreement.
(h) Any Lender claiming any additional amounts payable pursuant to this
Section 6.5 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by Borrowers or to
change the jurisdiction of its applicable lending office if the making of such
filing or change would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue and would not result in the
incurrence by such Lender of any cost for which Borrowers do not provide such
security or indemnity as may be reasonably required by the Lender to indemnify
it in full for such cost and would not in the judgment of such Lender be
otherwise disadvantageous to it. Each Lender agrees with reasonable promptness
to notify Borrowers of any determination which it shall make to make any claim
for additional amounts payable pursuant to this Section 6.5.
(i) In the event any Lender shall make any claim for the payment of
additional amounts under this Section 6.5, Borrowers may require such Lender to
assign (in accordance with Section 9.16) its interests, rights and obligations
hereunder (including its Pro Rata Share and the Loans at the time owing to it
and the Revolving Credit Note and Term Notes held by it) to a substitute Lender,
provided that (i) such assignment shall not conflict with or violate any law,
rule or regulation or order of any court or other governmental authority, (ii)
Borrowers shall have received the written consent of Agent to such assignment,
which shall not be unreasonably withheld and (iii) such Lender shall have been
paid all amounts owed to it hereunder and under the other Loan Documents.
6.6 BANK ACCOUNTS. Each Borrower shall maintain a depository and
disbursement account(s) with Agent.
6.7 EMPLOYEE BENEFIT PLANS. Each Borrower will (a) fund all its Pension
Plan(s) in a manner that will satisfy the minimum funding standards of Section
302 of ERISA, or will promptly satisfy any accumulated funding deficiency that
arises under Section 302 of ERISA, (b) furnish Agent, promptly upon Agent's
request of the same, with copies of all reports or other statements filed with
the United States Department of Labor, the Pension Benefit Guaranty Corporation
("PBGC") or the Internal Revenue Service ("IRS") with respect to all pension
plan(s), or which any Borrower, or any member of a Controlled Group (as defined
by ERISA), may receive from the United States Department of Labor, the IRS or
the PBGC, with respect to all such pension plan(s), and (c) promptly advise
Agent of the occurrence of any reportable event (as defined in Section 4043 of
ERISA, other than a reportable event for which the thirty (30) day notice
requirement has been waived by the PBGC) or prohibited transaction (under
Section 406 of ERISA or Section 4975 of the Internal Revenue Code) with respect
to any such Pension Plan(s) and the action which such Borrower proposes to take
with respect thereto. Each Borrower will make all contributions when due with
respect to any multi-employer pension plan in which it participates and will
promptly advise Agent (i) upon its receipt of notice of the assertion against
such Borrower of a claim for withdrawal liability, (ii) upon the occurrence of
any event which, to the best of each Borrower's knowledge, would trigger the
assertion of a claim for withdrawal liability against any Borrower, and (iii)
upon the occurrence of any event which, to the best of each Borrower's
knowledge, would place any Borrower in a Controlled Group as a result of which
any member (including such Borrower) thereof may be subject to a claim for
withdrawal liability, whether liquidated or contingent.
6.8 WARRANTIES FOR FUTURE ADVANCES. Each request by a Borrower for an
Advance under the Credit Facility in any form following the Closing Date, which
after giving effect to such Advance, causes the aggregate amount of all Loans to
increase, shall constitute an automatic representation and warranty by Borrowers
to the effect that:
(a) There has been no material adverse change in any Borrower's operations
or condition (financial or otherwise) since the date of delivery of the most
recent Financial Statements.
(b) No Event of Default which has not been cured or waived, or Unmatured
Event of Default then exists;
(c) Each Advance is within and complies with the terms and conditions of
this Agreement including without limitation the notice provisions contained in
Section 2.3 hereof;
(d) No Lien, other than Permitted Liens, including, without limitation, any
federal tax Lien, has been imposed on any Borrower which may, in any way, take
priority over or otherwise adversely affect in any way, Agent's and/or Lenders'
security interests in or Liens on any Collateral then comprising a portion of
the Borrowing Base; and
(e) Each representation and warranty set forth in Section 5 of this
Agreement is then true and correct in all material respects.
6.9 INCURRENCE OF ADDITIONAL FUNDED DEBT. Borrowers will not incur
additional Funded Debt (including an Advance, if after giving effect to such
Advance, the aggregate amount of all Loans increases) unless after giving effect
thereto:
(a) The aggregate of Funded Debt does not exceed 400% of Tangible Net
Worth; and
(b) The pro forma Fixed Charge Coverage Ratio based upon the sum of the
four most recent quarters as shown in the most recently available quarterly
Financial Statements is not less than 1.5:1. This ratio is calculated by
dividing the sum of Earnings Available for Fixed Charges plus depreciation,
divided by the sum of Fixed Charges and pro forma Fixed Charges related to the
Funded Debt to be incurred.
6.10 FINANCIAL COVENANTS. Interpool and its Consolidated Subsidiaries shall
maintain and comply with the following financial covenants as reflected on and
computed from the Financial Statements:
(a) TANGIBLE NET WORTH: Interpool and the Consolidated Subsidiaries shall
have and maintain at all times a Tangible Net Worth on a consolidated basis,
measured quarterly as of the last day of each fiscal quarter, of not less than
$125,000,000.
(b) FIXED CHARGE COVERAGE RATIO: Interpool and the Consolidated
Subsidiaries shall have and maintain, on a consolidated basis, a Ratio of
Earnings Available for Fixed Charges plus depreciation to Fixed Charges measured
quarterly for the sum of the four immediately preceding fiscal quarters as shown
in the most recently available quarterly Financial Statements of not less than
1.5 to 1.
6.11 FINANCIAL AND BUSINESS INFORMATION. Borrowers shall deliver to Agent
(and Lenders if so indicated) the following:
(a) FINANCIAL STATEMENTS AND COLLATERAL REPORTS: such data, reports,
statements and information, financial or otherwise, as Agent may reasonably
request, including, without limitation:
(i) within one hundred (100) days after the end of each fiscal year of
Interpool and its Consolidated Subsidiaries, deliver to Agent and each Lender,
Financial Statements for such year including the balance sheet as at the end of
such fiscal year and a statement of cash flows and income statement for such
fiscal year, audited and unqualifiedly certified by a "Big Six" independent
public accounting firm of recognized standing, selected by Borrowers to have
been prepared in accordance with GAAP, and such independent public accountants
shall also provide an unqualified opinion that the Financial Statements present
fairly the Borrowers financial condition. Such independent accountants shall
also provide a statement certifying that nothing has come to their attention to
cause them to believe that calculations contained in the Officers Certificates
referenced in Section 6.12 below are inaccurate.
(ii) within sixty (60) days of the end of each fiscal quarter, deliver to
Agent, for Interpool and its Consolidated Subsidiaries accounts receivable aging
report, fleet utilization report, and Lessee concentration report, certified by
an Authorized Officer of Interpool as true and correct, all in form and
substance reasonably satisfactory to Agent;
(iii) within sixty (60) days after the end of each of the first three
fiscal quarters, deliver to Agent and each Lender, Interpool and the
Consolidated Subsidiaries' internally prepared quarterly Financial Statements,
including balance sheet, income statement and statements of cash flows.
(iv) within one hundred (100) days after the end of each fiscal year
audited annual financial statements for Limited if being prepared for such year.
(b) NOTICE OF EVENT OF DEFAULT - promptly upon becoming aware of the
existence of any condition or event which constitutes an Event of Default or
Unmatured Event of Default under this Agreement, a written notice specifying the
nature and period of existence thereof and what action Borrowers are taking (and
propose to take) with respect thereto;
(c) NOTICE OF CLAIMED DEFAULT - promptly upon receipt by any Borrower,
notice of default, oral or written, given to such Borrower by any creditor for
borrowed money in excess of $2,000,000;
(d) SECURITIES AND OTHER REPORTS - if any Borrower shall be required to
file reports with the Securities and Exchange Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, promptly upon
its becoming available, one copy of each financial statement, report, notice or
proxy statement sent by such Borrower to stockholders generally, and, a copy of
each regular or periodic report, and any registration statement, or prospectus
in respect thereof, filed by such Borrower with any securities exchange or with
federal or state securities and exchange commissions or any successor agency.
6.12 OFFICERS' CERTIFICATES. Along with the set of Financial Statements
delivered to Agent at the end of each fiscal quarter and fiscal year pursuant to
Section 6.11(a) hereof, deliver to Agent a certificate (in the form of Exhibit
"6.12" attached hereto and made a part hereof) from an Authorized Officer of
Interpool setting forth:
(a) COVENANT COMPLIANCE - the information (including detailed calculations)
required in order to establish whether Borrowers are in compliance with the
requirements of Sections 6.9 and 6.10 as of the end of the period covered by the
Financial Statements then being furnished (and any exhibits appended thereto)
under Section 6.11; and
(b) EVENT OF DEFAULT - that the signer in his capacity as an officer of
each Borrower has reviewed the relevant terms of this Agreement, and has made
(or caused to be made under his supervision) a review of the transactions and
conditions of Borrowers from the beginning of the accounting period covered by
the financial statements being delivered therewith to the date of the
certificate, and that such review has not disclosed the existence during such
period of any condition or event which constitutes an Event of Default or
Unmatured Event of Default or if any such condition or event exists, specifying
the nature and period of existence thereof and what action Borrowers have taken
or propose to take with respect thereto.
6.13 INSPECTION. Each Borrower will permit any of Agent's or any Lender's
officers or other representatives to visit and inspect any of the locations of
any Borrower or any Collateral in the possession or control of any Borrower
during regular business hours, to examine and audit all of such Borrower's books
of account, records, reports and other papers relating to the Collateral, to
make copies and extracts therefrom and to discuss its affairs, finances and
accounts with its officers, employees and independent certified public
accountants. Agent will notify Lenders of each scheduled inspection and to the
extent reasonably practicable, representatives of each Lender may accompany
Agent during each such inspection. After the occurrence of any Event of Default,
all such inspections shall be at Borrowers' expense at the standard rates
charged by the Agent for such activities (plus the Agent's out-of-pocket
expenses).
6.14 MATERIAL ADVERSE DEVELOPMENTS. Each Borrower agrees that immediately
upon becoming aware of any development or other information which would
reasonably be expected to materially and adversely affect its businesses,
financial condition, Property, prospects or its ability to perform under this
Agreement, it shall give to Agent telephonic or telegraphic notice specifying
the nature of such development or information and such anticipated effect. In
addition, such verbal communication shall be confirmed by written notice thereof
to Agent on the next business day after such verbal notice is given.
6.15 PLACES OF BUSINESS. Each Borrower shall give thirty (30) days prior
written notice to Agent of any changes in the location of the places where Books
and Records are kept, or its executive offices or other principal places of
business.
6.16 SALE OF COLLATERAL. Subject to the effect of the release of Collateral
contemplated by Sections 3.8 and 3.9, each Borrower shall ▇▇▇▇ its books and
records to indicate Agent's security interest in the Collateral, including the
Leases and Leased Property. Unless Agent consents otherwise in writing, the
respective Borrower shall retain title at all times to Leases and its Leased
Property subject only to the rights of the Lessees; provided however, that so
long as no Event of Default has occurred which has not been expressly waived or
excused or Unmatured Event of Default has occurred and is continuing, Borrowers
may, subject to the prepayment provisions set forth herein, sell Leases and
Leased Property, and provided further that if required pursuant to Sections
2.7(d) and 2.7(e), all proceeds from the sale of such Leases and/or Leased
Property shall be used to reduce Borrowers' Obligations to Lenders attributable
to Lenders' financing or refinancing of such Leases and/or Leased Property.
SECTION 7. BORROWERS' NEGATIVE COVENANTS:
Each Borrower covenants that until all of Borrowers' Obligations to Lenders
are paid and satisfied in full and the Credit Facility has been terminated,
that:
7.1 MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION.
(a) No Borrower shall sell, lease, license, transfer or otherwise dispose
of its Property other than Property sold in the ordinary course or ordinary
operation of such Borrower's business, without Agent's prior written consent.
(b) No Borrower shall merge or consolidate with, or acquire, any other
Person except among themselves, or commence a dissolution or liquidation;
provided however that a merger or acquisition may occur so long as a Borrower is
the surviving corporation and after giving effect to such merger or acquisition,
no Event of Default or Unmatured Event of Default shall be existing.
7.2 LIENS AND ENCUMBRANCES. At any time when the Collateral secures the
Obligations, no Borrower shall: (i) execute a negative pledge agreement with any
Person covering any of the Collateral, or (ii) cause or permit or agree or
consent to cause or permit in the future (upon the happening of a contingency or
otherwise) the Collateral, whether now owned or hereafter acquired, to be
subject to a Lien or be subject to any claim except for Permitted Liens. As used
herein, "Permitted Liens" means:
(a) Liens securing taxes, assessments or governmental charges or levies or
the claims or demands of materialmen, mechanics, carriers, warehousemen,
landlords, and other like persons, provided the payment thereof is not at the
time required by Section 6.1;
(b) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment, insurance, social security
and other like laws;
(c) Liens arising by virtue of the lessees' rights to use and possess the
equipment in accordance with the terms of the corresponding leases.
7.3 NEGATIVE PLEDGE. Interpool shall not pledge the stock of either Limited
or Trac Lease or alter the existing capital structure of any Borrower such that
Interpool owns less than 70% of the common stock of Limited and 70% of the
common stock of Trac Lease. Limited shall not pledge the stock of Interpool
Finance or alter the existing capital structure of Interpool Finance such that
Limited owns less than 70% of the common stock of Interpool Finance.
7.4 TRANSACTIONS WITH AFFILIATES OR SUBSIDIARIES.
No Borrower shall enter into any transaction with any Subsidiary or other
Affiliate including, without limitation, the purchase, sale, lease or exchange
of Property, or the loaning or giving of funds to any Affiliate or any
Subsidiary, unless the transaction is in the ordinary course of and pursuant to
the reasonable requirements of such Borrower's business and upon terms
substantially the same and no less favorable to such Borrower as it would obtain
in a comparable arm's-length transaction with any Person not an Affiliate or a
Subsidiary, and so long as such transaction is not prohibited hereunder.
7.5 DISTRIBUTIONS, REDEMPTIONS AND OTHER INDEBTEDNESS. No Borrower or its
Subsidiaries shall: (a) declare or pay or make any form of Distribution to its
shareholders, their successors or assigns other than dividends to a Borrower by
a Subsidiary (which may also be a Borrower); or (b) make any payments of
principal or interest on any Subordinated Debt which is in violation of, or is
inconsistent with, the terms of the Subordinated Debt; provided however that so
long as no Event of Default has occurred which has not been expressly waived or
excused or no Unmatured Event of Default has occurred and is continuing,
Borrowers in the aggregate may make Distributions in an amount not to exceed the
sum of $5,000,000 plus the sum of (i) 75% of Net Earnings of Interpool and its
Subsidiaries (minus 100% of any net loss) subsequent to June 30, 1993; (ii) the
net cash proceeds received after June 30, 1993 from the sales by a Borrower or
its subsidiaries (other than to Interpool or its Subsidiaries) of shares of
common stock and preferred stock, including without limitation,
company-obligated mandatorily redeemable preferred shares in grantor trusts of
Interpool or any Subsidiary; and (iii) the face value of any debt exchanged or
converted into common or preferred stock, including without limitation,
company-obligated mandatorily redeemable preferred shares in grantor trusts of
Interpool or any Subsidiary.
7.6 LOANS AND INVESTMENTS. No Borrower shall make or have outstanding
loans, advances, extensions of credit or capital contributions to, or
investments in, any Person, which are prohibited by the Note Purchasers,
pursuant to the terms of the Note Purchase Agreement dated as of November 30,
1993 between the Borrowers as Sellers and the Note Purchasers listed on Schedule
1 thereto, as amended and as may exist from time to time.
7.7 USE OF LENDERS' NAME. No Borrower shall use any Lender's name (or the
name of any of any Lender's Affiliates) or Agent's name in connection with any
of its business operations except to identify the existence of the Credit
Facility and the names of the Lenders and Agent in the ordinary course of
Borrowers' business. Nothing herein contained is intended to permit or authorize
any Borrower to make any contract on behalf of any Lender or Agent.
7.8 MISCELLANEOUS COVENANTS.
(a) No Borrower shall become or be a party to any contract or agreement
which at the time of becoming a party to such contract or agreement materially
impairs such Borrower's ability to perform under this Agreement, or under any
other instrument, agreement or document to which such Borrower is a party or by
which it is or may be bound.
(b) No Borrower shall carry or purchase any "margin stock" within the
meaning of Regulations U, G, T or X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II.
7.9 CHANGE OF OWNERSHIP INTERESTS. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or any of them, collectively,
shall not at any time hold less than voting control with respect to all classes
of capital stock of Interpool entitled to vote generally.
SECTION 8. DEFAULT
8.1 EVENTS OF DEFAULT. Each of the following events shall constitute an
event of default ("Event of Default") and Agent shall thereupon have the option,
and the SuperMajority Lenders shall have the right to cause Agent, to declare
the Obligations immediately due and payable, all without demand, notice,
presentment or protest or further action of any kind (it also being understood
that the occurrence of any of the events or conditions set forth in
subparagraphs (j), (k) or (l) shall automatically cause an acceleration of the
Obligations):
(a) PAYMENTS - if any Borrower fails to make any payment of principal or
interest, including any Overadvance, under the Credit Facility within five (5)
days after the date such payments are due and payable; or
(b) OTHER CHARGES - if any Borrower fails to pay any other charges, fees,
Expenses or other monetary obligations owing to any Lender or Agent arising out
of or incurred in connection with this Agreement within five (5) days after the
date such payment is due and payable; or
(c) PARTICULAR COVENANT DEFAULTS - if any Borrower fails to perform, comply
with or observe any covenant or undertaking contained in this Agreement,
provided however, that with respect to covenants contained in Sections 6.1 and
6.2(e) only, Borrowers shall have 30 days from the occurrence of such failure to
comply with or observe such covenant; or
(d) INTENTIONALLY OMITTED.
(e) INTENTIONALLY OMITTED.
(f) WARRANTIES OR REPRESENTATIONS - if any warranty, representation or
other statement by or on behalf of any Borrower or any employee, officer or
agent thereof contained in or pursuant to this Agreement, or in any document,
agreement or instrument furnished in compliance with, relating to, or in
reference to this Agreement, including without limitation any financial
statement or certificate, is false, erroneous, or misleading in any material
respect when made; or
(g) AGREEMENTS WITH OTHERS - (i) if any Borrower shall default beyond any
grace period under any agreement with any creditor for borrowed money in excess
of $2,000,000 and (A) such default consists of the failure to pay any principal,
premium or interest with respect to such indebtedness, including without
limitation, the Subordinated Debt or (B) such default consists of the failure to
perform any covenant or agreement with respect to such indebtedness, including
without limitation, Subordinated Debt if the effect of such default is to cause
such Borrower's obligations which are the subject thereof to become due prior to
its maturity date or prior to its regularly scheduled date of payment or (ii) an
Event of Default occurs pursuant to Section 10.17 below; or
(h) OTHER AGREEMENTS WITH LENDERS - if any Borrower breaches or violates
the terms of, or if a default or an event of default, occurs under, any other
existing or future agreement (related or unrelated) between any Borrower or
among Borrowers and Agent or any Lender or all Lenders; or
(i) JUDGMENTS - if any final judgment or judgments for the payment of money
in an aggregate amount in excess of $2,000,000 which is/are not fully and
unconditionally covered by insurance or for which such Borrowers have not
established cash or cash equivalent reserves in the amount of such judgment(s),
shall be rendered and such judgment(s) shall continue unsatisfied and in effect
for a period of sixty (60) days without being vacated, discharged, satisfied or
bonded pending appeal; or
(j) ASSIGNMENT FOR BENEFIT OF CREDITORS, ETC. - if any Borrower makes or
proposes an assignment for the benefit of creditors generally, offers a
composition or extension to creditors, or makes or sends notice of an intended
bulk sale of any business or assets now or hereafter owned or conducted by any
Borrower which might materially and adversely affect all Borrowers on a
consolidated basis; or
(k) BANKRUPTCY, DISSOLUTION, ETC. - upon the commencement of any action for
the dissolution or liquidation of any Borrower, or the commencement of any
proceeding to avoid any transaction entered into by any Borrower, or the
commencement of any case or proceeding for reorganization or liquidation of any
Borrower's debts under the Bankruptcy Code or any other state, federal or other
law applicable to any such Borrower, now or hereafter enacted for the relief of
debtors, whether instituted by or against such Borrower; provided, however, that
such Borrower shall have sixty (60) days to obtain the dismissal or discharge of
involuntary proceedings filed against it, it being understood that during such
sixty (60) day period, no Lender shall be obligated to make Advances hereunder
and Agent may seek adequate protection in any such proceeding; or
(l) RECEIVER - upon the appointment of a receiver, liquidator, or similar
official for any Borrower or for any of any Borrower's Property; or
(m) EXECUTION PROCESS, SEIZURE, ETC. - the issuance of any execution,
distraint process or seizure against any Property of any Borrower in the
possession of Agent or any Lender valued in excess of $500,000; or
(n) INVESTIGATIONS - any indication or evidence received by Agent or any
Lender that reasonably leads it to believe any Borrower may have directly or
indirectly been engaged in any type of activity which, would be reasonably
likely to result in the forfeiture of any Property of any Borrower to any
governmental entity, federal, state or local which might have a material adverse
affect on the Borrowers, or any of them, or the rights of Agent and/or Lenders
hereunder.
8.2 CURE. Nothing contained in this Agreement or the Loan Documents shall
be deemed to compel Agent and/or Lenders to accept a cure of any Event of
Default hereunder.
8.3 RIGHTS AND REMEDIES ON DEFAULT.
(a) In addition to all of the rights, options and remedies granted or
available to Agent or Lenders under this Agreement or the Loan Documents, or
otherwise available at law or in equity, upon or at any time after the
occurrence and during the continuance of an Event of Default or Unmatured Event
of Default, Agent shall cease and withhold making Advances under the Credit
Facility until it receives the prior written direction from the SuperMajority
Lenders to continue to make Advances. In addition, at all times when the
Collateral secures the Obligations, Agent may, and the SuperMajority Lenders
shall have the right to cause Agent to request, and Borrowers shall immediately
deliver to Agent upon such request, all original counterparts of each Lease
other than those in possession of the Lessees.
(b) In addition to all other rights, options and remedies granted or
available to Agent under this Agreement or the Loan Documents (each of which is
also then exercisable by Agent), Agent may, in its discretion, and the
SuperMajority Lenders shall have the right to cause Agent to, upon or at any
time after the occurrence and during the continuance of an Event of Default, to
terminate the Credit Facility.
(c) In addition to all other rights, options and remedies granted or
available to Agent under this Agreement or the Loan Documents (each of which is
also then exercisable by Agent), Agent may, upon or at any time after the
occurrence of an Event of Default which has not been expressly waived or
excused, exercise all rights under the Uniform Commercial Code and any other
applicable law or in equity, and under all Loan Documents permitted to be
exercised after the occurrence of an Event of Default, including the following
rights and remedies (which list is given by way of example and is not intended
to be an exhaustive list of all such rights and remedies):
(i) The right to take possession, and notify all Lessees of the Agent's
security interest in the Collateral (at all times when the Collateral secures
the Obligations) and require payment under the Leases to be made directly to
Agent for the benefit of Lenders and Agent may, in its own name or in the name
of Borrower, collect, ▇▇▇ for and receive payment on all Leases, and settle,
compromise and adjust the same on any terms as may be satisfactory to Agent, in
its sole and absolute discretion for any reason or without reason and Agent may
do all of the foregoing with or without judicial process (including without
limitation notifying the United States Postal Authorities to redirect mail
addressed to any Borrower to an address designated by Agent); or
(ii) By its own means or with judicial assistance, subject to the rights of
the Lessees, enter any Borrower's premises or location of Collateral and take
possession of the Collateral, or render it unusable, or dispose of the
Collateral on such premises in compliance with subsection (e) below, without any
liability for rent, storage, utilities or other sums, and such Borrower shall
not resist or interfere with such action; or
(iii) Require any Borrower at such Borrower's expense, subject to the
rights of the Lessees, to assemble all or any part of the Collateral and make it
available to Agent at any place designated by Agent; or
(iv) The right to reduce or modify the Maximum Credit Limit, Borrowing Base
or any portion thereof or the advance rates or to modify the terms and
conditions upon which Agent, on behalf of Lenders, may be willing to consider
making Advances under the Credit Facility or to take additional reserves in the
Borrowing Base for any reason; or
(d) Borrowers each hereby agree that a notice received by it at least ten
(10) days before the time of any intended public sale or of the time after which
any private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any Collateral which threatens to speedily decline in value
or which is sold on a recognized market may be sold immediately by Agent without
prior notice to any Borrower. Each Borrower covenants and agrees not to
interfere with or impose any obstacle to Agent's exercise of its rights and
remedies with respect to the Collateral, after the occurrence of an Event of
Default hereunder.
8.4 NATURE OF REMEDIES. All rights and remedies granted Agent or Lenders
hereunder and under the Loan Documents, or otherwise available at law or in
equity, shall be deemed concurrent and cumulative, and not alternative remedies,
and Agent may proceed with any number of remedies at the same time until all
Obligations are satisfied in full. The exercise of any one right or remedy shall
not be deemed a waiver or release of any other right or remedy, and Agent, upon
or at any time after the occurrence of an Event of Default, may proceed against
any Borrower, at any time, under any agreement, with any available remedy and in
any order.
8.5 SET-OFF. If any bank account of any Borrower with Agent, any Lender or
any participant is attached or otherwise liened or levied upon by any third
party, such Lender (and such participant) as agent for Lenders shall have and be
deemed to have, without notice to Borrowers or any of them, the immediate right
of set-off and may apply the funds or amount thus set-off against any of
Borrowers' Obligations hereunder.
SECTION 9. AGENT
As between the Agent, on one hand, and the Lenders, on the other hand, the
Agent and each of the Lenders, who are now or shall become parties to this
Agreement, agree as follows (with the consent and approval of Borrowers):
9.1 APPOINTMENT AND AUTHORIZATION. Each Lender, and each subsequent holder
of any of the Revolving Credit Notes or Term Notes by its acceptance thereof,
hereby irrevocably appoints and authorizes the Agent to take such action on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. Except as may be otherwise expressly provided herein,
Borrowers are hereby authorized by the Lenders to deal solely with the Agent in
all transactions which affect the Lenders under this Agreement and the Loan
Documents. The rights, privileges and remedies accorded to the Agent hereunder
shall be exercised by the Agent on behalf of all of the Lenders.
9.2 GENERAL IMMUNITY. Subject to the provisions of this Agreement, the
Agent will handle all transactions relating to the Loans and all other
Obligations, including, without limitation, all transactions with respect to
this Agreement, the Loan Documents and all related documents in accordance with
its usual banking practices. In performing its duties as Agent hereunder, the
Agent will take the same care as it takes in connection with loans in which it
alone is interested. However, neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them hereunder or in connection herewith except for its or
their own gross negligence or willful misconduct.
9.3 CONSULTATION WITH COUNSEL. The Agent may consult with legal counsel and
any other professional advisors or consultants deemed necessary or appropriate
and selected by Agent and shall not be liable for any action taken or suffered
in good faith by it in accordance with the advice of such counsel.
9.4 DOCUMENTS. The Agent shall not be under a duty to examine into or pass
upon the effectiveness, genuineness or validity of this Agreement or any of the
Revolving Credit Notes or Term Notes, or any other instrument or document
furnished pursuant hereto or in connection herewith, and the Agent shall be
entitled to assume that the same are valid, effective and genuine and what they
purport to be. In addition the Agent shall not be liable for failing to make any
inquiry concerning the accuracy, performance or observance of any of the terms,
provisions or conditions of such instrument or document.
9.5 RIGHTS AS A BANK. With respect to its applicable Pro Rata Percentage of
the Credit Facility, the Agent shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not the Agent,
and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. Subject to the
provisions of this Agreement, the Agent may accept deposits from, lend money to
and generally engage in any kind of banking or trust business with Borrowers and
their Affiliates as if it were not the Agent.
9.6 RESPONSIBILITY OF AGENT. It is expressly understood and agreed that the
obligations of the Agent hereunder are only those expressly set forth in this
Agreement and that the Agent shall be entitled to assume that no Event of
Default and no Unmatured Event of Default has occurred and is continuing, unless
the Agent has actual knowledge of such fact. Except to the extent Agent is
required by the Lenders pursuant to the express terms hereof to take a specific
action, the Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights which may be vested in it
by, or with respect to taking or refraining from taking any action or actions
that it may be able to take under or in respect of, this Agreement and the Loan
Documents. The Agent shall incur no liability under or in respect of this
Agreement and the Loan Documents by acting upon any notice, consent,
certificate, warranty or other paper or instrument believed by it to be genuine
or authentic or to be signed by the proper party or parties, or with respect to
anything that it may do or refrain from doing in the reasonable exercise of its
judgment, or that may seem to it to be necessary or desirable under the
circumstances. It is agreed among the Agent and the Lenders that the Agent shall
have no responsibility to carry out audits or otherwise examine the books and
records or properties of Borrowers, except as the Agent in its sole discretion
deems appropriate. The relationship between the Agent and each Lender is and
shall be that of agent and principal only and nothing herein shall be construed
to constitute the Agent a joint venturer with any Lender, a trustee or fiduciary
for any of the Lenders or for the holder of a participation therein nor impose
on the Agent duties and obligations other than those set forth herein.
9.7 COLLECTIONS AND DISBURSEMENTS.
(a) The Agent will have the right to collect and receive all payments of
the Obligations, together with all fees, charges and other amounts due under
this Agreement and the Loan Documents, and the Agent will remit to each Lender
according to applicable Pro Rata Percentage all such payments actually received
by Agent (subject to any required clearance procedures) on the same Business Day
of receipt thereof (but if such payments shall not have been received by the
Agent prior to 1:00 p.m. Eastern Time on such Business Day then, on the next
Business Day).
(b) On the Business Day for which notice is given Lenders by Agent with
respect to requested Advances (which notice shall state the date and amount of
such payment), each Lender shall remit to the Agent its Pro Rata Percentage of
the payment in respect to such Advance. The obligation of Lenders hereunder are
unconditional, not subject to set-off, and irrevocable and may not be terminated
at any time.
(c) If any such payment received by the Agent is rescinded, determined to
be unenforceable or invalid or is otherwise required to be returned for any
reason at any time, whether before or after termination of this Agreement and
the Loan Documents, each Lender will, upon written notice from the Agent,
promptly pay over to the Agent its Pro Rata Percentage of the amount so
rescinded, held unenforceable or invalid or required to be returned, together
with interest and other fees thereon if also required to be rescinded or
returned.
(d) All payments by the Agent and the Lenders to each other hereunder shall
be in immediately available funds. The Agent will at all times maintain proper
books of account and records reflecting the interest of each Lender in the
Credit Facility, in a manner customary to the Agent's keeping of such records,
which books and records shall be available for inspection by each Lender at
reasonable times during normal business hours, at such Lender's sole expense. In
the event that any Lender shall receive any payments in reduction of the
Obligations in an amount greater than its applicable Pro Rata Percentage in
respect of indebtedness to the Lenders evidenced hereby (including, without
limitation amounts obtained by reason of setoffs), such Lender shall hold such
excess in trust for Agent (on behalf of all other Lenders) and shall promptly
remit to the Agent such excess amount so that the amounts received by each
Lender hereunder shall at all times be in accordance with its applicable Pro
Rata Percentage. To the extent necessary for each Lender's actual percentage of
all outstanding Loans to equal its applicable Pro Rata Percentage, the Lender
having a greater share of any payment(s) than its applicable Pro Rata Percentage
shall acquire a participation in the applicable outstanding balances of the Pro
Rata Shares of the other Lenders as determined by Agent.
9.8 INDEMNIFICATION. The Lenders hereby each indemnify the Agent ratably
according to their respective Pro Rata 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 that may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by the Agent under or related to this Agreement or the other Loan
Documents or the Loans, 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 solely from the
Agent's gross negligence or willful misconduct. Agent shall have the right to
deduct, from any amounts to be paid by Agent to any Lender hereunder, any
amounts owing to Agent by such Lender by virtue of this paragraph.
9.9 EXPENSES.
(a) All out-of-pocket costs and out-of-pocket expenses incurred by Agent
and not reimbursed on demand by Borrowers, in connection with the creation,
amendment, administration, termination and enforcement of the Loans (including,
without limitation, audit expenses, counsel fees and expenditures to protect,
preserve and defend Agent's and each Lender's rights and interest under the Loan
Documents) shall be shared and paid on demand by Lenders pro rata based on their
applicable Pro Rata Percentage.
(b) Agent may deduct from payments or distributions to be made to Lenders
such funds as may be necessary to pay or reimburse Agent for such costs or
expenses.
9.10 NO RELIANCE. By execution of or joining in this Agreement, each Lender
acknowledges that it has entered into this Agreement and the Loan Documents
solely upon its own independent investigation and is not relying upon any
information supplied by or any representations made by Agent. Each Lender shall
continue to make its own analysis and evaluation of Borrowers. Agent makes no
representation or warranty and assumes no responsibility with respect to the
financial condition or Property of any Borrower, any Lessee or any Collateral;
the accuracy, sufficiency or currency of any information concerning the
financial condition, prospects or results of operations of any Borrower; or for
sufficiency, authenticity, legal effect, validity or enforceability of the Loan
Documents. Agent assumes no responsibility or liability with respect to the
collectibility of the Obligations or the performance by Borrowers of any
obligation under the Loan Documents.
9.11 REPORTING. During the term of this Agreement, Agent will promptly
furnish each Lender such financial statements and reports as any Lender may
reasonably request. Agent will notify Lenders within a reasonable period of time
(not to exceed five (5) Business Days) after it receives actual knowledge of any
Event of Default under the Loan Documents.
9.12 REMOVAL OF AGENT. The Agent may resign at any time upon giving thirty
(30) days prior written notice thereof to Lenders and Borrowers. The Agent may
be removed as Agent hereunder upon the written direction of all Lenders
exclusive of the Agent upon the following: (i) wilful misconduct in the
performance of Agent's duties or responsibilities under this Agreement; or (ii)
if a receiver, trustee or conservator is appointed for Agent or any state or
federal regulatory authority assumes management or control of Agent or if, under
applicable law, the administrative or discretionary duties and responsibilities
of Agent hereunder become controlled by or subject to the approval of any state
or federal regulatory authority. Upon any resignation or permitted removal of
Agent, the Lenders shall have the right to appoint a successor Agent by majority
vote of the other Lenders (based upon the percentages of the total Pro Rata
Shares of the Lenders other than the Lender which is the Agent). Upon the
acceptance of the appointment as a successor Agent hereunder by such successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all rights, powers, obligations and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and obligations hereunder.
9.13 ACTION ON INSTRUCTIONS OF LENDERS. With respect to any provision of
this Agreement, or any issue arising thereunder, concerning which the Agent is
authorized to act or withhold action by direction of one or more Lenders, the
Agent shall in all cases be fully protected in so acting, or in so refraining
from acting, hereunder in accordance with written instructions signed by the
requisite Lenders. Such instructions and any action taken or failure to act
pursuant thereto shall be binding on all Lenders and on all holders of the
Revolving Credit Notes and Term Notes.
9.14 SEVERAL OBLIGATIONS. The obligation of each Lender is several, and
neither the Agent nor any other Lender shall be responsible for any obligation
or commitment hereunder of any other Lender.
9.15 CONSENT OF BANKS.
(a) Agent shall have the sole and exclusive right to service, administer
and monitor the Loans and the Loan Documents, including without limitation, the
right to exercise all rights, remedies, privileges and options under the Loan
Documents, including without limitation the making of Advances and the
determination as to the basis on which and extent to which Advances may be made.
(b) Notwithstanding anything to the contrary contained in subparagraph (a)
above, Agent shall not, without the prior written consent of all Lenders: (i)
extend or renew the Current Term or, any payment date under the Credit Facility,
(ii) decrease any interest rate on the Credit Facility, (iii) compromise or
settle all or a portion of the Obligations, (iv) release any obligor from the
Obligations (including without limitation, the Surety) except in connection with
termination of the Credit Facility and full payment and satisfaction of all
Obligations, (v) increase the Borrowing Base advance rate, (vi) modify Section
9.15(b) or (c) or Sections 3.8 or 3.9, or (vii) increase the Maximum Credit
Limit; provided, however, that Agent may increase the Maximum Credit Limit by
first offering the amount of any such increase to each of the Lenders in
accordance with their respective Pro Rata Percentage. To the extent any
Lender(s) may choose not to increase its/their respective Pro Rata Shares by the
amount attributable to its/their Pro Rata Percentage of such increase, such
amount will be offered to the other Lenders on such sharing basis as Agent may
reasonably establish. After each Lender choosing to increase its Pro Rata Share
has agreed to do so, and in conjunction with the modification of this Agreement
to reflect such increase executed by those Lenders sharing in the increase of
the Credit Facility, the Lenders' Pro Rata Percentages will be adjusted
accordingly and all Lenders (whether or not sharing in such increase) shall be
bound by such modification.
(c) Notwithstanding anything to the contrary contained in subparagraph (a)
above, Agent shall not, without the prior written consent of the Majority
Lenders: (i) enter into any written amendment to any of the Loan Documents; (ii)
waive any Borrower's compliance with the terms and conditions of the Loan
Documents or any Event of Default hereunder or thereunder; (iii) consent to any
Borrowers taking any actions which, if taken, would constitute an Event of
Default under this Agreement or under any of the Loan Documents; or (iv) take
any action to release Collateral in conjunction with Section 3.8 if any of the
conditions enumerated therein are not strictly satisfied.
(d) After an acceleration of the Obligations, Agent shall have the sole and
exclusive right, with communication (to the extent reasonably practicable under
the circumstances) with all Lenders, to exercise or refrain from exercising any
and all rights, remedies, privileges and options under the Loan Documents and
available at law or in equity to protect and enforce the rights of the Lenders
and collect the Obligations, including, without limitation, instituting and
pursuing all legal actions against any Borrower or to collect the Obligations,
or defending any and all actions brought by any Borrower or other Person; or
incurring Expenses or otherwise making expenditures to protect the Loans, the
Collateral or Lenders' rights or remedies.
(e) To the extent Agent is required to obtain or otherwise elects to seek
the consent of Lenders to an action Agent desires to take (except with respect
to renewal of the Credit Facility), if any Lender fails to notify Agent, in
writing, of its consent or dissent to any request of Agent hereunder within ten
(10) Business Days of such Lender's receipt of such request, such Lender shall
be deemed to have given its consent thereto.
(f) Notwithstanding any other provision of this Section 9.15 and without
impairing Agent's discretionary rights under Section 8, to the extent that there
occurs any redetermination of which Collateral comprises a portion of the
Borrowing Base which redetermination results in the creation of an Overadvance,
Agent shall, in its sole discretion, without right of disapproval by Lenders, be
entitled to permit Borrowers a period not to exceed thirty (30) days to repay or
remove such Overadvance. During such thirty (30) day period, the amount of Loans
constituting such Overadvance shall be excluded in the determination of whether
availability exists within the Borrowing Base for future Advances.
(g) No provision in Section 9 of this Agreement may be amended without
Agent's prior written consent.
9.16 PARTICIPATIONS AND ASSIGNMENTS. Borrowers hereby acknowledge and agree
that a Lender may at any time:
(a) grant participations in all or any percent of its Pro Rata Percentage
and Pro Rata Share or of its right, title and interest therein or in or to this
Agreement (collectively, "Participations") to any other lending office of such
Lender or to any other bank, lending institution or other entity which the
granting Lender reasonably determines has the requisite sophistication to
evaluate the merits and risks of investments in Participations ("Participants");
provided, however, that: (i) all amounts payable by the Borrowers to each Lender
hereunder shall be determined as if such Lender had not granted such
Participation; and (ii) any agreement pursuant to which any Lender may grant a
Participation: (A) shall provide that such Lender shall retain the sole right
and responsibility to enforce the Obligations of the Borrowers hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provisions of this Agreement; (B) such participation agreement
may provide that such Lender will not agree to any modification, amendment or
waiver of this Agreement without the consent of the Participant if such
amendment, modification or waiver would reduce the principal of or rate of
interest on the Loans, increase the amount of the Maximum Credit Limit, postpone
the date fixed for any scheduled payment of principal of or interest on the
Loans or release Collateral for the Loans, subject to Section 9.15 hereof; and
(C) shall not relieve such Lender from its obligations, which shall remain
absolute, to make Advances hereunder; and
(b) assign (i) all or any percent of its Pro Rata Percentage and Pro Rata
Share or any right, title and interest therein or in and to this Agreement to a
Lender or any affiliate of a Lender; or (ii) all or any of its Pro Rata
Percentage or Pro Rata Share or any right, title and interest therein or in and
to this Agreement to a third party, with the prior written consent of the
Borrowers (absent the existence of an Event of Default or Unmatured Event of
Default) and the Agent, which consents shall not be unreasonably withheld;
provided that unless there exists an Event of Default, assignments may not be
made in amounts less than $5,000,000, and in the case of (i) or (ii) together
with the payment to the Agent of a $2,500 transfer fee. All Participations and
assignments hereunder shall be of the Pro Rata Percentage or Pro Rata Share of
the Lender making the assignment or granting the Participation.
9.17 CO-AGENT. The parties hereto covenant and agree that PNC Bank,
National Association shall be a co-agent ("Co-Agent") who shall have no rights,
duties or responsibilities, except for those received, undertaken or incurred by
PNC Bank, National Association in its capacity as a Lender. No duty,
responsibility, right or option granted to the Agent herein is delegated or
transferred, in whole or in part, to the Co-Agent and no compensation payable to
the Agent shall be shared with, or paid to, the Co-Agent. Co-Agent shall not be
entitled to any fees or reimbursement of Expenses except as PNC Bank, National
Association shall otherwise be entitled in its capacity as a Lender. Each
disclaimer, exculpation provision and indemnity contained in Section 9 of the
Agreement provided for the benefit of the Agent shall likewise be deemed given
to and provided for the Co-Agent. Notwithstanding anything to the contrary
contained in this Agreement, no amendment to this Section 9.17 shall be
effective without the written consent of Co-Agent.
SECTION 10. MISCELLANEOUS
10.1 GOVERNING LAW. THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND
DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PROVISIONS OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN
ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL
CONTINUE IN FULL FORCE AND EFFECT.
10.2 INTEGRATED AGREEMENT. The Revolving Credit Notes, the Term Notes, the
other Loan Documents, all related agreements, and this Agreement shall be
construed as integrated and complementary of each other, and as augmenting and
not restricting Lenders' and Agent's rights and remedies. If, after applying the
foregoing, an inconsistency still exists, the provisions of this Agreement shall
constitute an amendment thereto and shall control.
10.3 WAIVER.
(a) No omission or delay by Agent or Lenders in exercising any right or
power under this Agreement or any related agreements and documents will impair
such right or power or be construed to be a waiver of any default, or Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right or power will not preclude other or further exercise thereof or the
exercise of any other right, and as to Borrowers no waiver will be valid unless
in writing and signed by Agent and then only to the extent specified.
(b) Each Borrower releases and shall indemnify, defend and hold harmless
Agent and Lenders, and their respective officers, employees and agents, of and
from any claims, demands, liabilities, obligations, judgments, injuries, losses,
damages and costs and expenses (including, without limitation, reasonable legal
fees) resulting from (i) acts or conduct of any Borrower or all Borrowers under,
pursuant or related to this Agreement and the other Loan Documents, (ii)
Borrowers' breach or violation of any representation, warranty, covenant or
undertaking contained in this Agreement or the other Loan Documents, and (iii)
Borrowers' failure to comply with any or all laws, statutes, ordinances,
governmental rules, regulations or standards, whether federal, state or local,
or court or administrative orders or decrees, (including without limitation
environmental laws, etc.) and all costs, expenses, fines, penalties or other
damages resulting therefrom, unless resulting from acts or conduct of Lenders
constituting wilful misconduct or gross negligence.
10.4 TIME. Whenever any Borrower shall be required to make any payment, or
perform any act, on a day which is not a Business Day, such payment may be made,
or such act may be performed, on the next succeeding Business Day. Time is of
the essence in Borrowers' performance under all provisions of this Agreement and
all related agreements and documents.
10.5 EXPENSES OF AGENT. At Closing and from time to time thereafter,
Borrowers will pay all reasonably incurred expenses of Agent (and of each Lender
following the occurrence of an Event of Default) on demand (including, without
limitation, search costs, appraisal fees, environmental fees and the fees and
expenses of legal counsel for Agent) relating to this Agreement, and all related
agreements and documents, including, without limitation, expenses incurred in
the negotiation, preparation, closing, administration and enforcement of this
Agreement and the other Loan Documents, the enforcement, protection and defense
of the rights of Agent and Lenders in and to the Loans and Collateral or
otherwise hereunder, and any reasonable expenses relating to extensions,
amendments, waivers or consents pursuant to the provisions hereof, or any
related agreements and documents or relating to agreements with other creditors,
or termination of this Agreement (collectively, the "Expenses").
10.6 BROKERAGE. Except as otherwise provided herein, this transaction was
brought about and entered into by Agent, Lenders and Borrowers acting as
principals and without any brokers, agents or finders being the effective
procuring cause hereof. Each Borrower represents that it has not committed Agent
or any Lender to the payment of any brokerage fee, commission or charge in
connection with this transaction.
10.7 NOTICES.
(a) Any notices or consents required or permitted by this Agreement shall
be in writing and shall be deemed given if delivered in person or if sent by
telecopy or by nationally recognized overnight courier, or via first class,
Certified or Registered mail, postage prepaid, as follows, unless such address
is changed by written notice hereunder:
If to Agent to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇.▇. ▇-▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
Telecopy No.: 215/786-7704
With copies to: Blank Rome Comisky & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, Esquire
Telecopy No.: 215/569-5555
If to Borrowers to: c/o Interpool, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. VP
Telecopy No.: 609/452-8211
With copies to: Interpool, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: 212/687-8403
If to Lenders:
to the addresses set forth on Schedule B
(b) Any notice sent by Agent, any Lender or Borrowers by any of the above
methods shall be deemed to be given when so received.
(c) Agent shall be fully entitled to rely upon any facsimile transmission
or other writing purported to be sent by any Authorized Officer (whether
requesting an Advance or otherwise) as being genuine and authorized.
10.8 WAIVER OF SUBROGATION. (a) Interpool hereby irrevocably waives any and
all rights it may have at any time (whether arising directly or indirectly, by
operation of law or contract) to assert any claim against any of Trac Lease or
Limited or Interpool Finance on account of payments made under this Agreement,
the Surety Agreement or otherwise, including without limitation, any and all
rights of subrogation, reimbursement, exoneration, contribution or indemnity,
until such time as all of the Obligations are repaid in full.
(b) Interpool Finance hereby irrevocably waives any and all rights it may
have at any time (whether arising directly or indirectly by operation of law or
contract) to assert any claim against Limited on account of payments made under
this Agreement, the Surety Agreement or otherwise, including without limitation,
any and all rights of subrogation, reimbursement, exoneration, contribution or
indemnity, until such time as all of the Obligations are repaid in full.
(c) Limited hereby irrevocably waives any and all rights it may have at any
time (whether arising directly or indirectly by operation of law or contract) to
assert any claim against Interpool Finance on account of payments made under
this Agreement, the Surety Agreement or otherwise, including without limitation,
any and all rights of subrogation, reimbursement, exoneration, contribution or
indemnity, until such time as all of the Obligations are repaid in full.
10.9 HEADINGS. The headings of any paragraph or Section of this Agreement
are for convenience only and shall not be used to interpret any provision of
this Agreement.
10.10 SURVIVAL. All warranties, representations, and covenants made by
Borrowers herein, or in any agreement referred to herein or on any certificate,
document or other instrument delivered by it or on its behalf under this
Agreement, shall be considered to have been relied upon by Agent and Lenders,
and shall survive the delivery to Lenders of the Revolving Credit Notes,
regardless of any investigation made by Lenders or on their behalf. All
statements in any such certificate or other instrument prepared and/or delivered
for the benefit of Agent and any and all Lenders shall constitute warranties and
representations by Borrowers hereunder. Except as otherwise expressly provided
herein, all covenants made by Borrowers hereunder or under any other Loan
Documents shall be deemed continuing until all Obligations are satisfied in
full.
10.11 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties. No
Borrower may transfer, assign or delegate any of its duties or obligations
hereunder.
10.12 DUPLICATE ORIGINALS. Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original but
all of which together shall constitute one and the same instrument. This
Agreement may be executed in counterparts, all of which counterparts taken
together shall constitute one completed fully executed document.
10.13 MODIFICATION. No modification hereof or any agreement referred to
herein shall be binding or enforceable unless in writing and signed by
Borrowers, Agent and the Lenders except as Section 9 hereof.
10.14 SIGNATORIES. Each individual signatory hereto represents and warrants
that he is duly authorized to execute this Agreement on behalf of his principal
and that he executes the Agreement in such capacity and not as a party.
10.15 THIRD PARTIES. No rights are intended to be created hereunder, or
under any related agreements or documents for the benefit of any third party
donee, creditor or incidental beneficiary of any Borrower. Nothing contained in
this Agreement shall be construed as a delegation to Agent or any Lender of
Borrowers' duty of performance, including, without limitation, Borrowers' duties
under any account or contract with any other Person.
10.16 DISCHARGE OF TAXES, BORROWERS' OBLIGATIONS, ETC. Agent, in its sole
discretion, shall have the right at any time, and from time to time, with prior
notice to a Borrower if such Borrower fails to do so five (5) Business Days
after receipt of a request in writing to do so by Agent, to: (a) pay or perform
such Borrower's obligations hereunder, and (b) discharge taxes or Liens, at any
time levied or placed on any of such Borrower's Property in violation of this
Agreement unless such Borrower is in good faith with due diligence by
appropriate proceedings contesting such taxes or Liens and maintaining proper
reserves therefor in accordance with GAAP. Any such Expenses and advances shall
be added to the Revolving Credit and bear interest at the same rate applied to
the Revolving Credit, until reimbursed to Agent. Such payments and advances made
by Agent shall not be construed as a waiver by Agent or Lenders of an Event of
Default under this Agreement. In the event that any lien, assessment or tax
liability against any Borrower shall arise in favor of any taxing authority,
whether or not notice thereof shall be filed or recorded as may be required by
law, Agent shall have the right (but shall not be obligated, nor shall Agent or
any Lender hereby assume the duty) to pay any such lien, assessment or tax
liability by virtue of which such charge shall have arisen; provided, however,
that Agent shall not pay any such tax, assessment or lien if the amount,
applicability or validity thereof is being contested in good faith and by
appropriate proceedings by Borrowers. In order to pay any such lien, assessment
or tax liability, Agent shall not be obliged to wait until said lien, assessment
or tax liability is filed before taking such action as hereinabove set forth.
Any sum or sums which Agent (shared ratably by Lenders) shall have paid for the
discharge of any such lien shall be added to the Revolving Credit and shall be
paid by Borrowers to Agent with interest thereon, upon demand, and Agent shall
be subrogated to all rights of such taxing authority against Borrowers.
10.17 MOST FAVORED LENDERS. Borrowers agree to promptly notify Agent in
writing if any agreement for borrowed money to which Interpool is a party or
under which it is otherwise obligated, contains or is amended to contain,
consolidated financial covenants more restrictive than those contained herein,
then such financial covenant(s) shall be deemed to be incorporated into this
Agreement as if set forth more fully herein for so long as such agreement
remains in effect or contains such covenant(s) and a breach of such covenant(s)
under such agreement shall constitute an Event of Default hereunder.
10.18 CONSENT TO JURISDICTION. Each Borrower and each Lender hereby
irrevocably consents to the jurisdiction of the Courts of Common Pleas of
Philadelphia, Commonwealth of Pennsylvania or the United States District Court
for the Eastern District of Pennsylvania in any and all actions and proceedings
whether arising hereunder or under any other agreement or undertaking and
irrevocably agree to service of process by certified mail, return receipt
requested to the address of the appropriate party set forth herein.
10.19 WAIVER OF JURY TRIAL. EACH BORROWER, LENDER AND AGENT HEREBY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION
COMMENCED BY OR AGAINST AGENT OR ANY LENDER OR LENDERS WITH RESPECT TO RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS.
10.20 INFORMATION TO PARTICIPANT. Agent and each Lender may divulge to any
participant, co-lender or assignee or prospective participant, co-lender or
assignee (so long as any such entity is not a direct competitor of Interpool),
all information, and furnish to such Person copies of any reports, financial
statements, certificates, and documents obtained under any provision of this
Agreement, or related agreements and documents; provided, however that any
potential participant, co-lender or assignee agrees to hold in confidence all
confidential or proprietary information provided to them by Borrowers, Agent or
such Lender except (a) to the extent that the production of such information is
required pursuant to any statute, ordinance, regulation, rule or order or any
subpoena or any governmental inquiry or by reason of any bank regulation in
connection with any bank examination, and (b) such potential participant,
co-lender or assignee shall not be prohibited from disclosing any such
information to any of their agents, officers, employees, attorneys, accountants
or consultants who shall be informed of this provision.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
the day and year first above written.
INTERPOOL, INC.
By: _____________________________________
Title:
Attest: _____________________________________
(Corporate Seal)
INTERPOOL FINANCE CORP.
By: _____________________________________
Title:
Attest: _____________________________________
(Corporate Seal)
TRAC LEASE, INC.
By: _____________________________________
Title:
Attest: _____________________________________
(Corporate Seal)
INTERPOOL LIMITED
By: _____________________________________
Title:
Attest: _____________________________________
(Corporate Seal)
CORESTATES BANK, N.A., as Agent
By: _____________________________________
Title:
CORESTATES BANK, N.A., as Lender
By: _____________________________________
Title:
PNC BANK, NATIONAL ASSOCIATION, as
Co-Agent and Lender
By: _____________________________________
Title:
THE SUMITOMO BANK, LIMITED, as Lender
By: _____________________________________
Title:
SUMMIT BANK, as Lender
By: _____________________________________
Title:
ABN AMRO BANK N.V. NEW YORK BRANCH, as Lender
By: _____________________________________
Title:
UNION BANK OF CALIFORNIA, N.A., as Lender
By: _____________________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH, as Lender
By: _____________________________________
Title:
THE BANK OF NOVA SCOTIA, as Lender
By: _____________________________________
Title:
SCHEDULE A
REVOLVING CREDIT PRO REVOLVING CREDIT PRO
LENDERS RATA SHARE RATA PERCENTAGE
CoreStates Bank, N.A. $55,000,000.00 27.5
The Sumitomo Bank, Limited $20,000,000.00 10.0
PNC Bank, National Association $35,000,000.00 17.5
Summit Bank $25,000,000.00 12.5
ABN Amro Bank N.V. New York Branch $15,000,000.00 7.5
Union Bank of California, N.A. $20,000,000.00 10.0
Credit Lyonnais New York Branch $20,000,000.00 10.0
The Bank of Nova Scotia $10,000,000.00 5.0
---------------- ---
$200,000,000.00 100%
SCHEDULE ▇
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,▇.▇.
FC 1-8-11-24
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Sumitomo Bank, Ltd.
LENDING OFFICE:
The Sumitomo Bank,Ltd. Chicago Branch
Administration Center
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Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
ADDRESS FOR NOTICE PURPOSES
The Sumitomo Bank, Ltd.
U.S. Commercial Banking Division
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Attention: ▇▇▇▇▇ ▇▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
PNC Bank, National Association
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Summit Bank
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Attention: Arty ▇. ▇▇▇▇▇▇▇▇, ▇▇. Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
ABN Amro Bank N.V. New York Branch
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and
Director of Surface Transportation
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Union Bank of California, N.A.
Financial Services Industries Division
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Credit Lyonnais New York Branch
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Credit Lyonnais New York Branch
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Attention: ▇▇▇▇▇ ▇▇▇▇▇, Assistant Treasurer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Bank of Nova Scotia
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Attention: ▇▇▇▇▇ ▇▇▇▇▇, Senior Relationship Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE C
INTERPOOL, INC.
SCHEDULE OF CONSOLIDATED SUBSIDIARIES
INTERPOOL LIMITED
TRAC LEASE, INC.
INTERPOOL SERVICES, INC.
MILITARY TRANSPORT, INC.
MICROTECH LEASING CORPORATION
▇▇ ▇▇ CORP.
TRANSACT CORPORATION
INTERPOOL FINANCE, INC.
CONTAINERBASE, INC.
RAILPOOL, INC.
INTERPOOL N.V.
INTERPOOL (HONG KONG) LIMITED
INTERPOOL B.V.
INTERPOOL BENELUX B.V.
INTERPOOL PTE LTD
CTC EQUIPMENT AG
INTERPOOL (U.K.) LIMITED
C.T.C. CONTAINER TRADING (U.K.) LIMITED
INTERPOOL CONTAINERS N.V.
INTERPOOL CONTAINERS INC.
INTERPOOL FINANCE CORP.
EXHIBIT 2.1(b)
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$55,000,000.00 Philadelphia, PA
___________, 1997
FOR VALUE RECEIVED and intending to be legally bound, the undersigned,
Interpool Finance Corp. ("Borrower"), promises to pay, in lawful money of the
United States, to the order of CoreStates Bank, N.A. ("Lender"), at the offices
of CoreStates Bank, N.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ (or at such other address as Lender may designate to Borrower as permitted
under the Loan Agreement), the maximum aggregate principal sum of Fifty-Five
Million ($55,000,000.oo) Dollars or such lesser sum which represents the
outstanding balance of Lender's Pro Rata Percentage of the aggregate outstanding
principal balance of all Revolving Credit Loans advanced to the Borrower
pursuant to the provisions of that certain Third Amended and Restated Senior
Loan and Security Agreement dated as of the date hereof, among Borrower, Trac
Lease, Inc., Interpool, Inc., Interpool Limited, CoreStates Bank, N.A., as Agent
("Agent") and Lender and the other financial institutions named therein (as it
may hereafter be further supplemented, amended, extended or replaced from time
to time, the "Loan Agreement"). The outstanding principal balance hereunder
shall be payable pursuant to the terms of the Loan Agreement. The actual amount
due and owing from time to time hereunder shall be evidenced by Agent's records
of receipts and disbursements with respect to the Revolving Credit Loans, which
shall be conclusive evidence of such amount, absent manifest error. All terms
not otherwise defined herein shall have the meaning ascribed to them in the Loan
Agreement.
Borrower further agrees to pay interest on the outstanding principal
balance hereunder from time to time at the per annum rates set forth in Sections
2.4 and, as applicable, 2.5(c) and (d) of the Loan Agreement. Interest shall be
calculated as set forth in Section 2.5(a) of the Loan Agreement, and shall be
due and payable on the dates and otherwise in accordance with the terms of the
Loan Agreement. In no event shall the amount of interest paid or agreed to be
paid to Lender hereunder exceed the highest lawful rate permissible under any
law which a court of competent jurisdiction may deem applicable hereto. In such
event, the interest rate shall automatically be reduced to the maximum rate
permitted by such law and Lender (or Agent on Lender's behalf) may set off any
excess received against other Obligations which are then due, and any additional
amounts shall be refunded to Borrower.
This Amended and Restated Revolving Credit Note ("Note") is one of those
certain Revolving Credit Notes referred to in the Loan Agreement and other Loan
Documents and consolidates, amends and restates, but does not extinguish the
obligations evidenced by, that certain Amended and Restated Revolving Credit
Note from Borrower to Lender in the principal amount of $45,000,000 dated
September 6, 1996 and that certain Amended and Restated Revolving Credit Note
from Borrower to Meridian Bank, New Jersey (predecessor by merger to Lender) in
the principal amount of $10,000,000, dated as of September 6, '-996.
This Note shall evidence Borrower's unconditional obligations to repay the
outstanding balance of Lender's Pro Rata Percentage of the aggregate outstanding
principal balance of all Revolving Credit Loans made to Borrower, with interest
thereon and Expenses in connection therewith. if Borrower fails to make any
payment required hereunder or if an Event of Default occurs under the Loan
Agreement, Agent shall thereupon have the option at any time and from time to
time, and the SuperMajority Lenders may, pursuant to the terms of the Loan
Agreement, direct Agent, to declare the unpaid principal balance of this Note
along with accrued and unpaid interest and Expenses to be immediately due and
payable and to exercise all rights and remedies set forth herein, and in the
other Loan Documents, as well as all rights and remedies otherwise available to
Agent at law or in equity, to collect the unpaid. indebtedness hereunder and
thereunder. This Note is secured by the Collateral described in the Loan
Agreement.
This Note may be prepaid only in accordance with the terms and conditions
of the Loan Agreement.
Borrower hereby waives presentment for payment, protest, demand, notice of
nonpayment or dishonor and all other notices in connection with the delivery,
acceptance, performance or enforcement of this Note. Any failure or delay of
Agent and/or Lender to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any other time or
times. The waiver by Agent and/or Lender of a breach or default of any provision
of this Note shall not operate or be construed as a waiver of any subsequent
breach or default thereof. Borrower agrees to reimburse Agent and Lender (to the
extent applicable) for all Expenses, including, without limitation, attorneys,
fees, reasonably incurred by Agent and Lender (to the extent applicable) to
enforce the Provisions of this Note, to protect, preserve and defend Agent's or
Lender's rights under the Loan Documents, and collect Borrower's Obligations
hereunder as described in the Loan Agreement.
Notwithstanding the entry of any judgment under this Note, the unpaid
principal balance under this Note shall continue to bear interest at the
applicable rate set forth in the Loan Agreement.
This Note shall be construed and governed by the laws of the Commonwealth
of Pennsylvania, without regard to its otherwise applicable principles of
conflict of laws. The provisions of this Note are severable and the invalidity
or unenforceability of any provision shall not alter or impair the remaining
provisions of this Note. Jury trial in waived by Borrower, Lender and Agent in
connection with any controversy or proceeding involving the rights of the
parties to this Note, whether sounding in contract, tort or otherwise.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Borrower has
executed these presents the day and year first above written.
INTERPOOL FINANCE CORP.
By: __________________________
Attest: ______________________
Exhibit 2.1(c)
TERM NOTE
$_______________ Philadelphia, PA
___________,199_
FOR VALUE RECEIVED and intending to be legally bound, the undersigned,
("Borrower"), a corporation, with a place of business at promises to pay, in
lawful money of the United States, to the order of ("Lender"), at the offices of
(or at such other address as Lender may designate to Borrower as permitted under
the Loan Agreement), the sum of __________________ ($_____________) Dollars in
______________ consecutive monthly installments of principal of
__________________ each plus accrued interest, commencing on the day of the
month immediately following the date of this Note and on the _______________day
of each month thereafter with a final payment of the entire outstanding
principal balance of the Term Loan and all accrued but unpaid interest, fees,
costs and expenses due on the _____ day of the ______ month after the date of
this Note. The actual amount due and owing from time to time hereunder shall be
evidenced by the Agent's records of disbursements and receipts with respect to
the Term Loan which shall be conclusive evidence of such amount, absent manifest
error.
This Term Note is one of those Term Notes referred to in the Third Amended
and Restated Senior Loan and Security Agreement dated _________ among Borrower,
___________________________ CoreStates Bank, N.A., as Agent ("Agent") and Lender
and the other financial institutions named therein (as may hereafter be
supplemented, amended, extended or replaced from time to time, the "Loan
Agreement"). All capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Loan Agreement.
Borrower further agrees to pay interest on the outstanding principal
balance hereunder from time to time at the per annum rates set forth in Section
2.4 and, as applicable, 2.5(c) and (d) of the Loan Agreement. Interest shall be
calculated as set forth in Section 2.5(a) of the Loan Agreement, and shall be
due and payable on the dates and otherwise in accordance with the terms of the
Loan Agreement. In the event Borrower has selected a fixed rate of interest in
accordance with Section 2.4(c) of the Loan Agreement, interest shall accrue on
the unpaid principal amount outstanding hereunder from time to time at the per
annum rate equal to ___ %. In no event shall the amount of interest paid or
agreed to be paid to Lender hereunder exceed the highest lawful rate permissible
under any law which a court of competent jurisdiction may deem applicable
hereto. In such event, the interest rate shall automatically be reduced to the
maximum rate permitted by such law and Lender (or Agent on Lender's behalf) may
set off any excess received against other Obligations which are then due, any
additional amounts shall be refunded to Borrower.
This Term Note ("Note") shall evidence Borrower's unconditional obligations
to repay the outstanding balance hereof, with interest hereon and Expenses in
connection herewith. If Borrower fails to make any payment required hereunder or
if an Event of Default occurs under the Loan Agreement, Agent shall thereupon
have the option at any time and from time to time, and the Super Majority
Lenders may, pursuant to the terms of the Loan Agreement, direct Agent, to
declare the unpaid principal balance of this Note along with accrued and unpaid
interest and Expenses to be immediately due and payable and to exercise all
rights and remedies set forth herein, and in the other Loan Documents, as well
as all rights * and remedies otherwise available to Agent at law or in equity,
to collect the unpaid indebtedness hereunder and thereunder. This Note is
secured by the Collateral described in the Loan Agreement.
This Note may be prepaid only in accordance with the terms and conditions
of the Loan Agreement.
Borrower hereby waives presentment for payment, protest, demand, notice of
nonpayment or dishonor and all other notices in connection with the delivery,
acceptance, performance or enforcement of this Note. Any failure or delay of
Agent and/or Lender to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any other time or
times. The waiver by Agent and/or Lender of a breach or default of any provision
of this Note shall not, operate or be construed as a waiver of any subsequent
breach or default thereof. Borrower agrees to reimburse Agent and Lender (to the
extent applicable) for all Expenses, including, without limitation, attorneys'
fees, reasonably incurred by Agent and Lender (to the extent applicable) to
enforce the provisions of this Note, to protect, preserve and defend Agent's or
Lender's rights under the Loan Documents, and collect Borrower's obligations
hereunder, as described in the Loan Agreement.
Notwithstanding the entry of any judgment under this Note, the unpaid
principal balance under this Note shall continue to bear interest at the
applicable rate set forth in the Loan Agreement.
This Note shall be construed and governed by the laws of the commonwealth
of Pennsylvania, without regard to its otherwise applicable principles of
conflict of laws. The provisions of this Note are severable and the invalidity
or unenforceability of any provision shall not alter or impair the remaining
provisions of this Note. Jury trial is waived by Borrower, Lender and Agent in
connection with any controversy or proceeding involving the rights of the
parties to this Note, whether sounding in contract, tort or otherwise.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Borrower has
executed these presents the day and year first above written.
Borrower:
________________________________
By:_____________________________
Attest: __________________________
Exhibit 2.3(a)(i)(C)(1)
INTERPOOL, INC & SUBSMIARIES
$58,000,000 SENIOR SECURED NOTES DUE 2003
EQUIPMENT UTILIZATION REPORT AS OF.- SEPTEMBER 30,1994
Units Utilization %
Containers......................... 102,153 94.6
Chassis ........................... 47,982 91.3
Railcars........................... 537 96.5
Exhibit 2.3(a)(i)(C)(2)
INTERPOOL, INC
RATIO OF CASH FLOW AVAILABLE FOR DEBT AND CAPITAL LEASE
OBLIGATIONS DUE WITHIN ONE YEAR
SEPTEMBER 30,1994
(ADD) (LESS)
1ST QTRS 1ST QTRS LATEST
1993 1994 1993 4 QTRS
CASH FLOW:
NET EARNINGS 20,004 17,316 14,055 23,265
DEFERRED TAXES 500 0 0 500
DEPRECIATION 14,838 12,971 11,139 16,670
COLL. ON DFL 14,169 17,924 10,642 21,451
LESS INCOME ON DFL (6,557) (6.689) (5,004) (8,242)
------- ------- ------ -------
42,954 41,522 30,832 53,644
DEBT AND CAPITAL LEASE OBLIGATIONS DUE WITHIN ONE YEAR:
DEBT DUE WITHIN ONE YEAR 51,598 79,390
PLUS 20% OF FACILITY. OUTSTANDING 7,000
LESS CASH & MARKET SEC - (124,574) (81,943)
PLUS BASE CASH 5,000 5,000
--------- ---------
(67,976) 9,447
RATIO NM 5.68
SECTION 2.3 (a) (i) C. (2) RATIO OF NOT LESS THAN 1.1.
EXHIBIT 2.3(b)
ASSIGNMENT AGREEMENT
__________________________________(hereinafter "Assignor"), does hereby
grant and assign to CORESTATES BANK N.A., as Agent for the benefit of itself and
the Lenders listed in that certain Third Amended and Restated Senior Loan and
Security Agreement dated as of December 19, 1997 (as supplemented, amended,
extended or replaced from time to time, the "Loan Agreement") (hereinafter
"Assignee") , its successors and assigns a security interest in all of the
right, title and interest of Assignor in and to (i) the Leased Property listed
on Schedule A attached hereto and made a part hereof, all corresponding Leases
as they relate to such Leased Property and Books and Records which are the
subject ,matter of or related to such Leases and/or Leased Property, and all
proceeds thereof; and (ii) all of the interest of Assignor as loss payee or
beneficiary under any insurance policies issued in connection with the Leased
Property and each such Lease as it relates to the Leased Property which is the
subject matter thereof. All defined terms not otherwise defined herein shall
have the meaning ascribed thereto in the Loan Agreement.
Assignee shall have the right to ▇▇▇ for, collect, and receive all payments
due or to become due under the Leases as they relate to the Leased Property and
to exercise all rights and remedies all in accordance with the terms of the Loan
Agreement, with power to enforce in its own name or in Assignor's name any and
all rights given to Assignor under the Leases.
This Assignment is hereby given as security for any and all obligations of
the Assignor to the Agent and/or Lenders.
Assignor agrees that neither Assignee nor any Lender shall assume any of
Assignor's obligations or liabilities to the lessee/renter under any Leases.
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed by its duly authorized officer this day of _________________________,
19___.
Assignor:
___________________________
Attest: ____________________ By: _______________________
Title: ____________________
EXHIBIT 5.1
Borrowers' States of Qualifications
INTERPOOL. INC. (Delaware corporation)
New York (under corporate name of Interpool Leasing Systems)
New Jersey
Illinois (d/b/a Railpool)
Oregon
INTERPOOL LIMITED (Barbados corporation)
New York
New Jersey
Florida
Georgia
Maine
Massachusetts
Maryland
TRAC LEASE INC. (Delaware corporation)
New York (under corporate name of Trac Chassis Co.)
New Jersey
Georgia
Oregon
INTERPOOL FINANCE CORP. (Cayman islands)
New York
New Jersey
EXHIBIT 5.2
Borrowers' Places of Business
INTERPOOL. INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
INTERPOOL LIMITED
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
West Indies
TRAC LEASE, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
INTERPOOL FINANCE CORP.
The Corporate Center
▇▇▇▇ ▇▇▇▇
Bay Street
St. ▇▇▇▇▇▇▇, Barbados
EXHIBIT 6.1.2
COMPLIANCE CERTIFICATE
___________________, 19__
CoreStates Bank, N.A., as Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,'Vice President
The undersigned, the Vice President of Interpool, Inc., Interpool Limited,
Trac Lease, Inc. and Interpool Finance Corp. (collectively "Borrowers"), gives
this certificate to CoreStates Bank, N.A. as Agent ("Agent") in accordance with
the requirements of Section 6.12 of that certain Third Amended and Restated
Senior Loan and Security Agreement dated December 19, 1997, among Borrowers,
Agent and the Lenders named therein ("Loan Agreement") . Capitalized terms used
in this Certificate, unless otherwise defined herein, shall have the meanings
ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements of income of
Borrowers for the [fiscal year] [quarterly period] ending _______________, 19__,
copies of which along with the calculations for each covenant, are attached
hereto, I hereby certify that:
(a) Funded Debt to Tangible Net Worth ratio is ________________
(b) Tangible Net Worth is $____________
(c) Fixed Charge Coverage Ratio is _________________
2. No Event of Default has occurred.
3. There has been no material adverse change since _______________ in the
operations or condition of Borrower (whether financial or otherwise).
4. All warranties and representations set forth in the Loan Agreement and
all related agreements, instruments and documents are true and correct as of the
date hereof.
Very truly yours,