[CONFORMED COPY WITH EXHIBITS
F, J AND K CONFORMED AS
EXECUTED]
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CREDIT AGREEMENT
among
SCOTSMAN HOLDINGS, INC.,
▇▇▇▇▇▇▇▇ SCOTSMAN, INC.,
VARIOUS FINANCIAL INSTITUTIONS,
BANKERS TRUST COMPANY,
as Issuing Bank,
BT COMMERCIAL CORPORATION,
as Administrative Agent and Co-Syndication Agent,
NATIONSBANK, N.A.,
as Co-Syndication Agent,
and
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Documentation Agent
Dated as of May 22, 1997
and
Amended and Restated as of September 1, 1998
$600,000,000
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THIS CREDIT AGREEMENT, dated as of May 22, 1997 and amended and
restated as of September 1, 1998, among Scotsman Holdings, Inc., a Delaware
corporation ("Holdings"), ▇▇▇▇▇▇▇▇ Scotsman, Inc., a Maryland corporation (the
"Borrower"), each of those financial institutions listed from time to time on
Schedule I hereto (each, a "Lender" and, collectively, the "Lenders"), BANKERS
TRUST COMPANY, as Issuing Bank, BT COMMERCIAL CORPORATION, acting as
Administrative Agent and Co-Syndication Agent, NATIONSBANK, N.A., acting as
Co-Syndication Agent, and ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., acting as
Documentation Agent (each such Agent acting in the manner and to the extent
described in Article 10 hereof). Capitalized terms used and not otherwise
defined herein have the respective meanings set forth in Section 1.1 hereof.
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Original Lenders (as
hereinafter defined), Bankers Trust Company, as Issuing Bank, and BT Commercial
Corporation, as Agent, are parties to a Credit Agreement, dated as of May 22,
1997 (as the same has been amended, modified or supplemented to, but not
including, the Restatement Effective Date, the "Original Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the
Original Credit Agreement in the form of this Credit Agreement to, inter alia,
permit the Acquisition (as hereinafter defined) and the financing therefor on
the terms and subject to the conditions provided herein and to make available to
the Borrower the respective credit facilities provided for herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1.
Definitions
1.1. General Definitions. As used herein, the following terms
shall have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):
Accounts shall mean, with respect to any Person, all present and
future accounts, contract rights and other rights to payment for goods sold or
leased (whether or not delivered) or for services rendered which are not
evidenced by an instrument, whether or not they have been earned by performance,
and any letter of credit, guarantee, security interest or other security issued
or granted to secure payment by an account debtor including, without limitation,
all rentals, lease payments and other monies earned and to be earned, due and to
become due under any Lease.
Acquired Business shall mean the business of Space Master
International, Inc. and its Subsidiaries to be acquired by the Borrower pursuant
to the Acquisition.
Acquisition shall mean the acquisition by the Borrower of 100% of
the issued and outstanding capital stock of Space Master International, Inc., a
Georgia corporation, upon the terms and conditions of the Acquisition Agreement.
Acquisition Agreement shall mean the Stock Purchase Agreement,
dated as of July 23, 1998, by and between the Borrower and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, an individual resident of the State of Florida, as amended pursuant
to the Amendment thereto, dated as of August 17, 1998, Amendment No. 2 thereto,
dated as of August 24, 1998, and Amendment No. 3 thereto, dated as of August 28,
1998, and as otherwise in effect on the Restatement Effective Date (as same may
be amended, modified or supplemented from time to time pursuant to the terms
hereof and thereof).
Acquisition Documents shall mean the Acquisition Agreement and
all other agreements, instruments and documents entered into or delivered in
connection with the Acquisition.
Adjusted Certificate of Deposit Rate shall mean on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates", published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by BTCo on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing, by (y) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements as specified in Regulation D applicable
on such day to a three-month certificate of deposit in excess of $100,000 issued
by a member bank of the Federal Reserve System with deposits in excess of five
billion dollars (including, without limitation, any marginal, emergency,
supplemental, special or other reserves), plus (2) the then daily net annual
assessment rate as estimated by BTCo for determining the current annual
assessment payable by BTCo to the Federal Deposit Insurance Corporation for
insuring three month certificates of deposit.
Adjusted Eurodollar Rate shall mean, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate obtained by dividing (i)
the Eurodollar Rate for such Interest Period by (ii) a percentage equal to 100%
minus the stated maximum rate (stated as a decimal) of all reserves, if any,
required by the Board of Governors of the Federal Reserve System to be
maintained by a member bank of the Federal Reserve System in New York City with
deposits in excess of five billion dollars against "Eurocurrency liabilities" as
specified in Regulation D (or against any other category of liabilities which
includes deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Lender to United
States
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residents).
Administrative Agent shall mean BTCC in its capacity as
Administrative Agent for the Lenders hereunder, and shall include any successor
thereof as Administrative Agent, appointed as such pursuant to Section 10.9.
Affected Loans shall have the meaning provided in Section 2.5(h).
Affiliate shall mean, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person or any Subsidiary of such Person or any Person
who is a director or officer of such Person or any Subsidiary of such Person.
For purposes of this definition, "control" shall mean the possession, directly
or indirectly, of the power to (i) vote ten percent or more of the securities
having ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of management and policies of that Person,
whether through the ownership of voting securities, by contract or otherwise and
either alone or in conjunction with others or any group. Neither any Lender nor
any Person controlling any Lender or under common control with such Lender
(including BTCo) nor any of their respective Subsidiaries shall be treated as an
Affiliate of the Credit Parties or their respective Subsidiaries.
Notwithstanding the foregoing, for purposes of determining the Borrowing Base,
no portfolio companies of any of the Equity Investors or of their Affiliates
(excluding Holdings and its Subsidiaries) shall be deemed an Affiliate of the
Borrower or any Subsidiary of the Borrower.
Agent shall mean and include each of the Administrative Agent
(including in its capacity as Payments Administrator), each Co-Syndication
Agent, the Documentation Agent and the Collateral Agent.
Agent Advance shall have the meaning provided in Section 2.3(c).
Agent Advance Period shall have the meaning given to such term in
Section 2.3(c).
Applicable Lending Office shall mean, with respect to each
Lender, such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Loan and such Lender's Domestic Lending Office in the case of a Base Rate Loan.
Applicable Margin shall mean (i) with respect to any Term Loan
maintained as (x) Base Rate Loans, 2.0% per annum and (y) Eurodollar Rate Loans,
3.25% per annum and (ii) with respect to any Revolving Loan, the applicable
percentage per annum set forth below based upon (i) until the first Start Date
occurring after the Restatement Effective Date, Level IV, (ii) at any time when
any Default or Event of Default has occurred and is continuing, Level IV and
(iii) at any time other than those periods referred to in clauses (i) and (ii)
above, the Level for such Quarterly Period:
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Eurodollar Base Unused
Level Rate Loan Rate Loan Line Fee
----- --------- --------- --------
Level I 1.50% 0.25% 0.125%
Level II 1.75% 0.50% 0.250%
Level III 2.00% 0.75% 0.375%
Level IV 2.25% 1.00% 0.500%
The Leverage Ratio shall be determined based on the delivery of a certificate of
the Borrower by the chief executive officer, chief financial officer, treasurer
or controller of the Borrower, together with the Financial Statements delivered
pursuant to Sections 7.1(a) and (b) for the fiscal quarter ended immediately
prior to the relevant Start Date, which certificate shall set forth the
calculation of the Leverage Ratio as of the last day of the fiscal quarter ended
immediately prior to the relevant Start Date. The Applicable Margin so
determined shall apply from the relevant Start Date to the End Date. If no
certificate and Financial Statements shall have been delivered to the
Administrative Agent on or prior to the relevant End Date, the Level shall be
Level IV until such certificate and Financial Statements are delivered.
Asset Sale shall mean the sale, transfer or other disposition by
Holdings, the Borrower or any Subsidiary of Holdings or the Borrower to any
Person other than the Borrower or any Subsidiary Guarantor of any asset of
Holdings, the Borrower or such Subsidiary (other than sales, transfers or other
dispositions in the ordinary course of business of inventory (including Rental
Equipment) and/or obsolete or excess equipment); provided that all
sale-leaseback transactions shall be deemed to constitute Asset Sales.
Auditors shall mean a nationally-recognized firm of independent
public accountants selected by the Borrower and reasonably satisfactory to the
Administrative Agent. For purposes of this Credit Agreement, the Borrower's
current firm of independent public accountants, Ernst & Young LLP, shall be
deemed to be satisfactory to the Administrative Agent.
Average Lease Term shall mean, as of any date, an amount equal to
(x) the total number of months that all existing Leases have been in effect on
such date (including for this purpose the month in which the date recalculation
occurs) divided by (y) the number of all existing Leases as of such date.
Average Rental Rate shall mean, at any time, the average monthly
rental payment per unit of leased Rental Equipment.
B of A shall mean Bank of America National Trust and Savings
Association.
Bailee Agreement shall have the meaning provided in Section
5.1(aa).
Bankruptcy Code shall have the meaning provided in Section
9.1(e).
Base Rate shall mean, at any time, the highest of (i) 1/2 of 1%
in excess of
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the Adjusted Certificate of Deposit Rate then in effect and (ii) the Prime
Lending Rate. If for any reason BTCo shall have determined (which determination
shall be final absent manifest error) that it is unable to ascertain the
Adjusted Certificate of Deposit Rate, the Base Rate shall be determined without
regard to clause (i), until the circumstance giving rise to such inability shall
no longer exist.
Base Rate Loan shall mean a Loan bearing interest as provided in
Section 4.2.
Board of Directors shall mean the Board of Directors of Holdings.
Borrower shall have the meaning provided in the preamble to this
Credit Agreement.
Borrowing shall mean an incurrence of Revolving Loans or Term
Loans of the same Type from all the Lenders on the same day (or resulting from
Conversion or Continuance on the same date), having, in the case of Eurodollar
Rate Loans, the same Interest Period.
Borrowing Base shall have the meaning given to such term in
Section 2.2.
Borrowing Base Certificate shall have the meaning given to such
term in Section 7.1(e).
Borrowing Base Deficiency shall mean, at any time, the amount, if
any, by which the Outstandings at such time exceeds the Borrowing Base at such
time.
Borrowing Date shall have the meaning provided in Section 2.4.
BT Account shall have the meaning given to such term in Section
2.6.
BT Delaware shall have the meaning provided in Section 2.3(b).
BTCC shall mean BT Commercial Corporation, in its individual
capacity.
BTCo shall mean Bankers Trust Company.
Business Day shall mean any day other than a Saturday, Sunday or
legal holiday on which commercial banks in New York, New York are authorized to
close. When used in connection with Eurodollar Rate Loans, this definition will
also exclude any day on which commercial banks are not open for dealing in U.S.
Dollar deposits in the New York interbank Eurodollar market.
Calculation Period shall have the meaning provided in Section
7.17.
Canadian Subsidiary shall have the meaning provided in Section
8.11.
CapEx Rollover Amount shall have the meaning provided in Section
8.4(b).
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Capital Expenditures shall mean, as applied to any Person for any
period, the aggregate of all expenditures of (whether paid in cash or accrued as
liabilities (including Capitalized Lease Obligations and the acquisition of
additional Rental Equipment)) such Person and its Subsidiaries during that
period that, in conformity with GAAP, are or are required to be included in the
property, plant or equipment or, with respect to Rental Equipment, lease
equipment reflected in the consolidated balance sheet of such Person; provided,
that Capital Expenditures shall not include the purchase price paid in
connection with the acquisition of the equity interest of any Person (including
through the purchase of all of the capital stock or other ownership interests of
such Person or through merger or consolidation) to the extent allocable to
property, plant and equipment or, with respect to Rental Equipment, lease
equipment reflected in the consolidated balance sheet of such Person; provided
further, that for purposes of Section 8.4, the amount of Capital Expenditures
for any period shall be equal to the sum of (i) the change in gross book value
of property, plant and equipment as set forth in the Borrower's respective
consolidated balance sheets and (ii) an amount determined in a manner consistent
with the calculation of "net capital expenditures for rental equipment" in Item
7 of the Borrower's annual report on Form 10-K for the year ended December 31,
1997.
Capital Lease, as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person or any of its
Subsidiaries as lessee which, in conformity with GAAP, is accounted for as a
capital lease on the consolidated balance sheet of that Person.
Capitalized Lease Obligations shall mean the obligations under
Capital Leases of the Borrower and its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
Cash Equivalents means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from Standard & Poor's Rating Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing not more than one year from the
date of creation thereof and, at the time of acquisition, having the highest
rating obtainable from either S&P's or Moody's; and (iv) certificates of deposit
or bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (a) is
at least "adequately capitalized" (as defined in the regulations of its primary
Federal banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $500,000,000; (v) repurchase agreements with
respect to, and which are fully secured by a perfected security interest in,
obligations of a type described in clause (i) or clause (ii) above and are with
any commercial bank described in clause (iv) above; and (vi) shares of any money
market mutual fund that (a) has its assets invested continuously in the types of
investments referred to in clauses (i) through (v) above, (b) has net assets of
not less
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than $500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.
Casualty Loss shall have the meaning given to such term in
Section 7.10.
CERCLA shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.
Certificate of Title shall mean certificates of title,
certificates of ownership or other registration certificates issued or required
to be issued under the certificate of title or other similar laws of any State
for any of the Rental Equipment.
Certificated Units shall mean each Unit (as defined in the
Security Agreement) which is evidenced by a Certificate of Title issued under
the motor vehicle or other applicable statute of any State.
Change of Control shall mean, at any time and for any reason
whatsoever, (a) Holdings shall cease to own directly 100% on a fully diluted
basis of the economic and voting interest in the Borrower's capital stock or (b)
the Borrower shall cease to own directly 100% on a fully diluted basis of the
economic and voting interests in the Unit Subsidiary's equity or (c) the Equity
Investors and/or their respective Affiliates and Permitted Transferees shall
cease to own on a fully diluted basis in the aggregate at least 51% of the
economic and voting interest in Holdings' capital stock or (d) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors or (e) a "change of control" or similar event shall occur as provided
in any Permitted Preferred Stock (or the certificates of designation therefor)
or the Senior Unsecured Notes Documents.
Code shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Credit Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
Collateral shall mean all of the Collateral as defined in the
Collateral Documents.
Collateral Access Agreements shall have the meaning given to such
term in Section 5.1(e).
Collateral Agent shall mean BTCC acting as collateral agent
pursuant to the Collateral Documents.
Collateral Documents shall mean all contracts, instruments and
other documents now or hereafter executed and delivered in connection with this
Credit Agreement, pursuant to which liens and security interests are granted to
the Collateral Agent in the Collateral for the benefit of the Lenders,
including, without limitation, each Mortgage, the Security Agreement, the Pledge
Agreement, the Concentration Account Agreement, the Collection Bank Agreements,
the Fleet Collection Bank Agreement, the Bailee Agreement and the Custodian
Agreement.
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Collection Account shall mean the account established at a
Collection Bank pursuant to the Collection Bank Agreement, into which funds
shall be transferred pursuant to Section 2.6.
Collection Bank shall have the meaning given to such term in
Section 2.6(b)(i).
Collection Bank Agreement shall have the meaning given to such
term in Section 2.6(b)(i).
Collective Bargaining Agreements shall have the meaning given to
such term in Section 5.1(o)(ii).
Commitment of a Lender shall mean its Term Loan Commitment, if
any, and its Revolving Credit Commitment, if any, in each case as may be reduced
from time to time pursuant to the terms of this Credit Agreement, and
Commitments shall mean, collectively, the Term Loan Commitments and Revolving
Credit Commitments of all Lenders.
Common Equity Financing shall have the meaning provided in
Section 5.1(h).
Concentration Account shall have the meaning given to such term
in Section 2.6(c).
Concentration Account Agreement shall have the meaning given to
such term in Section 2.6(c).
Consolidated Debt shall mean, at any time, all Indebtedness of
Holdings, the Borrower and their respective Subsidiaries (i) for borrowed money
(including, without limitation all Revolving Loans) and (ii) with respect to
Capitalized Lease Obligations, in each case determined on a consolidated basis.
Consolidated Net Income shall mean for any period the
consolidated net income of Holdings, the Borrower and their respective
Subsidiaries for such period as determined in accordance with GAAP.
Contingent Obligations shall mean as to any Person, without
duplication, any obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent
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Obligations shall not include (x) endorsements of instruments for deposit or
collection in the ordinary course of business or (y) guarantees made by a Person
(other than the Unit Subsidiary) of the obligations of the Borrower or a
Wholly-Owned Subsidiary of such Person which do not constitute Indebtedness of
the Borrower or such Wholly-Owned Subsidiary and are incurred in the ordinary
course of business of the Borrower or such Wholly-Owned Subsidiary. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
Continuation and Continuance each shall refer to a continuation
of Loans pursuant to Section 4.3, provided that neither term shall be deemed to
constitute the making of a Loan for purposes of this Credit Agreement.
Continuing Directors shall mean the directors of Holdings on the
Restatement Effective Date and each other director if such director's election
or nomination for the election to the Board of Directors is recommended by a
majority of the then Continuing Directors.
Convert, Conversion and Converted each shall refer to a
conversion of Loans of one Type into Loans of another Type pursuant to Section
4.3, provided that each such term shall not constitute the making of a Loan for
purposes of this Credit Agreement.
Co-Syndication Agent shall mean each of BT Commercial Corporation
and NationsBank, N.A., in each case in their capacities as Co-Syndication Agents
for the Lenders hereunder.
Credit Agreement shall mean this Credit Agreement, as the same
may be modified, amended, extended, restated, amended and restated or
supplemented from time to time.
Credit Documents shall mean, collectively, this Credit Agreement,
the Notes, the Letters of Credit, each of the Collateral Documents, each
Guaranty and all other documents and agreements now or hereafter executed and
delivered by a Credit Party in connection herewith or therewith, as the same may
be modified, amended, extended, restated or supplemented from time to time.
Credit Event shall mean the making of a Loan or the issuance of a
Letter of Credit.
Credit Parties shall mean, collectively, Holdings, the Borrower
and the Subsidiary Guarantors.
Custodian Agreement shall have the meaning provided in Section
5.1(bb).
Cypress Group shall mean the Cypress Group L.L.C., Cypress
Merchant Banking Partners L.P. and Cypress Offshore Partners L.P. or any new
partnership created to co-invest
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with Cypress Group L.L.C., Cypress Merchant Banking Partners L.P. or Cypress
Offshore Partners L.P.; provided that Persons which had a majority of the equity
interests in or otherwise controlled Cypress Group L.L.C., Cypress Merchant
Banking Partners L.P. and/or Cypress Offshore Partners L.P. on the Original
Effective Date or any of their Permitted Transferees either (x) hold all the
equity interests of such new partnership or (y) control such new partnership.
Default shall mean an event, condition or default which with the
giving of notice, the passage of time or both would be an Event of Default.
Defaulting Lender shall have the meaning given to such term in
Section 2.4(c).
Deposit Account Agreement shall have the meaning provided in
Section 5.1(z).
Disbursement Account shall have the meaning given to such term in
Section 2.3(b).
Disclosed Litigation shall mean the litigation disclosed on
Schedule IX; provided that any such litigation shall cease to constitute
Disclosed Litigation (and at such time shall be subject to the general standard
set forth in Section 6.4) at such time, if any, as there shall occur material
adverse developments (from the perspective of Holdings, the Borrower and their
respective Subsidiaries) after the Restatement Effective Date.
Dividend shall have the meaning given to such term in Section
8.6.
Documentation Agent shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
in its capacity as Documentation Agent for the Lenders hereunder.
Documents shall mean and include the Credit Documents and the
Transaction Documents.
Dollars and the sign $ shall each mean freely transferable lawful
money of the United States.
Domestic Lending Office shall mean, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I, as such annex may be amended from time to time.
EBITDA shall mean, in any fiscal period, Consolidated Net Income
(other than extraordinary items of Holdings, the Borrower and their respective
Subsidiaries for such period but including any Inventory or Rental Equipment
adjustments) for such period, (i) plus the amount of all Interest Expense,
federal, state and local income and franchise tax expense, depreciation and
amortization, including amortization of any goodwill or other intangibles for
such period, (ii) less gains and plus losses attributable to any fixed asset
sales (other than Rental Equipment), (iii) plus the amortization of debt
issuance costs, (iv) plus or minus (as the case may be) any other non-cash items
(other than any reserve established by Holdings against Accounts and/or
Inventory and/or Rental Equipment), in each case which have been subtracted or
added, as
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the case may be, in calculating Consolidated Net Income for such period, all
determined in accordance with GAAP, (v) plus or minus (as the case may be) any
increase or decrease in the amount of deferred taxes as shown on the
consolidated balance sheet as of the end of such period since the first day of
the same period (but without duplication of any taxes included in clause (i) of
this definition), (vi) plus or minus (as the case may be) any LIFO expense or
LIFO income, (vii) plus income attributable to discontinued operations directly
related to the Northeast Maryland manufacturing facility and (viii) plus all
customary non-recurring fees and expenses (including restructuring costs)
incurred or paid by Holdings, the Borrower and their respective Subsidiaries in
connection with the Transaction, all of the foregoing (i) through (vi) and
(viii) without duplication and only to the extent added or deducted in
calculating Consolidated Net Income.
Eligible Accounts Receivable shall mean as at any date, the
aggregate of all Accounts of the Borrower and its Wholly-Owned Subsidiaries then
due and payable in U.S. Dollars or Canadian Dollars and not deemed by the
Administrative Agent in its Permitted Discretion (after at least two Business
Days' prior notice to Borrower by Administrative Agent) to be ineligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, the face amount of such Accounts shall be reduced, without
duplication, by the amount of all returns, discounts, deferred revenue, claims,
contras, credits, charges, chargebacks, rebates or other allowances and amounts
unearned and (but without duplication of any of the foregoing) by the aggregate
amount of all reserves, limits and deductions provided for in this definition
and elsewhere in this Credit Agreement. Unless otherwise approved in writing by
the Administrative Agent, no Account shall be deemed to be an Eligible Account
Receivable if:
(a) it arises out of a sale or Lease for which no invoice has
been provided to the account debtor; or
(b) it arises out of a sale or Lease made to an Affiliate; or
(c) the Account is unpaid on the date which is 90 days after the
date on which the original invoice provides that such payment is due; or
(d) the Account (other than Accounts listed on Part A of Schedule
II describing the account party and the payment terms, but including any
such Account if such Account is unpaid 30 days after the invoice
provides for such payment) provides for payment more than 91 days after
the date of the original invoice; or
(e) it is from the same account debtor (or any Subsidiary
thereof) and 50% or more, in face amount, of all Accounts from such
account debtor (or any Subsidiary thereof) are ineligible pursuant to
(c) above; or
(f) the Account, when aggregated with all other Accounts of such
account debtor, exceeds 15% in face value of all Accounts of the
Borrower and its Subsidiaries whose Accounts are included in the
Borrowing Base then outstanding, to the extent of such excess; provided,
however, that Accounts supported or secured by insurance
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acceptable to the Administrative Agent or by an irrevocable letter of
credit in form and substance satisfactory to the Administrative Agent,
issued by a financial institution satisfactory to the Administrative
Agent, and duly pledged to the Collateral Agent (together with
sufficient documentation to permit direct draws by the Collateral
Agent) shall be excluded from this clause (f); or
(g) (i) the account debtor is also a creditor of the Borrower
(other than account debtors which have provided to the Administrative
Agent a "no-offset" letter in form and substance satisfactory to the
Administrative Agent), (ii) the account debtor has disputed its
liability on, or the account debtor has made any claim with respect to,
such Account or any other Account due from such account debtor to the
Borrower, which has not been resolved or (iii) the Account otherwise is
or may become subject to any right of setoff by the account debtor; or
(h) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or
made an assignment for the benefit of creditors, or if a decree or order
for relief has been entered by a court having jurisdiction over the
account debtor in an involuntary case under the federal bankruptcy laws,
as now constituted or hereafter amended, or if any other petition or
other application for relief under the federal bankruptcy laws has been
filed by or against the account debtor, or if the account debtor has
filed a certificate of dissolution under applicable state law or shall
be liquidated, dissolved or wound up, or shall authorize or commence any
action or proceeding for dissolution, winding-up or liquidation, or if
the account debtor has failed, suspended business, declared itself to be
insolvent, is generally not paying its debts as they become due or has
consented to or suffered a receiver, trustee, liquidator or custodian to
be appointed for it or for all or a significant portion of its assets or
affairs, unless (i) the payment of Accounts from such account debtor is
secured in a manner satisfactory to the Administrative Agent, (ii) with
respect to a voluntary or involuntary bankruptcy or similar proceeding,
the court presiding over such proceeding has authorized such account
debtor to pay such Account to Borrower or (iii) if the Account from such
account debtor arises subsequent to a decree or order for relief with
respect to such account debtor under the federal bankruptcy laws, as now
or hereafter in effect, the Administrative Agent shall have determined
that the timely payment and collection of such Account will not be
impaired; or
(i) the sale or Lease is to an account debtor outside of the
United States (except for receivables of account debtors who are located
in Canada not in excess of 20% of the Accounts and Accounts listed on
Part B of Schedule II), unless the account is supported by insurance
acceptable to the Administrative Agent or the account debtor thereon has
supplied the Borrower with an irrevocable letter of credit in form and
substance satisfactory to the Administrative Agent, issued by a
financial institution satisfactory to the Administrative Agent and which
has been duly pledged to the Collateral Agent (together with sufficient
documentation to permit direct draws by the Collateral Agent); or
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(j) with respect to Accounts arising from a sale, the sale to the
account debtor is on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return,
sale on approval or consignment basis or made pursuant to any other
written agreement providing for repurchase or return (other than
pursuant to ordinary course of business warranties); or
(k) the Administrative Agent determines in its Permitted
Discretion that such Account may not be paid by reason of the account
debtor's financial inability to pay; or
(l) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower duly
assigns its rights to payment of such Account to the Collateral Agent
pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
ss. 3727 et seq.); or
(m) the act of the Rental Equipment being leased and put in
service giving rise to such Account has not occurred or the services
giving rise to such Account otherwise have not been performed by the
Borrower and accepted by the account debtor or, with respect to an
Account arising from a sale, the Account does not represent a final
sale; or
(n) the Account does not comply in all material respects with all
applicable legal requirements; or
(o) the Collateral Agent does not have a valid and perfected
first priority security interest in or Lien on such Account, subject
only to Permitted Liens, or the Account does not otherwise conform in
all material respects to the representations and warranties contained in
the Credit Agreement or the other Credit Documents, except that the
value of any Account shall be reduced by the amount of any obligations
secured by Permitted Liens which are prior to the Lien in favor of the
Collateral Agent.
Notwithstanding anything to the contrary contained above, Eligible Accounts
Receivable shall not include any Accounts of the Canadian Subsidiary, unless and
until the Canadian Subsidiary becomes a Subsidiary Guarantor and a party to the
Security Agreement, and takes all other actions as may be requested by the
Collateral Agent to ensure that the Collateral Agent has a valid and perfected
first priority security interest in or Lien on the Accounts of the Canadian
Subsidiary.
Eligible Rental Equipment shall mean all Rental Equipment of the
Borrower and its Wholly-Owned Subsidiaries held for sale or lease or leased by
the Borrower or a Wholly-Owned Subsidiary as lessor in the ordinary course of
business and not deemed by the Administrative Agent acting in its Permitted
Discretion (after at least two Business Days' prior notice to Borrower by
Administrative Agent) to be ineligible for inclusion in the calculation of the
Borrowing Base. In any event, Eligible Rental Equipment shall account for
reserves for Rental Equipment that is unrentable. In determining the amount to
be so included, such Rental Equipment shall be valued on a net book value basis
consistent with the Borrower's consolidated month-end balance sheet, less any
reserves otherwise required by the Administrative Agent pursuant to Section
2.2(b), and less any Rental Equipment that the Administrative Agent determines
to be ineligible pursuant to Section 2.2(b). Unless otherwise approved in
writing by
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the Administrative Agent, no Rental Equipment shall be deemed Eligible Rental
Equipment if:
(a) the Rental Equipment is not owned solely by the Borrower or a
Wholly-Owned Subsidiary of the Borrower and with respect to which the
Borrower or a Wholly-Owned Subsidiary of the Borrower does not have
good, valid and marketable title, or is held by a third party for sale
on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on approval
or consignment basis; or
(b) the Rental Equipment (other than Rental Equipment being
leased or returned by a customer) is not stored on property that is
either (i) owned or leased by the Borrower or a Wholly-Owned Subsidiary
of the Borrower or (ii) owned or leased by a warehouseman that has
contracted with the Borrower or a Wholly-Owned Subsidiary of the
Borrower to store Rental Equipment on such warehouseman's property,
provided that, except as otherwise agreed to by the Collateral Agent for
purposes of determining Eligible Rental Equipment, after the 90th day
following the Restatement Effective Date, with respect to Rental
Equipment stored on property leased by the Borrower or a Wholly-Owned
Subsidiary of the Borrower, the Borrower shall have delivered in favor
of the Collateral Agent a Collateral Access Agreement executed by the
lessor of such property, and, with respect to Rental Equipment stored on
property owned or leased by a warehouseman, the Borrower shall have
delivered to the Collateral Agent a Collateral Access Agreement executed
by such warehouseman; or
(c) the Rental Equipment is not subject to a perfected first
priority Lien in favor of the Collateral Agent except (and in each case
subject to Section 11.21), (i) until the 60th day following the
Restatement Effective Date, with respect to Rental Equipment of SMI
constituting Certificated Units (excluding those evidenced by
Certificates of Title issued under the laws of the State of California),
all of such Rental Equipment of SMI, (ii) with respect to Rental
Equipment constituting Non-Certificated Units, all such Non-Certificated
Units with respect to which all applicable UCC filings have been made as
required by the Credit Documents, (iii) with respect to Eligible Rental
Equipment stored at sites described in clause (b) above, for Liens for
normal and customary warehouseman charges and (iv) to the extent subject
only to Permitted Liens, provided that the value of any Rental Equipment
shall be reduced by the amount of any obligations secured by Permitted
Liens which are prior to the Lien in favor of the Collateral Agent; or
(d) the Rental Equipment is not located in the United States or
Canada unless arrangements for the granting and perfection of a security
interest in such Rental Equipment have been made in a manner acceptable
to the Administrative Agent in its discretion; or
(e) the Rental Equipment does not conform in all material
respects to the representations and warranties contained in the Credit
Agreement or the other Credit Documents; or
(f) whether or not located on property owned or leased by the
Borrower, it is not segregated or otherwise separately identifiable from
goods of others, if any, stored on
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the same premises as such Rental Equipment; or
(g) the Rental Equipment is owned by the Borrower or any of its
Wholly-Owned Subsidiaries other than the Unit Subsidiary, in each case
unless the respective Rental Equipment constitutes (A) (x) prior to the
90th day following the Restatement Effective Date with respect to Rental
Equipment of SMI, Certificated Units or (y) Qualified Certificated Units
with respect to which all actions required to be taken pursuant to
Section 7.18 have in fact been taken or (B) prior to the 60th day
following the Restatement Effective Date with respect to Rental
Equipment of SMI, Non-Certificated Units; or
(h) the Rental Equipment is subject to Sales-Type Leases or
leased by the Borrower as lessor pursuant to a Lease which contains a
bargain purchase option; or
(i) the Rental Equipment has been or reasonably should be
classified by the Borrower or its Subsidiaries as type "D" or "E"
consistent with the manner in which the Borrower classifies Rental
Equipment on the Original Effective Date.
Notwithstanding anything to the contrary contained above, Eligible Rental
Equipment shall not include any Rental Equipment of the Canadian Subsidiary,
unless and until the Canadian Subsidiary becomes a Subsidiary Guarantor and a
party to the Security Agreement, and takes all other actions as may be requested
by the Collateral Agent to ensure that the Collateral Agent has a valid and
perfected first priority security interest in or Lien on the Rental Equipment of
the Canadian Subsidiary.
Eligible Transferee shall mean and include (i) a commercial bank,
(ii) a financial institution, (iii) with respect to any Lender, a fund which
invests in bank loans of the types made pursuant to this Credit Agreement as to
which such Lender (or an Affiliate of such Lender) acts as an investment advisor
or (iv) any other "accredited investor" (as defined in SEC Regulation D), other
than General Electric Capital Corporation and its Affiliates.
Employment Agreements shall have the meaning provided in Section
5.1(o)(vi).
End Date shall mean the date occurring on the third Business Day
following the date occurring 45 days (or in the case of the last fiscal quarter
of the Borrower, 90 days) after the end of the fiscal quarter in which the
previous Start Date occurred (or, if earlier, the date of the next Start Date).
Environmental Claims shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than internal
reports prepared by the Borrower or any of its Subsidiaries solely in the
ordinary course of such Person's business or as required in connection with a
financing transaction and not in response to any third party action or request
of any kind) or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement,
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cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
Environmental Law shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, guide, policy
and rule of common law now or hereafter in effect and in each case as amended,
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to the
environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the
Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300F et seq.; the Oil Pollution Act of 1990, 33 U.S.C ss. 2701 et
seq.; Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; and any
applicable state and local or foreign counterparts or equivalents.
Equity Blocked Commitments shall initially be $0, provided that
the amount of Equity Blocked Commitments shall be increased from time to time,
at the option of the Borrower, as specified in the last sentence of Section
2.5(b), provided that the amount of Equity Blocked Commitments shall be reduced
(but not below $0 and not by more than the amount of the respective increase) by
(x) the aggregate principal amount of Revolving Loans incurred by the Borrower
within 90 days after the date of any increase to the Equity Blocked Commitments
to the extent the Borrower certifies in writing in connection with its
incurrence of such Revolving Loans that the proceeds thereof shall be used (A)
to make voluntary repayments of principal of outstanding Term Loans in
accordance with clause (y) of the proviso to the last sentence of Section 2.5(b)
or (B) for any other use permitted hereunder in accordance with the applicable
terms and subject to the applicable conditions set forth herein, in each case
with the amount of decrease to the Equity Blocked Commitments not to exceed the
amount of proceeds of Revolving Loans which are to be so utilized and (y) on the
90th day after the date of each increase to the Equity Blocked Commitments
pursuant to the definition hereof, by the amount of such increase (except to the
extent the amount of such increase has theretofore been reduced pursuant to the
provisions of preceding clause (x)).
Equity Investors shall mean Cypress Group, K-S Investor Group and
Odyssey Investor Group.
Equity Financing Documents shall have the meaning provided in
Section 5.1(h).
ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Credit Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
ERISA Affiliate shall mean each person (as defined in Section
3(9) of ERISA)
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which together with the Borrower or a Subsidiary of the Borrower would be deemed
to be a "single employer" (i) within the meaning of Section 414(b), (c), (m) or
(o) of the Code or (ii) as a result of the Borrower or a Subsidiary of the
Borrower being or having been a general partner of such person.
Eurodollar Lending Office shall mean, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I, as such annex may be amended from time to time (or, if
no such office is specified, its Domestic Lending Office), or such other office
or Affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
Eurodollar Rate shall mean, with respect to an Interest Period
for each Eurodollar Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the average (rounded upward to the nearest whole
multiple of one-sixteenth of one percent per annum, if such rate is not such a
multiple) of the offered quotation, if any, to first class banks in the New York
interbank Eurodollar market by BTCo for U.S. dollar deposits of amounts in
immediately available funds comparable to the principal amount of the Eurodollar
Rate Loan of BTCC for which the Eurodollar Rate is being determined with
maturities comparable to the Interest Period for which such Eurodollar Rate will
apply as of approximately 11:00 A.M. New York City time two Business Days prior
to the commencement of such Interest Period.
Eurodollar Rate Loan shall mean a Loan bearing interest as
provided in Section 4.1.
Event of Default shall have the meaning provided for in Section
9.1 of this Credit Agreement.
Excess Other Liability Amount at any time shall mean the amount
(if any) by which the aggregate amount of Other Liabilities exceeds $75,000,000;
provided that to the extent the Borrower establishes to the satisfaction of the
Administrative Agent that an increase in Other Liabilities has occurred after
the Restatement Effective Date as a result of one or more Permitted
Acquisitions, then the Administrative Agent may in its sole discretion, but
shall not be required to, increase the $75,000,000 amount provided above by an
amount not to exceed the amount established to its satisfaction as being an
increase in such Other Liabilities as a result of such Permitted Acquisition or
Permitted Acquisitions.
Existing Indebtedness shall mean Indebtedness of Holdings, the
Borrower and their respective Subsidiaries outstanding prior to, and to remain
outstanding on and after, the Restatement Effective Date, and set forth on
Schedule III, without giving effect to extensions or renewals thereto, except as
expressly provided therein.
Existing Indebtedness Agreements shall have the meaning given to
such term in Section 5.1(o)(iii) hereof.
Existing Liens shall have the meaning set forth in Section
8.2(d).
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Expenses shall mean all present and future expenses incurred by
or on behalf of the Administrative Agent in connection with this Credit
Agreement, any other Credit Document or otherwise in its capacity as the
Administrative Agent under this Credit Agreement (including without limitation,
all costs related to the syndication efforts with respect to this Credit
Agreement), whether incurred heretofore or hereafter, which expenses shall
include, without being limited to, the cost of record searches, the reasonable
fees and expenses of attorneys and paralegals, all costs and expenses incurred
by the Administrative Agent in opening bank accounts, depositing checks,
electronically or otherwise receiving and transferring funds, and any charges
imposed on the Administrative Agent due to insufficient funds of deposited
checks and the standard fee of the Administrative Agent relating thereto,
collateral examination fees and expenses, reasonable fees and expenses of
accountants, appraisers or other consultants, experts or advisors employed or
retained by the Administrative Agent, out of pocket syndication fees and
expenses, fees and taxes relative to the filing of financing statements, costs
of preparing and recording any other Collateral Documents, all expenses, costs
and fees set forth in Article 4 of this Credit Agreement, all other fees and
expenses required to be paid pursuant to the Fee Letter and all fees and
expenses incurred in connection with releasing Collateral and the amendment or
termination of any of the Credit Documents.
Federal Funds Rate shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions received by the Payments Administrator from three Federal
Funds brokers of recognized standing selected by it.
Fee Letters shall mean those certain letters (x) dated as of May
22, 1997 among BTCC and the Borrower and (y) dated August 11, 1998 among the
various Agents and the Borrower, in each case providing for the payment of
certain fees in connection with this Credit Agreement.
Fees shall mean, collectively, the Unused Line Fee, the Letter of
Credit Fees, the Issuing Bank Fees and the other fees provided for in the Fee
Letters.
Financial Statements shall mean the consolidated balance sheets
and statements of operations and consolidated statements of cash flows and
statements of changes in shareholder's equity of each of Holdings and its
Subsidiaries and the Borrower and its Subsidiaries for the period specified
prepared in accordance with GAAP; provided that for purposes of Section 7.1(a),
the Financial Statements of Holdings shall include consolidating schedules.
Financing Transactions shall mean (i) the Common Equity Financing
and (ii) the occurrence of the Initial Credit Event on the Restatement Effective
Date.
Fleet Collection Account shall mean the account established
pursuant to the Fleet Collection Bank Agreement.
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Fleet Collection Account Acknowledgment shall have the meaning
set forth in Section 2.6(b).
Fleet Collection Bank Agreement shall mean that certain Lockbox
Agreement, dated as of July 19, 1993, by and between SMI and Fleet Bank, N.A.
(as successor in interest to National Westminster Bank USA).
Foreign Pension Plan shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States by the Borrower or any one
or more of its Subsidiaries primarily for the benefit of employees of the
Borrower or such Subsidiaries residing outside the United States, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
Funding Affiliate shall have the meaning provided in Section
4.10.
GAAP shall mean generally accepted accounting principles in the
United States as in effect from time to time subject to Section 1.2.
GaiaTech shall mean GaiaTech Incorporated.
Governing Documents shall mean, as to any Person, the certificate
or articles of incorporation and by-laws or other organizational or governing
documents of such Person.
Governmental Authority shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
Gross-Up Payments shall have the meaning provided in Section
2.9(b).
Guarantors shall mean Holdings and each Subsidiary Guarantor.
Guaranty shall mean the Holdings Secured Guaranty and the
Subsidiaries Guaranty.
Hazardous Materials shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contained dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances", "hazardous waste", "hazardous
materials", "extremely hazardous substances", "restricted hazardous waste",
"toxic substances", "pollutants", "toxic pollutants", "contaminants", or
"pollutants", or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority.
Highest Lawful Rate shall mean, at any given time during which
any Obligations
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shall be outstanding hereunder, the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the Obligations owing under this Credit Agreement and any
other Credit Document, under the laws of the State of New York (or the law of
any other jurisdiction whose laws may be mandatorily applicable notwithstanding
other provisions of this Credit Agreement and the other Credit Documents), or
under applicable federal laws which may presently or hereafter be in effect and
which allow a higher maximum nonusurious interest rate than under New York (or
such other jurisdiction's) law, in any case after taking into account, to the
extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and exclusions.
Holdings shall have the meaning provided in the preamble to this
Credit Agreement.
Holdings Common Stock shall mean the common stock of Holdings.
Holdings Secured Guaranty shall mean the Guaranty of Holdings
pursuant to Article 12 of this Credit Agreement.
Indebtedness of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all indebtedness of a second
Person secured by any Lien (in aggregate principal amount up to the amount of
such Liens) on any property owned by such first Person, whether or not such
indebtedness has been assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e., take-or-pay
and similar obligations, (vii) all net obligations of such Person under Interest
Rate Agreements, (viii) all reimbursement or other monetary obligations with
respect to surety, performance and bid bonds, and (ix) all Contingent
Obligations of such Person; provided, that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the ordinary course of
business.
Indemnitee shall have the meaning provided in Section 11.8.
Information Systems and Equipment shall mean all computer
hardware, firmware and software, as well as other information processing
systems, or any equipment containing embedded microchips, whether directly
owned, licensed, leased, operated or otherwise controlled by the Borrower or any
of its Subsidiaries, including through third-party service providers, and which,
in whole or in part, are used, operated, relied upon, or integral to, the
Borrower's or any of its Subsidiaries' conduct of their business.
Initial Credit Event shall mean the making of the initial Loans
on the Restatement Effective Date.
Intercreditor Agreement shall have the meaning provided in
Section 11.22.
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Interest Coverage Ratio shall mean for any period the ratio for
such period of (x) EBITDA to (y) Interest Expense.
Interest Expense shall mean the aggregate consolidated interest
accrued and/or paid by Holdings, the Borrower and their respective Subsidiaries
in respect of Indebtedness determined on a consolidated basis in accordance with
GAAP, including, without limitation, amortization of original issue discount on
any Indebtedness and of all fees payable in connection with the incurrence of
such Indebtedness (to the extent included in interest expense), the interest
portion of any deferred payment obligation, the interest component of any
Capitalized Lease Obligations, net cash costs under any Interest Rate
Agreements, all capitalized interest and interest paid by Holdings, the Borrower
or their respective Subsidiaries on debt guaranteed by Holdings, the Borrower or
their respective Subsidiaries; provided that Interest Expense shall not include
amortization of debt issuance costs.
Interest Period shall mean for any Eurodollar Rate Loan the
period commencing on the date of the Borrowing, Conversion or Continuance
thereof and ending on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be one, two, three or six months or, to the extent approved by all the
Lenders, nine or twelve months, in each case as the Borrower may, in an
appropriate Notice of Borrowing, Notice of Continuation or Notice of Conversion,
select; provided, however, that the Borrower may not select any Interest Period
(x) with respect to Revolving Loans, that ends after the Revolving Credit
Expiration Date or (y) with respect to Term Loans, that ends after the Term Loan
Maturity Date. Whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day; provided,
however, that if such extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day. Whenever any Interest
Period begins on the last 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 Interest Period), such Interest Period shall end on the last Business
Day of the applicable calendar month.
Interest Rate Agreement shall mean any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement under which the
Borrower or any of its Subsidiaries is a party or beneficiary.
Inventory shall mean all of the Borrower's now owned and existing
and hereafter arising or acquired inventory, wherever located and whether in the
possession of the Borrower or any other Person, including, without limitation,
(a) all raw materials, work in process, parts, components, assemblies, supplies
and materials used or consumed in the Borrower's business and (b) all goods,
wares and merchandise, finished or unfinished, held for sale or lease or
furnished or to be furnished under contracts of service, excluding the Rental
Equipment.
Investment shall have the meaning given to such term in Section
8.5.
Issuing Bank shall mean BTCo.
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Issuing Bank Fees shall have the meaning given to such term in
Section 4.7.
K-S Investor Group shall mean Keystone, Inc., FW Strategic
Partners, L.P. and Scotsman Partners, L.P. and any new partnership or entity
created to co-invest with Keystone, Inc., FW Strategic Partners, L.P., and
Scotsman Partners, L.P., provided that Persons which had a majority of the
equity interests in or otherwise controlled Keystone, Inc., FW Strategic
Partners, L.P. and/or Scotsman Partners, L.P. on the Original Effective Date or
any of their Permitted Transferees either (x) hold all the equity interests of
such new partnership or entity or (y) control such new partnership or entity.
Leases shall mean, collectively, the written agreements between
Borrower or any Subsidiary and an account debtor (other than Holdings, the
Borrower, or their respective Subsidiaries) in the ordinary course of business
of Borrower or such Subsidiary for the lease or rental of Rental Equipment by
Borrower or such Subsidiary to such account debtor in which the account debtor
agrees to pay to Borrower, such Subsidiary or their respective assigns Rentals.
Lender shall have the meaning given to such term in the preamble
to this Credit Agreement.
Lender Intercreditor Agreement shall mean that certain
intercreditor agreement, dated as of the Restatement Effective Date, entered
into by the Term Loan Lenders (on their own behalf and on the behalf of their
successors and assigns) and the Administrative Agent, for the benefit of the
Revolving Credit Lenders (and their successors and assigns), as same may be
amended, modified or supplemented from time to time.
Letter of Credit Fees shall have the meaning given to such term
in 4.7.
Letter of Credit Obligations shall mean, at any time, the sum of
(i) the aggregate undrawn amount of all Letters of Credit outstanding at such
time, plus (ii) the aggregate amount of all drawings under Letters of Credit
which have not been reimbursed by the Borrower (including through the incurrence
of Revolving Loans).
Letter of Credit Request shall have the meaning given to such
term in Section 3.4.
Letters of Credit shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of Inventory, Rental
Equipment, equipment or otherwise) issued for the account of the Borrower
pursuant to Article 3 of this Credit Agreement and all amendments, renewals,
extensions or replacements thereof.
Level shall mean and include Level I, Level II, Level III or
Level IV, whichever is then in effect.
Level I shall be in effect at any time the Leverage Ratio is less
than 4.0 to 1.
Level II shall be in effect at any time the Leverage Ratio is
equal to or greater than 4.0 to 1 but less than 4.75 to 1.
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Level III shall be in effect at any time the Leverage Ratio is
equal to or greater than 4.75 to 1 but less than 5.5 to 1.
Level IV shall be in effect at any time the Leverage Ratio is
equal to or greater than 5.5 to 1.
Leverage Ratio shall mean, at any time, the ratio of Consolidated
Debt at such time to EBITDA on the last day of the Test Period; provided that
for the purposes of calculating the Leverage Ratio only, EBITDA shall be
increased (or decreased) on a pro forma basis by EBITDA attributable to the
acquisition (or divestiture) in accordance with the terms hereof of a Subsidiary
or business unit, so long as the amount of any such increase is the actual
EBITDA earned by such Subsidiary or business unit and such actual EBITDA is set
forth in reasonable detail and with reasonable supporting documentation in a
written certificate delivered by the Borrower and signed by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower, all
to the satisfaction of the Administrative Agent (it being agreed that for
purposes of determining the Leverage Ratio, EBITDA attributable to the
acquisition of SMI pursuant to the Acquisition shall be (I) $9,375,000 for each
of the fiscal quarters ended September 30, 1997, December 31, 1997, March 31,
1998 and June 30, 1998 and (II) $6,317,935 for the period from the last day of
the fiscal quarter ended June 30, 1998 to (but excluding) the Restatement
Effective Date).
Lien(s) shall mean any lien, charge, pledge, security interest,
deed of trust, mortgage, other encumbrance or other arrangement having the
practical effect of the foregoing or other preferential arrangement of any other
kind and shall include the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement.
Loan shall mean any Revolving Loan or any Term Loan, and Loans
shall mean, collectively, the Revolving Loans and the Term Loans.
Majority Term Loan Lenders shall mean those Term Loan Lenders at
any time whose Term Loan Outstandings represent a majority of the total Term
Loan Outstandings of all Term Loan Lenders at such time.
Management Agreements shall have the meaning given to such term
in Section 5.1(o)(v).
Margin Stock shall have the meaning provided in Regulation U.
Master Lease Agreements shall have the meaning provided in
Section 5.1(cc).
Material Adverse Effect shall mean a material adverse effect on
(i) the business, operations, property, assets, liabilities or financial
condition of Holdings, the Borrower and their respective Subsidiaries taken as a
whole, (ii) the value of Collateral or the amount which the Administrative Agent
and the Lenders would be likely to receive (after giving consideration to delays
in payment and costs of enforcement) in the liquidation of such Collateral, or
(iii) the rights and remedies of BTCC, the Agents, the Issuing Bank or the
Lenders under any Credit
-23-
Document.
Material Contract shall mean any contract or other arrangement
(other than the Credit Documents), whether written or oral, to which Holdings,
the Borrower or any of their respective Subsidiaries is a party as to which the
breach, nonperformance, cancellation or failure to renew by any party thereto
may be reasonably expected to have a Material Adverse Effect.
Mobile Field Office shall mean Mobile Field Office Company, a New
Jersey corporation.
Mobile Field Office Liquidation shall mean the dissolution of
Mobile Field Office and the distribution of all of the assets of Mobile Field
Office to the Borrower.
Moody's shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
Mortgage Amendments shall have the meaning provided in Section
5.1(y).
Mortgage Policies shall mean each of the title insurance policies
delivered with respect to one or more of the Mortgages and Mortgaged Property.
Mortgaged Property means each property at any time subject to the
Mortgage with the Mortgaged Properties as of the Restatement Effective Date
designated as such on Schedule X.
Mortgages shall mean each of the mortgages, substantially in the
form of Exhibit L, which were executed and delivered pursuant to the
requirements of Section 5.1(z) of the Original Credit Agreement, which mortgages
cover the various Mortgaged Properties, in each case as same may be amended,
modified or supplemented from time to time.
Multiemployer Plan shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA.
Net Sale Proceeds shall mean, with respect to any Asset Sale, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received by Holdings, the Borrower or any of their respective
Wholly-Owned Subsidiaries from such Asset Sale, net of (i) transaction costs
(including, without limitation, (w) any federal, state and local income or other
taxes paid or estimated to be payable as a result of such Asset Sale, (x) any
underwriting, brokerage or other customary selling commissions and (y)
reasonable legal fees, and (z) advisory, consulting, accountants', investment
banking and other fees and expenses, including title and recording expenses and
reasonable expenses incurred for preparing such assets for sale, associated
therewith) (ii) payments of unassumed liabilities relating to the assets sold at
the time of, or within 90 days after, the date of such sale, and (iii) the
amount of such gross cash proceeds required to be used to repay any Indebtedness
(other than Indebtedness to the Lenders pursuant to this Credit Agreement) which
is secured by the respective assets which were sold.
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Non-Certificated Units shall mean all Units (as defined in the
Security Agreement) which are not Certificated Units.
Non-Qualified Units shall at any time mean any Unit (as defined
in the Security Agreement) which is not a Qualified Certificated Unit at such
time.
Notes shall mean, collectively, the Revolving Notes and the Term
Notes, and Note means any Revolving Note or any Term Note.
Notice of Borrowing shall have the meaning given to such term in
Section 2.3(a)(i) and shall include any deemed Notice of Borrowing pursuant to
Section 3.5.
Notice of Continuation shall have the meaning given to such term
in Section 4.3(a).
Notice of Conversion shall have the meaning given to such term in
Section 4.3(b).
Obligations shall mean, without duplication, the unpaid principal
of and interest on (including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to Holdings, the Borrower or any of their respective
Subsidiaries, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Notes, any reimbursement obligation or
indemnity of Holdings, the Borrower or any of their respective Subsidiaries on
account of Letters of Credit or any accommodation extended with respect to
applications for Letters of Credit, the Fees, the Expenses and all other
obligations and liabilities of Holdings, the Borrower or any of their respective
Subsidiaries to the Agents, the Issuing Bank or to the Lenders, whether direct
or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Credit Agreement, the Notes and any other Credit Document.
Odyssey Investor Group shall mean Odyssey Investment Partners
Fund, L.P. and Odyssey Coinvestors, LLC or any new partnership created to
co-invest with Odyssey Investment Partners Fund, L.P. and Odyssey Coinvestors,
LLC, provided that Persons which had a majority of the equity interests in or
otherwise controlled Odyssey Investment Partners Fund, L.P. and/or Odyssey
Coinvestors LLC on the Restatement Effective Date or any of their Permitted
Transferees either (x) hold all the equity interests of such new partnership or
entity or (y) control such new partnership or entity.
Operating Lease shall mean, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person other than a
Capitalized Lease Obligation.
Operating Lease Payment shall mean any payment made by Holdings,
the Borrower or any of their respective Subsidiaries under an Operating Lease.
Original Credit Agreement shall have the meaning provided in the
first WHEREAS clause to this Credit Agreement.
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Original Effective Date shall mean the Effective Date under, and
as defined in, the Original Credit Agreement.
Original Lenders shall mean each Person which was a Lender under,
and as defined in, the Original Credit Agreement immediately before the
occurrence of the Restatement Effective Date.
Original Letter of Credit shall mean the letters of credit
previously issued under the Original Credit Agreement.
Other Liabilities at any time shall mean the accounts payable and
accrued expenses of Holdings and its Subsidiaries on a consolidated basis at
such time set forth in the Borrower's consolidated balance sheet, but excluding
accrued interest to the extent otherwise reflected therein.
Outstandings shall mean, at any time, the sum of (i) the
principal amount of Revolving Loans outstanding at such time plus (ii) the
Letter of Credit Obligations at such time.
Payment Office shall mean ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ or any other office within the continental United States designated by the
Payments Administrator to the Borrower from time to time as the office for
payment of all amounts required to be paid by the Borrower under this Credit
Agreement.
Payments Administrator shall mean BTCC; provided, however, that
if BTCC shall cease to be the Administrative Agent hereunder, the Lenders shall
have the option to appoint one of the remaining Lenders as the Payments
Administrator by written notice to the Borrower.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
Permitted Acquisition shall mean the acquisition by the Borrower
of 100% of the capital stock or other equity interest of any Person, which
Person shall, as a result of such acquisition, become a Wholly-Owned Domestic
Subsidiary of the Borrower, provided that (A) the consideration paid by the
Borrower consists solely of cash (including proceeds of Revolving Loans), (B)
such Person shall own no capital stock of any other Person unless such Person
owns 100% of the capital stock of such other Person, (C) substantially all of
the business, division or product line acquired pursuant to the respective
Permitted Acquisition, or the business of the Person acquired pursuant to the
respective Permitted Acquisition and its Subsidiaries taken as a whole, is in
the United States or Canada and (D) all requirements of Sections 7.16 and 7.17
applicable to Permitted Acquisitions are satisfied (it being agreed that the
Acquisition is not a Permitted Acquisition and that the requirements of Section
7.17 shall not be applicable with respect to the Acquisition).
Permitted Discretion shall mean the Administrative Agent's
judgment exercised in good faith based upon its consideration of any factor
which the Administrative Agent believes
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in good faith: (i) will or could reasonably be expected to adversely affect the
value of any of the Collateral, the enforceability or priority of the Agents'
liens thereon or the amount which the Agents, the Issuing Bank and the Lenders
would be likely to receive (after giving consideration to delays in payment and
costs of enforcement) in the liquidation of such Collateral; (ii) suggests that
any collateral report or financial information delivered to the Administrative
Agent by any Person on behalf of the Borrower is incomplete, inaccurate or
misleading in any material respect; (iii) materially increases the likelihood of
a bankruptcy, reorganization or other insolvency proceeding involving the
Borrower or any of its Subsidiaries or any of the Collateral; or (iv) creates or
reasonably could be expected to create a Default or an Event of Default. In
exercising such judgment, the Administrative Agent may consider such factors
already included in or tested by the definition of Eligible Accounts Receivable
or Eligible Rental Equipment as well as any of the following: (i) the financial
and business climate of the Borrower's or any Subsidiary's industry, (ii)
changes in collection history and dilution with respect to the Accounts, (iii)
changes in any concentration of risk with respect to Accounts and Rental
Equipment, (iv) changes in operating and turnover statistics with respect to
Rental Equipment and/or Accounts, including actual versus historical and
projected, and (v) any other factors that materially change the credit risk of
lending to the Borrower on the security of the Accounts and Rental Equipment.
The burden of establishing lack of good faith hereunder shall be on the
Borrower.
Permitted Encumbrance shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the Mortgage Policy
delivered with respect thereto, all of which exceptions must be acceptable to
the Collateral Agent in its reasonable discretion.
Permitted Liens shall have the meaning given to such term in
Section 8.2.
Permitted Materials shall have the meaning given to such term in
Section 6.18(c).
Permitted Preferred Stock shall mean any preferred stock of
Holdings, so long as the terms of any such preferred stock of Holdings (i) do
not provide any collateral security, (ii) do not provide any guaranty or other
support by the Borrower or any Subsidiary of the Borrower or any Subsidiary of
Holdings, (iii) do not contain any mandatory put, redemption, repayment, sinking
fund or other similar provision occurring before the seventh anniversary of the
Restatement Effective Date, (iv) do not require the cash payment of dividends or
interest before the seventh anniversary of the Restatement Effective Date, (v)
do not grant the holders thereof any voting rights except for (i) voting rights
required to be granted to such holders under applicable law and (ii) limited
customary voting rights on fundamental matters such as mergers, consolidations,
sales of substantial assets, or liquidations involving Holdings and (vi) are
otherwise reasonably satisfactory to the Administrative Agent.
Permitted Sale-Leaseback Transactions shall mean the sale and
leaseback by the Borrower of Rental Equipment so long as (1) such transaction or
transactions are consummated prior to December 31, 1998, (2) the structure,
terms and conditions and documentation of any such transaction are in form and
substance satisfactory to the Administrative Agent and the Required Lenders, (3)
with respect to all units of Rental Equipment sold in any such transaction,
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the Borrower receives cash in an amount equal to not less than the net book
value of such units, (4) no unit of Rental Equipment sold pursuant to any such
transaction was acquired by the Borrower or any of its Subsidiaries after
December 31, 1993 and (5) the Borrower receives no more than $50,000,000 in cash
proceeds in connection with all such transactions.
Permitted Transferee shall mean with respect to any Person who is
a natural person, (i) such individual's spouse or children (natural or adopted),
any trust for such individual's benefit or the benefit of such individual's
spouse or children (natural or adopted), or any corporation or partnership in
which the direct and beneficial owner of all of the equity interest is such
Person or such individual's spouse or children (natural or adopted) or any trust
for the benefit of such persons; and (ii) the heirs, executors, administrators
or personal representatives upon the death of such Person or upon the
incompetency or disability of such Person for purposes of the protection and
management of such individual's assets.
Person shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party or government (including any division,
agency or department thereof), and, as applicable, the successors, heirs and
assigns of each.
Plan shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute by) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate which is organized under the laws of the United States and is
subject to Title I of ERISA, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
Pledge Agreement shall have the meaning provided in Section
5.1(x).
Prime Lending Rate shall mean the rate which BTCo publicly
announces in New York City from time to time as its prime lending rate, as in
effect from time to time. The Prime Lending Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. BTCo may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
Proceeds shall mean all proceeds of any Collateral.
Projections shall have the meaning provided in Section 5.1(q).
Qualified Certificated Units shall mean each Unit (as defined in
the Security Agreement), owned by the Borrower or any of its Subsidiaries,
whether owned on the Restatement Effective Date or acquired thereafter, which at
the time in question is a Certificated Unit with respect to which the
requirements set forth in Section 5.1(d)(C)(x) or (y) have been satisfied (with
such satisfaction to be determined on the date of any determination of whether
the respective Unit is a Qualified Certificated Unit).
Quarterly Period shall mean that period commencing on the
relevant Start Date
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and ending on the relevant End Date.
RCRA shall mean the Resources Conservation and Recovery Act, as
amended, 42 U.S.C.ss.6901 et seq.
Real Property of any Person shall mean all of the right, title
and interest of such Person in and to land, improvements and fixtures, including
leaseholds.
Recapitalization shall have the meaning assigned that term in the
Original Credit Agreement.
Recapitalization Agreement shall mean the Recapitalization
Agreement, dated as of April 11, 1997, by and among Scotsman Holdings, Inc.,
Cypress Merchant Banking Partners L.P., Cypress Offshore Partners L.P.,
Keystone, Inc., FW Strategic Partners L.P. and the securityholders of Scotsman
Holdings, Inc. named therein.
Recapitalization Documents shall mean the documents entered into
with respect to the Recapitalization.
Register shall have the meaning provided in Section 11.6.
Regulation D shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto.
Regulation T shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or portion thereto.
Regulation U shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto.
Regulation X shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or portion thereto.
Rental Equipment shall mean the mobile structures generally
constructed of steel or using a steel frame and undercarriage with an exterior
of wood or aluminum and similar products (but excluding Inventory) which are
sold or leased by Borrower or its Subsidiaries to third persons in the ordinary
course of business and used to provide office, classroom, storage, commercial or
other space, whether in single units or physically attached to such other units
(and including in such form, modular structures), which structures are capable
of being transported to and assembled on remote sites, and which may be equipped
with air conditioning and heating, electrical outlets, floors, partitions,
plumbing, carpeting, moldings, wall coverings, lighting and other accessories.
Rentals shall mean all fixed rents or rents which are fixed
except for adjustments based upon the Consumer Price Index payable under the
Leases in respect of the use of any Rental Equipment by account debtors as
lessees of such Rental Equipment to Borrower or its Subsidiaries as the lessor
of such Rental Equipment exclusive of any amounts paid or payable to
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Borrower or its Subsidiaries for the sale of Rental Equipment or other Inventory
or on account of the service, site preparation, installation and removal of
Rental Equipment, security deposits, insurance waivers, warranty service, late
charges, delivery fees, moving fees maintenance charges, taxes, insurance and
similar charges.
Replaced Lender shall have the meaning provided in Section
11.6(d).
Replacement Lender shall have the meaning provided in Section
11.6(d).
Reportable Event shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events to the extent to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
Required Appraisal shall have the meaning provided in Section
7.2.
Required Lenders shall mean, at any time, those Lenders then owed
or holding in the aggregate more than 50% of the sum of the then existing
aggregate unpaid principal amount of the Revolving Loans and the then existing
aggregate undrawn amount of the Total Commitments.
Requirement of Law shall mean, as to any Person, the Governing
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
Requisite Lenders shall mean, at any time, those Lenders whose
outstanding Revolving Credit Commitments (or if the Revolving Credit Commitments
have terminated, whose outstanding principal of Revolving Loans and share of
outstanding Letter of Credit Obligations, including participations therein) and
outstanding principal of Term Loans aggregate more than 50% of the sum of the
Total Commitments (or if same have terminated, the total Outstandings) and the
aggregate principal amount of all Term Loans then outstanding.
Restatement Effective Date shall have the meaning provided in
Section 11.14.
Revolving Credit Commitment shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I hereto directly below
the column entitled "Revolving Credit Commitment", as same may be reduced from
time to time pursuant to the terms of this Credit Agreement.
Revolving Credit Expiration Date shall mean May 21, 2002.
Revolving Credit Lender means, at any particular time, each
Lender which has a Revolving Credit Commitment at such time or, if the Revolving
Credit Commitments have then been terminated, each Lender which has outstanding
Revolving Loans and/or participations in Letters of Credit (or unreimbursed
payments with respect thereto).
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Revolving Credit Percentage of any amount required to be applied
pursuant to Sections 2.5(j) or (k), shall mean a fraction (expressed as a
percentage) the numerator of which is the Total Commitments at such time and the
denominator of which is the sum of the numerator and the aggregate principal
amount of then outstanding Term Loans.
Revolving Credit Proportionate Share of a Revolving Credit Lender
shall mean, at any particular time, a fraction, expressed as a percentage,
obtained by dividing its Revolving Credit Commitment by the aggregate Revolving
Credit Commitments of all the Revolving Credit Lenders or, if the Revolving
Credit Commitments have been terminated, by dividing (i) the sum of (A) the
outstanding Revolving Loans made by such Revolving Credit Lender, plus (B) the
amount of such Revolving Credit Lender's unfunded participations in outstanding
Letters of Credit, plus (C) the amount of all payments made by such Revolving
Credit Lender to the Issuing Bank in respect of its participations in Letters of
Credit for which the Borrower has not reimbursed such Revolving Credit Lender
(other than with respect to outstanding Revolving Loans deemed requested
pursuant to Section 3.5), by (ii) the sum of (A) the aggregate amount of all
Revolving Loans then outstanding, plus (B) the aggregate amount of all Revolving
Credit Lenders' unfunded participations in outstanding Letters of Credit, plus
(C) the aggregate amount of all payments made by all Revolving Credit Lenders to
the Issuing Bank in respect of their respective participations in Letters of
Credit for which the Borrower has not reimbursed the Revolving Credit Lenders
(other than with respect to outstanding Loans deemed requested pursuant to
Section 3.5).
Revolving Credit Termination Date shall mean the first date upon
which all Revolving Credit Commitments and Letters of Credit have terminated,
all Outstandings have been paid in full in cash, and all interest, Fees and
other amounts relating to the Revolving Credit Commitments, Revolving Loans and
Letters of Credit have been repaid in full.
Revolving Loans shall have the meaning given to such term in
Section 2.1(b).
Revolving Note shall mean a promissory note of the Borrower
payable to the order of a Lender, in the form of Exhibit A-2, evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from the
Revolving Loans made by such Lender or acquired by such Lender pursuant to
Section 11.6.
S&P shall mean Standard & Poor's Rating Services.
Sales-Type Leases shall mean a Lease that should be treated as a
capital lease in accordance with Financial Accounting Standards Board Statement
No. 13, as amended, from time to time or if such statement is not then in
effect, such other statement of GAAP as may be applicable.
SEC shall have the meaning given to such term in 7.1(j).
Section 2.9(b)(ii) Certificate shall have the meaning provided in
Section 2.9(b)(ii).
Secured Creditors shall have the meaning given such term in the
Security
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Agreement.
Security Agreement shall have the meaning provided in Section
5.1(d).
Senior Secured Notes shall mean the Borrower's $165,000,000 9
1/2% Senior Secured Notes due 2000 issued pursuant to an Amended and Restated
Indenture, dated as of May 22, 1997, by and among the Borrower, First Trust
National Association, as Trustee, and First Trust National Association, as
Collateral Agent thereunder.
Senior Unsecured Notes shall mean the 9 7/8% Senior Unsecured
Notes due 2007 issued by the Borrower, and any substantially identical exchange
notes issued pursuant to the Senior Unsecured Notes Indenture.
Senior Unsecured Notes Borrowing Base shall have the meaning
provided in Section 2.2(a).
Senior Unsecured Notes Borrowing Base Deficiency shall mean, at
any time, the amount, if any, by which the Outstandings at such time exceeds the
Senior Unsecured Notes Borrowing Base at such time.
Senior Unsecured Notes Documents shall mean the Senior Unsecured
Notes, the Senior Unsecured Notes Indenture and all other documentation relating
thereto.
Senior Unsecured Notes Indenture shall mean the Indenture, dated
as of May 22, 1997, providing for the issuance of the Senior Unsecured Notes.
Settlement Date shall have the meaning given to such term in
Section 2.4(b)(i).
Shareholders' Agreements shall have the meaning given to such
term in Section 5.1(o)(iv).
Signing R/C Lenders shall have the meaning provided in Section
11.20.
SMI shall mean Space Master International, Inc., a Georgia
corporation.
Start Date shall mean the third Business Day following the
earlier of (x) each date occurring 45 days (or in the case of the last fiscal
quarter of the Borrower, 90 days), after the end of a fiscal quarter of the
Borrower and (y) the date on which Financial Statements for a fiscal quarter are
delivered in accordance with Section 7.1, together with the certificate required
by the second sentence of the definition of "Applicable Margin", with the first
Start Date to occur on the third Business Day following the earlier of (i) the
date which is 45 days after September 30, 1998 and (ii) the date on which
Financial Statements for such fiscal quarter are delivered in accordance with
Section 7.1 together with the certificate required by the second sentence of the
definition of "Applicable Margin".
Subsidiaries Guaranty shall have the meaning provided in Section
5.1(w).
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Subsidiary shall mean as to any Person, a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Credit Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.
Subsidiary Guarantor shall have the meaning provided in Section
5.1(w); provided, that from and after the date that any Wholly-Owned Subsidiary
of the Borrower executes and delivers a counterpart of the Subsidiaries Guaranty
pursuant to the requirements of Section 7.16, such Wholly-Owned Subsidiary shall
also be a Subsidiary Guarantor.
Supermajority Term Loan Lenders shall mean those Term Loan
Lenders at any time whose Term Loan Outstandings represent at least 66-2/3% of
the total Term Loan Outstandings of all Term Loan Lenders at such time.
Syndication Date shall mean the earlier of (x) the date which is
60 days after the Restatement Effective Date and (y) the date (which may occur
prior to, on or after the Restatement Effective Date) upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication of the amended and restated Credit
Agreement (and the resulting addition of institutions as Lenders pursuant to
Section 11.6) has been completed, notice of which shall be promptly given to the
Borrower.
Tax Sharing Agreements shall have the meaning given to such term
in Section 5.1(o)(vii).
Taxes shall have the meaning given to such term in Section 2.9.
Term Loan shall have the meaning provided in Section 2.1(a).
Term Loan Commitment shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I hereto directly below the column
entitled "Term Loan Commitment", as same may be reduced from time to time
pursuant to the terms of this Credit Agreement.
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Term Loan Lender shall mean, at any particular time, each Lender
which has a Term Loan Commitment at such time or, after the date of the funding
of the Term Loans, each Lender which has any Term Loan Outstandings owing to it
at such time.
Term Loan Maturity Date shall mean May 21, 2005.
Term Loan Outstandings shall mean, with respect to any Term Loan
Lender at any particular time, the aggregate outstanding principal balance of
the Term Loans owing to such Term Loan Lender.
Term Loan Percentage of any amount required to be applied
pursuant to Sections 2.5(j) or (k), shall mean a fraction (expressed as a
percentage) the numerator of which is the total Term Loan Outstandings at such
time and the denominator of which is the sum of the numerator and the Total
Commitments as then in effect.
Term Loan Proportionate Share of a Term Loan Lender shall mean,
at any particular time, a fraction, expressed as a percentage, obtained by
dividing its Term Loan Commitment by the aggregate Term Loan Commitments of all
the Term Loan Lenders or, after the date of the funding of the Term Loans, by
dividing (i) the Term Loan Outstandings of such Term Loan Lender by (ii) the
aggregate Term Loan Outstandings of all Term Loan Lenders.
Term Loan Scheduled Repayment shall have the meaning given to
such term in Section 2.5(a).
Term Loan Scheduled Repayment Date shall have the meaning given
to such term in Section 2.5(a).
Term Loans shall have the meaning given to such term in Section
2.1.
Term Note shall mean a promissory note of the Borrower payable to
the order of a Lender, in the form of Exhibit A-1, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Term Loans made
by such Lender or acquired by such Lender pursuant to Section 11.6.
Test Period shall mean, at any time, the four consecutive fiscal
quarters of the Borrower then last ended (taken as a whole).
Total Available Commitments at any time shall mean the Total
Commitments at such time less the Equity Blocked Commitments at such time.
Total Commitments at any time shall mean the aggregate of the
Revolving Credit Commitments, as then in effect, of all the Lenders.
Total Term Loan Commitments at any time shall mean the sum of the
Term Loan Commitments of each of the Lenders.
Trade Name License Agreement shall mean that certain Trade Name
and Service ▇▇▇▇ License Agreement entered into in connection with the
Acquisition by and among the Borrower, the Seller under the Acquisition
Agreement and certain affiliated companies of the Seller, substantially in the
form of Exhibit F to the Acquisition Agreement and as otherwise in effect on the
Restatement Effective Date (as same may be amended, modified or supplemented
from time to time pursuant to the terms hereof and thereof).
Tranche shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being two separate Tranches,
i.e., Term Loans and Revolving Loans.
Transaction shall mean, collectively, (i) the Common Equity
Financing, (ii) the
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Acquisition and (iii) the entering into of the Credit Documents and the
incurrence of Loans and issuance of Letters of Credit hereunder on the
Restatement Effective Date.
Transaction Documents shall mean the Equity Financing Documents
and the Acquisition Documents.
Type shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Rate Loan.
UCC shall mean the Uniform Commercial Code.
Unfunded Current Liability of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
Unit Certificates shall mean certificates of title, certificates
of ownership or other registration certificates issued or required to be issued
under the laws of any State for any of the Rental Equipment owned or leased by
the Borrower or any Guarantor.
Unit Subsidiary means Willscot Equipment, LLC, a Delaware limited
liability company.
Unit Subsidiary Management Agreement shall mean the Unit
Subsidiary Management Agreement (as defined in the Original Credit Agreement and
entered into in connection therewith) and shall include any other management
agreement entered into by SMI with the Unit Subsidiary so long as all terms and
conditions thereof are reasonably acceptable to the Administrative Agent.
United States and U.S. shall each mean the United States of
America.
Unused Line Fee shall have the meaning provided in Section 4.6.
Utilization shall mean for any period the fraction expressed as a
percentage, (x) the numerator of which is the gross book value of units of
Rental Equipment leased to customers at the end of such period and (y) the
denominator of which is the gross book value of units of Rental Equipment owned
or leased (as lessee) by the Borrower at the end of such period.
Wholly-Owned Domestic Subsidiary shall mean, as to any Person,
any Wholly-Owned Subsidiary of such Person that is incorporated under the laws
of the U.S., any State thereof, the United States Virgin Islands or Puerto Rico.
Unless otherwise qualified, all references to a "Wholly-Owned Domestic
Subsidiary" or to "Wholly-Owned Domestic Subsidiaries" in this Credit Agreement
shall refer to a Wholly-Owned Domestic Subsidiary or Wholly-Owned Domestic
Subsidiaries of the Borrower.
Wholly-Owned Subsidiary shall mean, as to any Person, (i) any
corporation 100%
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of whose capital stock (other than director's qualifying shares) is at the time
owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person
and (ii) any partnership, association, joint venture or other entity in which
such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a
100% equity interest at such time. Unless otherwise qualified, all references to
a "Wholly-Owned Subsidiary" or to "Wholly-Owned Subsidiaries" in this Credit
Agreement shall refer to a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries
of the Borrower.
Year 2000 Compliant shall mean that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing), before, during and after the year 2000,
as well as same and multi-century dates, or between the years 1999 and 2000,
taking into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing with,
other Information Systems and Equipment, shall in all material respects
accurately accept, release and exchange date data, and shall in all material
respects continue to function in the same manner as it performs today and shall
not otherwise materially impair the accuracy or functionality of Information
Systems and Equipment.
1.2. Accounting Terms and Determinations. (a) Unless otherwise
defined or specified herein, all accounting terms used herein shall have the
meanings customarily given in accordance with GAAP, and all financial
computations to be made under this Credit Agreement shall, unless otherwise
specifically provided herein, be made in accordance with GAAP applied on a basis
consistent in all material respects with the 1997 Financial Statements referred
to in Section 6.10(b). All accounting determinations for purposes of determining
compliance with Sections 8.4, 8.9 and 8.10 and calculating the Borrowing Base as
set forth in Section 2.2 and the definitions of "Eligible Rental Equipment" and
"Eligible Accounts Receivable" shall be made in accordance with GAAP as in
effect on the Restatement Effective Date and applied on a basis consistent in
all material respects with the 1997 Financial Statements referred to in Section
6.10(b). Furthermore, for avoidance of doubt, all such accounting determinations
shall, except as specifically set forth in the definition of "Leverage Ratio",
include the results of SMI on a consolidated basis for periods after the
consummation of the Acquisition (but not on a pro forma basis for the
Acquisition for periods prior to the consummation thereof), to the extent
applicable. Without limiting the foregoing, if the Borrower changes its
depreciation methodology after the Restatement Effective Date, such change shall
not be given effect for purposes of determining compliance with the Sections
referenced in the immediately preceding sentence or for making calculations of
the types described in the immediately preceding sentence. The Financial
Statements required to be delivered hereunder from and after the Restatement
Effective Date and all financial records shall be maintained in accordance with
GAAP as in effect as of the date of the Financial Statements referred to in
Section 6.10(b) or, if GAAP shall change from the basis used in preparing the
Financial Statements referred to in Section 6.10(b), the certificates required
to be delivered pursuant to Section 7.1 demonstrating compliance with the
covenants contained herein shall include calculations setting forth the
adjustments necessary to demonstrate how the Borrower is in compliance with the
financial covenants based upon GAAP as utilized in the Section 6.10(b) Financial
Statements.
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1.3. Other Defined Terms. Terms not otherwise defined herein
which are defined in the UCC as in effect on the date hereof in the State of New
York shall have the meanings given them in such UCC. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Credit
Agreement shall refer to this Credit Agreement as a whole and not to any
particular provision of this Credit Agreement, and references to Article,
Section, Schedule, Exhibit and like references are references to this Credit
Agreement unless otherwise specified. An Event of Default shall "continue" or be
"continuing" until such Event of Default has been cured or waived in accordance
with Section 11.10 hereof.
ARTICLE 2.
Amount and Terms of Credit
2.1. The Commitments. (a) Subject to the terms and conditions set
forth in this Credit Agreement, on the Restatement Effective Date, each Term
Loan Lender severally agrees to make a term loan to the Borrower (the "Term
Loans") in an aggregate amount equal to its Term Loan Proportionate Share of the
Total Term Loan Commitments, which Term Loans shall be made and initially
maintained as a single Borrowing of Base Rate Loans (subject to the option to
convert such Term Loans pursuant to Section 4.3). Once repaid, Term Loans
incurred hereunder may not be reborrowed. The Borrower hereby agrees to execute
and deliver to each Lender a Term Note in the form of Exhibit A-1 to evidence
the Term Loans made by each such Lender.
(b) Subject to the terms and conditions set forth in this Credit
Agreement, on and after the Restatement Effective Date and to and excluding the
Revolving Credit Expiration Date, each Revolving Credit Lender severally agrees
to make loans and advances to the Borrower hereunder (the "Revolving Loans").
Subject to the provisions of this Credit Agreement, the Borrower may borrow,
repay (without penalty, except for breakage costs under Section 4.5(b)) and
re-borrow Revolving Loans, all in accordance with the terms and conditions
hereof. On and immediately after the occurrence of the Restatement Effective
Date, the Revolving Credit Commitment for each Lender shall be the amount set
forth opposite such Lender's name in Schedule I hereto directly below the column
entitled "Revolving Credit Commitment" (as same may be reduced from time to time
pursuant to the terms of this Credit Agreement). In connection with the increase
to the Total Commitments to occur on the Restatement Effective Date, the
Borrower shall repay in full all Revolving Loans outstanding on the Restatement
Effective Date (although new Revolving Loans may be incurred hereunder on the
Restatement Effective Date in accordance with the provisions hereof, so that the
Lenders participate in each Borrowing of outstanding Revolving Loans pro rata on
the basis of their Revolving Loan Commitments (as in effect on the Restatement
Effective Date) as provided herein), it being understood and agreed that the
Borrower shall pay all breakage or similar costs of the type described in
Section 4.5(b) incurred by the Lenders in connection with any repayment or
reborrowing of Revolving Loans. The Borrower hereby agrees to execute and
deliver to each Lender a Revolving Note in the form of Exhibit A-2 to evidence
the Revolving Loans made by each such Lender.
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2.2. Determination of Borrowing Base for Revolving Loans; etc.
(a) Subject to Section 2.2(b) and Section 2.3(c), Revolving Loans shall not in
aggregate principal amount at any time outstanding exceed, when added to the
Letter of Credit Obligations at such time, the least of:
(i) the Total Available Commitments as then in effect;
(ii) the amount then equal to:
(A) up to Eighty-five percent (85%) of the Eligible
Accounts Receivable, plus
(B) up to Sixty-five percent (65%) of the Eligible Rental
Equipment, minus
(C) the Excess Other Liability Amount at such time, minus
(D) the Borrower's exposure (as determined by the
Administrative Agent) under any Interest Rate Agreements entered
into in accordance with Section 8.3(g), minus
(E) an amount equal to the Equity Blocked Commitments as
then in effect; or
(iii) the amount then equal to:
(A) (i) 75% of the net book value of Eligible Rental
Equipment of the Borrower and its Restricted Subsidiaries (as
defined in the Senior Unsecured Notes Indenture) and (ii) 85% of
the book value of the Eligible Accounts Receivable of the
Borrower and its Restricted Subsidiaries (as defined in the
Senior Unsecured Notes Indenture) less (x) the amount of net
proceeds which have been received in connection with a Permitted
Units Financing (as defined in the Senior Unsecured Notes
Indenture) permitted under clause (b)(13)(i) of Section 4.09 of
the Senior Unsecured Notes Indenture (provided that such
reduction shall apply only to the extent of any outstanding
balance on such financing and for so long as such Permitted Units
Financing is in effect) and (y) the amount of any outstanding
Attributable Debt (as defined in the Senior Unsecured Notes
Indenture) incurred under clause (b)(12) of Section 4.09 of the
Senior Unsecured Notes Indenture (with all determinations of the
amount specified above in this clause (A) to be made in
accordance with the requirements of the Senior Unsecured Notes
Indenture), minus
(B) the aggregate principal amount of Term Loans then
outstanding.
The amount calculated in accordance with clause (ii) above is
hereinafter referred to as the "Borrowing Base", and the amount calculated in
accordance with clause (iii) above is
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hereinafter referred to as the "Senior Unsecured Notes Borrowing Base".
(b) The Administrative Agent shall in the exercise of its
Permitted Discretion (x) at any time be entitled to (i) establish and increase
or decrease reserves against Eligible Accounts Receivable and Eligible Rental
Equipment, and (ii) impose additional restrictions (or eliminate the same) to
the standards of "Eligible Accounts Receivable" and "Eligible Rental Equipment"
and (y) at any time after the Restatement Effective Date be entitled to reduce
the advance rates under Section 2.2(a)(ii)(A) or (B) or restore such advance
rates to any level equal to or below the advance rates stated in Section
2.2(a)(ii)(A) or (B). The Administrative Agent may, but shall not be required
to, rely on each Borrowing Base Certificate and any other schedules or reports
delivered to it in connection herewith in determining the then eligibility of
Accounts and Rental Equipment. Reliance thereon by the Administrative Agent from
time to time shall not be deemed to limit the right of the Administrative Agent
to revise advance rates or standards of eligibility as provided in this Section
2.2(b).
(c) Each of the Borrowing Base and the Senior Unsecured Notes
Borrowing Base will be computed monthly and a Borrowing Base Certificate
presenting its computation will be delivered promptly to the Administrative
Agent as set forth in Section 7.1(e). Notwithstanding anything to the contrary
contained herein, the Administrative Agent shall be satisfied that on the
Restatement Effective Date and after giving effect to the consummation of the
Transaction, the Borrower shall be able to incur additional Outstandings, after
giving effect to all Credit Events on the Restatement Effective Date, of
$60,000,000 or more in compliance with the applicable restrictions contained in
Section 2.2(a).
2.3. Borrowing Mechanics. (a) Except as provided in Section
2.3(b) or (c), Borrowings shall be made on notice from the Borrower to the
Payments Administrator, given not later than 1:00 P.M. New York City time on the
date on which the proposed Borrowing consisting of Base Rate Loans is requested
to be made and on the third Business Day prior to the date on which any proposed
Borrowing consisting of Eurodollar Rate Loans is requested to be made.
(i) Each Notice of Borrowing shall be given by either telephone,
telecopy, telex, facsimile or cable, and, if by telephone, confirmed in
writing, substantially in the form of Exhibit B-1 (the "Notice of
Borrowing"), appropriately completed to specify the aggregate principal
amount of the Loans to be made pursuant to such Borrowing, the date of
such Borrowing (which shall be a Business Day), whether the Loans being
made pursuant to such Borrowing shall constitute Term Loans or Revolving
Loans and whether the Loans being made pursuant to such Borrowing are to
be initially maintained as Base Rate Loans or Eurodollar Rate Loans and,
if Eurodollar Rate Loans, the initial Interest Period to be applicable
thereto. The Payments Administrator shall promptly give each Lender
which is required to make such Loan of the Tranche specified in the
respective Notice of Borrowing, notice of such proposed Borrowing, of
such Lender's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the
Notice of Borrowing. Each Notice of Borrowing shall be irrevocable by
and binding on the Borrower.
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(ii) The Borrower shall notify the Payments Administrator in
writing of the names of the officers authorized to request the Loans on
behalf of Borrower, and shall provide the Payments Administrator with a
specimen signature of each such officer. The Payments Administrator
shall be entitled to rely conclusively on such officers' authority to
request the Loans on behalf of the Borrower until the Payments
Administrator receives written notice to the contrary. The Payments
Administrator shall have no duty to verify the authenticity of the
signature appearing on any Notice of Borrowing or other writing
delivered pursuant to this Section 2.3(a) and, with respect to an oral
request for the Loans, the Payments Administrator shall have no duty to
verify the identity of any individual representing himself as one of the
officers authorized to make such request on behalf of the Borrower.
Neither the Payments Administrator nor any of the Lenders shall incur
any liability to the Borrower as a result of acting upon any telephonic
notice referred to in this Section 2.3(a) which notice the Payments
Administrator believes in good faith to have been given by a duly
authorized officer or other individual authorized to request the Loans
on behalf of the Borrower or for otherwise acting reasonably and in good
faith under this Section 2.3(a) and, upon the funding of the Loans by
the Lenders in accordance with this Credit Agreement, pursuant to any
such telephonic notice, the Borrower shall be deemed to have made a
Borrowing of the Loans hereunder.
(iii) In a Notice of Borrowing, the Borrower may request one or
more Borrowings on a single day. Each such Borrowing shall, unless
otherwise specifically provided herein, consist entirely of Loans of the
same Type and shall be in an aggregate amount for all Lenders of not
less than $1,000,000 in the case of Eurodollar Rate Loans. Unless
otherwise requested in the applicable Notice of Borrowing, all Loans
shall be Base Rate Loans. All Term Loans and Revolving Loans made on the
Restatement Effective Date shall initially be Base Rate Loans and
thereafter may be continued as Base Rate Loans or converted into
Eurodollar Rate Loans, in the manner provided in Section 4.3(b). The
right of the Borrower to choose Eurodollar Rate Loans is subject to the
provisions of Section 2.3(a)(v) and 4.3(c).
(iv) Upon the Payments Administrator's receipt of one or more
Notices of Borrowing with respect to the Loans to be made on the
Restatement Effective Date, the Payments Administrator shall give each
Lender prompt notice by telephone or facsimile transmission of such
Notice of Borrowing. Subject to the reasonable determination by the
Payments Administrator that the applicable conditions for borrowing
contained in Article 5 are satisfied, (x) each Term Loan Lender shall
make available to the Payments Administrator at the Payment Office its
Term Loan Proportionate Share of the Term Loans to be made on the
Restatement Effective Date, in immediately available funds no later than
11:00 A.M. New York City time on the Restatement Effective Date, and (y)
each Revolving Credit Lender shall make available to the Payments
Administrator at the Payment Office its Revolving Credit Proportionate
Share of the aggregate amount of Revolving Loans to be made on the
Restatement Effective Date (in the case of any Original Lender, net of
amounts of principal to be repaid to such Lender on the Restatement
Effective Date), in immediately available funds no later than 11:00 A.M.
New York City time on the Restatement Effective Date. Unless the
Payments
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Administrator receives contrary written notice prior to the Restatement
Effective Date, it is entitled to assume that each Lender will make
available the amounts specified in the immediately preceding sentence
and, in reliance upon such assumption, but without any obligation to do
so, the Payments Administrator may advance such amounts on behalf of the
Lenders (with the Lenders being obligated to the Payments Administrator
for any such advances in accordance with the provisions of Section
2.4(c)).
(v) Notwithstanding the foregoing, the Borrower may not incur
Eurodollar Rate Loans on or after the Restatement Effective Date and
prior to the Syndication Date.
(b) The Borrower has informed the Administrative Agent that it
has a checking account (the "Disbursement Account") with B of A for general
corporate purposes, including the purpose of paying trade payables and other
operating expenses. The Lenders hereby authorize the Payments Administrator, and
so long as the conditions for Borrowing in Article 5 remain satisfied, the
Payments Administrator on behalf of the Lenders may but shall not be obligated
to make Revolving Loans to cover the amount of checks presented for payment and
other disbursements from the Disbursement Account. Such Borrowings shall be of
Base Rate Loans only and will at no time exceed the amount available for the
Borrowing of Revolving Loans under Section 2.2 (as determined in good faith by
the Administrative Agent). Upon the Borrower providing the Administrative Agent
with written notice that it has opened a checking account with Bankers Trust
(Delaware) ("BT Delaware") and intends this account to replace the then existing
Disbursement Account, then from and after the date set forth in such notice
therefore the Disbursement Account shall be such account with BT Delaware and
advice from BT Delaware of amounts required to cover amounts set forth in the
second sentence of this clause (b) will be deemed a sufficient Notice of
Borrowing.
(c) In the event the Borrower is unable to comply with (i) the
Borrowing Base limitations set forth in Section 2.2(a) or (ii) the conditions
precedent to the making of a Revolving Loan or the issuance of a Letter of
Credit set forth in Section 5.2, the Lenders authorize the Payments
Administrator, for the account of the Lenders, to make Revolving Loans (the
"Agent Advances") to the Borrower for a period commencing on the date the
Payments Administrator first receives a Notice of Borrowing requesting an Agent
Advance until the earlier of (i) the fifteenth Business Day after such date,
(ii) the date the Borrower is again able to comply with the Borrowing Base
limitations and the conditions precedent to the making of Revolving Loans and
issuance of Letters of Credit, or obtains an amendment or waiver with respect
thereto, or (iii) the date the Required Lenders instruct the Payments
Administrator to cease making Agent Advances (in each case, the "Agent Advance
Period"). The Payments Administrator shall not make any Agent Advance to the
extent that at such time the amount of such Agent Advance when added to the
aggregate outstanding amount of other Agent Advances would exceed the least of
(A) the remainder of (i) the Total Available Commitments at such time less (ii)
the Outstandings at such time, (B) the remainder of (i) the Senior Unsecured
Notes Borrowing Base at such time less (ii) the Outstandings at such time and
(C) the lesser of (x) $20,000,000 or (y) 10% of the Outstandings at such time.
Agent Advances will be subject to periodic settlement with the Lenders under
Section 2.4.
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2.4. Settlements Among the Payments Administrator and the
Lenders. (a) Except as provided in Section 2.4(b), the Payments Administrator
shall give to each Lender prompt notice of each Notice of Borrowing by telecopy,
telex, facsimile or cable. No later than 12:00 Noon New York City time on the
date of each Borrowing representing the incurrence of Revolving Loans (each a
"Borrowing Date") (unless the Restatement Effective Date is the date of such
incurrence, in which case no later than 11:00 A.M. New York City time on the
Restatement Effective Date), each Lender with a Revolving Credit Commitment will
make available for the account of its Applicable Lending Office, to the Payments
Administrator at its Payment Office, in immediately available funds, for the
account of the Borrower, its Revolving Credit Proportionate Share of such
Borrowing. To the extent the Lenders have made such amounts available to the
Payments Administrator as provided above, the Payments Administrator will make
the aggregate of such amounts available to the Borrower by 1:00 P.M., New York
time, on the respective Borrowing Date in accordance with this Section 2.4 and
in like funds received by the Payments Administrator. Unless the Payments
Administrator shall have been notified by any Lender prior to the date of such
Borrowing that such Lender does not intend to make available to the Payments
Administrator its portion of such Borrowing to be made on such date, the
Payments Administrator may assume that such Lender will make such amount
available to the Payments Administrator at its Payment Office on such date of
Borrowing, or, if applicable, the Settlement Date and the Payments
Administrator, in reliance upon such assumption, may but shall not be obligated
to make available the amount of the Borrowing to be provided by such Lender.
Except as provided in Section 2.4(b) and subject to Section 2.4(e), promptly
after its receipt of payments from or on behalf of the Borrower (other than
amounts payable to the Administrative Agent to reimburse the Administrative
Agent and the Issuing Bank for fees and expenses payable solely to them), the
Payments Administrator will cause such payments to be distributed ratably to the
Lenders. The Lenders will apply such payments in accordance with Section 2.6(d).
(b) Unless the Required Lenders have instructed the Payments
Administrator to the contrary, the Payments Administrator on behalf of the
Lenders may but shall not be obligated to make Base Rate Loans under Section 2.3
without prior notice of the proposed Borrowing to the Lenders, as follows:
(i) The amount of each Revolving Credit Lender's Revolving Credit
Proportionate Share of Revolving Loans shall be computed weekly (or more
frequently in the Payments Administrator's discretion) and shall be
adjusted upward or downward on the basis of the amount of outstanding
Revolving Loans as of 5:00 P.M. New York City time on the last Business
Day of the period specified by the Payments Administrator (such date,
the "Settlement Date"). The Payments Administrator shall deliver to each
of the Revolving Credit Lenders promptly after the Settlement Date a
summary statement of the amount of outstanding Revolving Loans for such
period. The Revolving Credit Lenders shall transfer to the Payments
Administrator, or, subject to Section 2.4(e), the Payments Administrator
shall transfer to the Revolving Credit Lenders, such amounts as are
necessary so that (after giving effect to all such transfers) the amount
of Revolving Loans made by each Revolving Credit Lender shall be equal
to such Revolving Credit Lender's Revolving Credit Proportionate Share
of the aggregate amount of Revolving
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Loans outstanding as of such Settlement Date. If the summary statement
is received by the Revolving Credit Lenders prior to 12:00 Noon New York
City time on any Business Day, each Revolving Credit Lender shall make
the transfers described above in immediately available funds no later
than 3:00 P.M. New York City time on the day such summary statement was
received; and if such summary statement is received by the Lenders after
12:00 Noon New York City time on such day, each Revolving Credit Lender
shall make such transfers no later than 3:00 P.M. New York City time on
the next succeeding Business Day. The obligation of each of the
Revolving Credit Lenders to transfer such funds shall be irrevocable and
unconditional and without recourse to or warranty by the Payments
Administrator. Each of the Payments Administrator and the Revolving
Credit Lenders agree to ▇▇▇▇ their respective books and records on the
Settlement Date to show at all times the dollar amount of their
respective Revolving Credit Proportionate Shares of the outstanding
Revolving Loans.
(ii) To the extent that the settlement described above shall not
yet have occurred, upon any repayment of Revolving Loans by the
Borrower, the Payments Administrator may apply such amounts repaid
directly to the amounts made available by the Payments Administrator
pursuant to this Section 2.4(b).
(iii) Because the Payments Administrator on behalf of the
Revolving Credit Lenders may be advancing and/or may be repaid Revolving
Loans prior to the time when the Revolving Credit Lenders will actually
advance and/or be repaid Revolving Loans, interest with respect to
Revolving Loans shall be allocated by the Payments Administrator to each
Revolving Credit Lender and the Payments Administrator in accordance
with the amount of Revolving Loans actually advanced by and repaid to
each Revolving Credit Lender and the Payments Administrator and shall
accrue from and including the date such Revolving Loans are so advanced
to but excluding the date such Revolving Loans are either repaid by the
Borrower in accordance with Section 2.5 or actually settled by the
applicable Lender as described in this Section 2.4(b).
(c) If a Lender (such Lender being hereinafter referred to as a
"Defaulting Lender") fails to make available to the Payments Administrator its
Term Loan Proportionate Share or Revolving Credit Proportionate Share, as
applicable, of any Loans (including Agent Advances) made available by the
Payments Administrator on such Lender's behalf, or fails to make available any
other amount owing by it to the Payments Administrator and the Payments
Administrator has made such amount available to the Borrower, the Payments
Administrator shall be entitled to recover such amount on demand from such
Defaulting Lender. If such Defaulting Lender does not pay such amount forthwith
upon the Payments Administrator's demand therefor, the Payments Administrator
shall promptly notify the Borrower and the Borrower shall promptly (but in any
event no later than five Business Days after such demand) pay such amount (to
the extent not paid by the Defaulting Lender) to the Payments Administrator. The
Payments Administrator shall also be entitled to recover from such Defaulting
Lender or the Borrower, as the case may be, (x) interest on such amount in
respect of each day from the date such corresponding amount was made available
by the Payments Administrator to the Borrower to the date such amount is
recovered by the Payments
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Administrator, at a rate per annum equal to either (i) if paid by such
Defaulting Lender, the overnight Federal Funds Rate or (ii) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 4.1 or Section 4.2 hereof, plus (y) in each case, an amount equal to any
costs (including reasonable legal expenses) and losses incurred as a result of
the failure of such Defaulting Lender to provide such amount as provided in this
Credit Agreement; provided, however, that the Payments Administrator shall not
be entitled to demand payment by the Borrower of any amount under clause (y)
above unless demand therefor has been made of the Defaulting Lender and not paid
within five Business Days of such demand. Nothing herein shall be deemed to
relieve any Lender from its duty to fulfill its obligations hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder, including, without limitation, the
right of the Borrower to seek reimbursement from any Defaulting Lender for any
amounts paid by the Borrower under clause (y) above on account of such
Defaulting Lender's default.
(d) The failure of any Lender to fund its Term Loan Proportionate
Share or Revolving Credit Proportionate Share, as applicable, of any Loan
(including Agent Advances) made by it as part of any Borrowing shall not relieve
any other Lender of its obligation, if any, hereunder to fund its Term Loan
Proportionate Share or Revolving Credit Proportionate Share, as applicable, of
such Loan on the date of such Borrowing, or relieve the Lender who failed to
make such amount available to subsequently repay such amount, or relieve any
Lender (including the Lender that failed to make such amount available) of its
obligation hereunder to make its ratable portion of any Borrowing available as
part of any subsequent Revolving Loans, but no Lender shall be responsible for
the failure of any other Lender to fund its Term Loan Proportionate Share or
Revolving Credit Proportionate Share, as applicable, of a Loan.
(e) Notwithstanding anything contained herein to the contrary, so
long as any Revolving Credit Lender is a Defaulting Lender or has rejected or
repudiated its Revolving Credit Commitment, the Payments Administrator shall not
be obligated to transfer to such Lender any payments made by the Borrower to the
Payments Administrator for the benefit of such Lender (excluding such payments
made in respect of the Term Loans); and such Lender shall not be entitled to the
sharing of any payments (excluding such payments made in respect of the Term
Loans) pursuant to Section 2.10. Amounts which would have been payable to such
Lender in the absence of the immediately preceding sentence shall instead be
paid to the Payments Administrator. The Payments Administrator may hold and, in
its discretion, re-lend to the Borrower the amount of all such payments received
by it for such Lender. For purposes of voting or consenting to matters with
respect to the Credit Documents, each Defaulting Lender shall be deemed not to
be a "Lender" and such Lender's Revolving Credit Commitment (and related
Outstandings) and Term Loan Outstandings, as applicable, shall be deemed to be
zero. This Section 2.4(e) shall remain effective with respect to such Defaulting
Lender until (x) the Obligations under this Credit Agreement shall have been
paid in full to the Payments Administrator and/or the Lenders other than the
Defaulting Lender or (y) the Required Lenders, the Payments Administrator and
the Borrower shall have waived such Defaulting Lender's default in writing. No
Commitment of any Lender shall be increased or otherwise affected, and
performance by the Borrower shall not be excused, by the operation of this
Section 2.4(e).
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2.5. Mandatory and Voluntary Payments: Mandatory and Voluntary
Reduction of Commitments.
(a) Amortization of Term Loans. In addition to any other
mandatory repayments or commitment reductions pursuant to this Section 2.5, on
each date set forth below, the Borrower shall be required to repay that
principal amount of Term Loans, to the extent then outstanding, as is set forth
opposite such date (each such repayment, a "Term Loan Scheduled Repayment", and
each such date, a "Term Loan Scheduled Repayment Date"):
Term Loan
Scheduled Repayment Date Amount
------------------------ ------
The last Business Day of
December, 1998 $150,000
The last Business Day of
March, 1999 $150,000
The last Business Day of
June, 1999 $150,000
The last Business Day of
September, 1999 $150,000
The last Business Day of
December, 1999 $150,000
The last Business Day of
March, 2000 $150,000
The last Business Day of
June, 2000 $150,000
The last Business Day of
September, 2000 $150,000
The last Business Day of
December, 2000 $150,000
The last Business Day of
March, 2001 $150,000
The last Business Day of
June, 2001 $150,000
The last Business Day of
September, 2001 $150,000
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The last Business Day of
December, 2001 $150,000
The last Business Day of
March, 2002 $150,000
The last Business Day of
June, 2002 $4,455,000
The last Business Day of
September, 2002 $4,455,000
The last Business Day of
December, 2002 $4,455,000
The last Business Day of
March, 2003 $4,455,000
The last Business Day of
June, 2003 $4,455,000
The last Business Day of
September, 2003 $4,455,000
The last Business Day of
December, 2003 $4,455,000
The last Business Day of
March, 2004 $4,455,000
The last Business Day of
June, 2004 $4,455,000
The last Business Day of
September, 2004 $4,455,000
The last Business Day of
December, 2004 $4,455,000
The last Business Day of
March, 2005 $4,455,000
Term Loan Maturity Date $4,440,000
(b) Voluntary Prepayment of Term Loans. Subject to Section 2.5(c)
and the last sentence of this Section 2.5(b), upon not less than one Business
Day's prior written notice to the Administrative Agent (which the Administrative
Agent shall promptly transmit to each Term
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Loan Lender), the Borrower may prepay all or any portion of the Term Loan
Outstandings, provided that, in the case of Term Loans constituting Eurodollar
Rate Loans, any payment required to be made pursuant to Section 4.5(b) as a
result of such prepayments shall have been, or shall concurrently therewith be,
made. Unless the aggregate Term Loan Outstandings are to be prepaid in full,
voluntary prepayments of the Term Loans shall be in an aggregate minimum amount
of $1,000,000 and in increments of $500,000 in excess of such amount. Each
voluntary prepayment shall be applied to the unpaid installments of the Term
Loans in the inverse order of maturity and shall permanently reduce the Term
Loan Outstandings of each Term Loan Lender ratably in accordance with its Term
Loan Proportionate Share. Any notice of prepayment given to the Administrative
Agent under this Section 2.5(b) shall specify the date (which shall be a
Business Day) of prepayment, the aggregate principal amount of the prepayment
and any allocation of such amount among Base Rate Loans and Eurodollar Rate
Loans. When notice of prepayment is delivered as provided herein, the principal
amount of the Term Loans specified in the notice shall become due and payable on
the prepayment date specified in such notice. Notwithstanding anything to the
contrary contained above, unless the Required Lenders otherwise specifically
consent in writing thereto (or the Revolving Credit Termination Date has
occurred or will occur concurrently with such prepayment), no voluntary
prepayment of Term Loans may be made pursuant to this Section 2.5(b) unless,
after giving effect thereto, the Borrower shall be able to incur additional
Outstandings of $70,000,000 or more in compliance with the Total Commitments and
the Borrowing Base and Senior Unsecured Notes Borrowing Base restrictions as
then in effect; provided that to the extent Holdings receives net cash proceeds
from issuances of Holdings Common Stock and/or Permitted Preferred Stock issued
in accordance with the requirements of Section 8.13(a), then, at the option of
Holdings and the Borrower, (x) such net cash proceeds may be used, within three
Business Days after Holdings' receipt thereof, to voluntarily prepay outstanding
principal of Term Loans in accordance with the provisions of this Section 2.5(b)
(except that the requirements set forth above in this sentence (before the
proviso) shall not be applicable) and (y) if the Borrower certifies in writing
to the Administrative Agent, within three Business Days of Holdings' receipt of
such net cash proceeds, that the Borrower would like to establish (or increase,
as the case may be) the Equity Blocked Commitment by an amount (to be specified
in such writing) not to exceed the amount of net cash proceeds so received (and
not being applied pursuant to preceding clause (x)), then the amount so
specified shall be added to the Equity Blocked Commitment (provided that a like
amount of such net cash proceeds shall have been applied towards the repayment
of Revolving Loans (to the extent then outstanding)), and the proceeds of any
Revolving Loans thereafter incurred (which must be incurred within 90 days after
the respective establishment of or increase to the Equity Blocked Commitment)
which reduce the amount of the Equity Blocked Commitment shall be permitted to
be used (at the time of the incurrence thereof) to make voluntary prepayments of
outstanding Term Loans pursuant to the requirements of this Section 2.5(b)
(other than the requirements set forth above in this sentence (before the
proviso)) or for any other use permitted hereunder in accordance with the
applicable terms and subject to the applicable conditions set forth herein.
(c) Premium Relating to Prepayment of Term Loans. The voluntary
and mandatory prepayments of the Term Loans described in this Section 2.5 may be
made without premium or penalty (subject to the payment of any amounts owing
pursuant to Section 4.5(b));
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provided, however, that if the Borrower voluntarily or mandatorily prepays or
repays all or any portion of the Term Loans on or prior to the second
anniversary of the Restatement Effective Date, the Borrower shall pay a
prepayment premium to the Administrative Agent, for the benefit of the Term Loan
Lenders whose Term Loan Outstandings are being prepaid or repaid, on the date of
such prepayment or repayment in an amount equal to (i) two percent (2.00%) of
the principal amount so prepaid or repaid, if such prepayment or repayment is
made on or prior to the first anniversary of the Restatement Effective Date or
(ii) one percent (1.00%) of the principal amount so prepaid or repaid, if such
prepayment or repayment is made after such first anniversary and on or prior to
the second anniversary of the Restatement Effective Date, provided, however, no
such prepayment premium shall be payable by the Borrower in connection with any
mandatory prepayments or repayments of Term Loans under Section 2.5(a) or
Section 2.5(k).
(d) No Readvance of Term Loans. Any repayment or prepayment of
all or any portion of the principal amount of the Term Loans shall constitute a
permanent reduction in the Term Loan Outstandings and may not be readvanced to
the Borrower.
(e) Mandatory Payment of Revolving Loans. Revolving Loans shall
be due and payable without any demand at any time that the aggregate balance of
Revolving Loans and all Letter of Credit Obligations outstanding at such time
exceeds the least of the Borrowing Base then in effect, the Senior Unsecured
Notes Borrowing Base then in effect and the Total Available Commitments then in
effect, in the amount of such excess, provided, that (i) no such payment shall
be required pursuant to the foregoing clause as a result of a Borrowing Base
Deficiency during an Agent Advance Period (although to the extent there exists a
Senior Unsecured Notes Borrowing Base Deficiency or an excess over the Total
Available Commitments then in effect, each such payment shall be required to be
made immediately and whether or not an Agent Advance Period is in existence) and
(ii) if the then aggregate outstanding principal amount of Revolving Loans is
less than such excess (it being understood and agreed that such excess shall be
(x) calculated after giving effect to the foregoing clause (i) and (y) only to
the extent that such excess is attributable to the lesser of the Borrowing Base
then in effect and the Total Available Commitments then in effect and shall not
include any portion thereof to the extent attributable solely to the Senior
Unsecured Notes Borrowing Base then in effect), Letters of Credit will be
required to be cash collateralized (to the satisfaction of the Collateral Agent)
in the amount of such difference.
(f) Termination of Commitments.
(i) On the Revolving Credit Expiration Date, the Total
Commitments (and the Revolving Credit Commitment of each Revolving
Credit Lender) shall automatically reduce to zero and all outstanding
Revolving Loans shall be repaid in full.
(ii) The Total Commitments (and the Revolving Credit Commitment
of each Lender) and the Total Term Loan Commitments (and the Term Loan
Commitment of each Lender) shall terminate on September 30, 1998, unless
the Restatement Effective Date shall have occurred on or before such
date. Furthermore, on the Restatement
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Effective Date (and after giving effect to the making of the Term Loans
on such date), the Total Term Loan Commitments (and the Term Loan
Commitment of each Lender) shall terminate.
(g) Voluntary Prepayment of Revolving Loans. In addition to the
transfers and distributions of funds required pursuant to Section 2.6, the
Borrower shall have the right to prepay the Revolving Loans, without premium or
penalty, in whole or in part at any time and from time to time on the following
terms and conditions: (i) the Borrower shall give the Administrative Agent prior
to 12:00 Noon (New York City time) (x) at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Base Rate Loans and (y) at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Eurodollar Rate Loans, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Rate Loans, the specific
Borrowing or Borrowings pursuant to which made, which notice the Administrative
Agent shall promptly transmit to each of the Lenders; and (ii) prepayments of
Eurodollar Rate Loans made on a day other than the last day of an Interest
Period applicable thereto shall be accompanied by any amounts owing pursuant to
Section 4.5(b).
(h) Apportionment and Application of Payments and Reductions to
Total Commitments.
(i) With respect to each repayment of Loans pursuant to this
Section 2.5, the Borrower may designate the Types of Loans which are to
be repaid and the specific Borrowing(s) pursuant to which made;
provided, that (i) if Eurodollar Rate Loans are repaid on a day that is
other than the last day of an Interest Period applicable thereto, such
repayment shall be accompanied by any amounts owing pursuant to Section
4.5(b); (ii) if any partial prepayment of Eurodollar Rate Loans made
pursuant to any Borrowing shall reduce the outstanding Eurodollar Rate
Loans made pursuant to such Borrowing to an amount less than $1,000,000,
then such Borrowing may not be continued as a Borrowing of Eurodollar
Rate Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall, except as
provided in Section 2.4(e) and (in the case of Term Loans) subject to
the provisions of Section 2.5(m), be applied pro rata among the Lenders
which made such Loans. If the Borrower is required to repay any
Eurodollar Rate Loans as a result of the application of Section 2.5(j)
or (k) and such prepayment will result in the Borrower being required to
pay breakage costs under Section 4.5(b) (any such Eurodollar Rate Loans,
"Affected Loans"), the Borrower may elect, by written notice to the
Administrative Agent, to have the provisions of the following sentence
be applicable. At the time any Affected Loans are otherwise required to
be prepaid the Borrower may elect to deposit 100% (or such lesser
percentage elected by the Borrower as not being immediately repaid) of
the principal amounts that otherwise would have been paid in respect of
the Affected Loans with the Administrative Agent to be held as security
for the obligations of the Borrower hereunder for a period not to exceed
60 days pursuant to a cash collateral agreement to be entered into in
form and substance satisfactory to the Administrative Agent, with such
cash collateral to be released from
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such cash collateral account (and applied to repay the principal amount
of such Eurodollar Rate Loans) upon each occurrence thereafter of the
last day of an Interest Period applicable to Eurodollar Rate Loans of
the respective Tranche (or such earlier date or dates as shall be
requested by the Borrower), with the amount to be so released and
applied on the last day of each Interest Period to be the amount of such
Eurodollar Rate Loans (excluding any such Eurodollar Rate Loans which
are Term Loans to the extent the respective Term Loan Lenders have
waived their rights to receive such payments in accordance with the
provisions of Section 2.5(m)) to which such Interest Period applies (or,
if less, the amount remaining in such cash collateral account); provided
that on the 90th day after the deposit thereof, any amount remaining
from the respective deposit pursuant to the cash collateral account
shall be applied to repay outstanding Loans of the respective Tranche
which would otherwise have been repaid in the absence of this sentence.
In the absence of a designation by the Borrower as described in the
first sentence of this clause (h)(i), each repayment of Loans pursuant
to Section 2.5 shall be applied first to the payment of Base Rate Loans
of the respective Tranche required to be repaid and second to the
payment of Eurodollar Rate Loans of the respective Tranche required to
be repaid in the order of the Interest Periods applicable thereto
soonest to end. If there is more than one Eurodollar Rate Loan maturing
on any one date, then, in the absence of contrary instructions from the
Borrower, (i) if such Eurodollar Rate Loans bear interest at different
rates, payment shall be applied to the Eurodollar Rate Loans bearing the
higher rate of interest and (ii) if such Eurodollar Rate Loans bear
interest at the same interest rate, payment shall be applied to
whichever Eurodollar Rate Loan the Administrative Agent shall select in
its sole discretion. Notwithstanding anything to the contrary contained
above, if any prepayment of Term Loans is at any time made pursuant to
Section 2.5(j) or (k) in circumstances where one or more of the Term
Loan Lenders has, pursuant to the provisions of Section 2.5(m), waived
its right to receive its share of the respective prepayments of
outstanding Term Loans, then the prepayments of outstanding Term Loans
that are made to the other Term Loan Lenders shall in each case be
applied as a mandatory reduction of the Total Commitments.
(ii) Any reduction to the Total Commitments pursuant to this
Section 2.5 shall reduce the Revolving Credit Commitment of each of the
Revolving Credit Lenders pro rata (based on the relative sizes of the
Revolving Credit Commitments of the various Revolving Credit Lenders)
and (ii) any prepayment of Term Loans pursuant to this Section 2.5
(excluding Section 2.5(a) hereof) shall be applied to the unpaid
installments of the Term Loans pro rata among such installments and
shall permanently reduce the Term Loan Outstandings of each Term Loan
Lender ratably in accordance with its Term Loan Proportionate Share
(except to the extent the respective Term Loan Lender declined its share
of any mandatory repayment in accordance with the provisions of Section
2.5(m)).
(i) Voluntary Reduction of Revolving Credit Commitments. The
Borrower may reduce or terminate the unutilized Total Commitments at any time
and from time to time in whole or in part upon at least three Business Days'
prior written notice to the Administrative Agent; provided, however, that each
such reduction must be in an amount not less than $250,000
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(and in increments of $100,000 thereafter); and provided further, that (i) if
the Borrower seeks to reduce the Total Commitments to an amount less than
$10,000,000, then the Total Commitments shall be reduced to zero and the Credit
Agreement shall be terminated and (ii) once reduced, the amount of any such
reductions in the Total Commitments may not be reinstated.
(j) Mandatory Commitment Reductions and Prepayments Relating to
Issuances of Debt. In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 2.5, on the date of the receipt thereof by
Holdings, the Borrower or any of their respective Subsidiaries, an amount equal
to 100% of the cash proceeds (net of all investment banking fees, legal fees,
consulting fees, underwriting discounts and commissions and other reasonable
costs associated therewith) of the incurrence of Indebtedness by Holdings, the
Borrower or any of their respective direct or indirect Subsidiaries (other than
(i) Indebtedness incurred pursuant to the Financing Transactions or (ii)
Indebtedness permitted to be incurred by Section 8.3 as in effect on the
Restatement Effective Date) shall be applied ratably, subject to the provisions
of Section 2.5(m), as a mandatory reduction to the Total Commitments (with the
amount to be applied to reduce the Total Commitments to be equal to the
Revolving Credit Percentage of the amount required to be applied pursuant to
this clause (j)) and to mandatorily prepay principal of then outstanding Term
Loans (in an amount equal to the Term Loan Percentage of the amount to be
applied pursuant to this Section 2.5(j)), provided that, at any time while any
Term Loans remain outstanding hereunder, at the option of the Borrower, any
amount required to be applied pursuant to this Section 2.5(j) may instead be
applied (without being subject to the provisions of Section 2.5(m)) first, to
the mandatory prepayment of principal of Term Loans then outstanding and second,
to the extent in excess thereof, as a mandatory reduction to the Total
Commitments.
(k) Mandatory Prepayments Relating to Asset Sales. In addition to
any other mandatory repayments or commitment reductions pursuant to this Section
2.5, on each date after the Restatement Effective Date upon which Holdings, the
Borrower or any of their respective Subsidiaries receives Net Sale Proceeds from
any Asset Sale (including capital stock and securities held thereby and all
assets sold as part of Permitted Sale-Leaseback Transactions (other than as
explicitly set forth in clause (iv) below), but excluding (i) Asset Sales so
long as, and to the extent that, the aggregate amount of Net Sale Proceeds from
all Asset Sales excluded pursuant to this clause (i) during the respective
fiscal year of the Borrower in which the Net Sale Proceeds are received does not
exceed $1,000,000, (ii) sales of Rental Equipment in the ordinary course of
business and consistent with past practices, (iii) sales or other dispositions
of assets which do not constitute Collateral, (iv) sales of assets as part of
Permitted Sale-Leaseback Transactions consummated after the 60th day following
the Original Effective Date and (v) sales of real property under clauses (v),
(vi) and (vii) of Section 8.1(m), in each case to the extent that the Borrower
has delivered a certificate to the Administrative Agent on or prior to such date
stating that it intends to reinvest the Net Sale Proceeds therefrom in
Inventory, replacement equipment, Rental Equipment, or property, plant and
equipment as the case may be, within 180 days after the respective date of sale
or disposition or, in lieu thereof, commit to so invest such Net Sale Proceeds
within 180 days after such date of sale and actually expend the funds pursuant
to such commitment within 365 days after such date of sale or disposition), an
amount equal to 100% of the Net Sale Proceeds from such Asset Sale shall be
applied ratably, subject to the
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provisions of Section 2.5(m), as a mandatory reduction to the Total Commitments
(with the amount to be applied to reduce the Total Commitments to be equal to
the Revolving Credit Percentage of the amount required to be applied pursuant to
this clause (k)) and to mandatorily prepay principal of then outstanding Term
Loans (in an amount equal to the Term Loan Percentage of the amount to be
applied pursuant to this Section 2.5(k)), provided that to the extent that such
Asset Sale relates to Eligible Rental Equipment (other than Rental Equipment
described in clause (ii) above), such amount shall be applied as a mandatory
reduction to the Total Commitments and no portion thereof shall be applied to
mandatorily prepay principal of then outstanding Term Loans; provided, further,
that to the extent any Net Sale Proceeds are not required to be applied pursuant
to this Section 2.5(k) as a result of clause (iv) contained in the parenthetical
above, then (x) on the 180th day after the date of the respective sale or
disposition, the Net Sale Proceeds of the respective sale or disposition shall
be applied as otherwise required by this Section 2.5(k) to the extent not
actually used or committed to be used as contemplated by said clause (iv) by
such 180th day and (y) on the 365th day after the date of the respective sale or
disposition, any Net Sale Proceeds of the respective sale or disposition shall
be applied as otherwise required by this Section 2.5(k) to the extent same were
committed to be used within 180 days after the respective date of sale or other
disposition but were not in fact used by such 365th day as contemplated by said
clause (iv).
(l) Change of Control. Upon the date occurring 15 days after any
occurrence of a Change of Control, (x) unless the Required Lenders otherwise
consent in writing, the Total Commitments shall automatically be reduced to zero
and (y) unless the Majority Term Loan Lenders otherwise consent in writing, the
outstanding principal amount of all Term Loans shall be required to be prepaid
in full.
(m) Special Application Provisions Regarding Term Loans. So long
as any Term Loans remain outstanding, any amounts required to be applied as
mandatory repayments to the Term Loans pursuant to Section 2.5(j) (exclusive of
amounts applied pursuant to the proviso thereto) and 2.5(k) shall be deposited
with the Administrative Agent on the date the respective payment is otherwise
required to be made and, unless the Borrower has already furnished the
Administrative Agent at least three Business Days' prior written notice of the
respective prepayment and amount thereof, the Administrative Agent shall not
apply such amount to repay outstanding Term Loans until the third Business Day
after its receipt of such amounts. Prior thereto, the Administrative Agent shall
give each Term Loan Lender notice of the amount of the respective repayment to
be made to its Term Loans pursuant to the provisions of said Section 2.5(j)
(unless the payment is to be made pursuant to the proviso thereto) or 2.5(k), as
the case may be. Such amount shall be applied to repay the outstanding Term
Loans of the various Term Loan Lenders in accordance with the provisions of this
Section 2.5 on the date of receipt of such payment (if at least three Business
Days' notice had previously been given to the Term Loan Lenders of such
prepayment by the Borrower) or on the third Business Day after the
Administrative Agent's receipt thereof; provided that, by written notice of any
Term Loan Lender delivered to the Administrative Agent at least one Business Day
before the date the respective repayment is actually applied to outstanding Term
Loans, any Term Loan Lender may decline to receive its share of the amount which
would otherwise have been applied to its outstanding Term Loans, in which case
such declined amount shall instead be applied as a
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mandatory reduction of the Total Commitments.
2.6. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 1:00 P.M. New York City
time on the day when due in Dollars to the Payments Administrator at its Payment
Office in immediately available funds. The Borrower's obligations to the Lenders
with respect to such payments shall be discharged by making such payments to the
Payments Administrator pursuant to this Section 2.6. The Borrower's obligations
to the Lenders with respect to such payments shall be discharged by making such
payments to the Payments Administrator pursuant to this Section 2.6 or, in the
case of payments of interest, Fees and Expenses relating to the Outstandings and
if such payments are not received prior to the foregoing deadline, by the
Payments Administrator's adding such payments to the principal amount of the
Revolving Loans outstanding (if additional Revolving Loans are then permitted to
be incurred) by charging such payments to the Borrower's Revolving Loan account
(which charge shall constitute an incurrence of Revolving Loans (that are Base
Rate Loans) in an aggregate principal amount equal to the amount so charged).
(b) (i) The Borrower and each of its Subsidiaries shall each,
along with the Collateral Agent and financial institutions selected by the
Borrower and acceptable to the Administrative Agent (the "Collection Banks"),
enter into and maintain an agreement substantially in the form of Exhibit C-1
(as modified, amended or supplemented from time to time in accordance with the
terms hereof and thereof the "Collection Bank Agreement"). The Borrower and each
of its Subsidiaries shall instruct all account debtors on the Accounts of the
Borrower or such Subsidiary, as the case may be, to remit all payments to the
applicable "P.O. Boxes" or "Lockbox Addresses" (as defined in the applicable
Collection Bank Agreement) which remittances shall be collected by the
applicable Collection Bank and deposited in the applicable Collection Account.
All amounts received by the Borrower and each of its Subsidiaries from any
account debtor, in addition to all other cash received from any other source,
shall, subject to the requirements of Sections 8.15 and 8.16, upon receipt be
deposited into a Collection Account. Notwithstanding anything to the contrary
contained above, (i) the Canadian Subsidiary (and the accounts established by
the Canadian Subsidiary in accordance with the applicable requirements of the
last sentence of Section 8.16) shall not be subject to the foregoing
requirements, provided that at such time, if any, as the Canadian Subsidiary
becomes a Subsidiary Guarantor, the Canadian Subsidiary shall take all actions
as may be requested by the Collateral Agent to establish one or more lock box
accounts as otherwise contemplated above (over which the Collateral Agent shall
have full dominion and control), except that such lock box accounts shall not be
required to be swept into Collection Accounts as otherwise contemplated herein
and (ii) SMI (and the accounts established by SMI in accordance with the
applicable requirements of the last sentence of Section 8.16) shall not be
subject to the foregoing requirements until the 150th day after the Restatement
Effective Date, provided that (x) SMI shall at all times be subject to and in
compliance with the Fleet Collection Bank Agreement and (y) Fleet Bank, N.A.
shall have duly executed and delivered an agreement (the "Fleet Collection
Agreement Acknowledgment") for the benefit of the Administrative Agent and the
Lenders, in form and substance satisfactory to the Agents and the Required
Lenders, pursuant to which Fleet Bank, N.A. agrees that the Fleet Collection
Account is subject to the security interests created in favor of the
Administrative Agent and the Lenders and further agrees to comply with any and
all
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instructions originated by the Administrative Agent with respect the Fleet
Collection Account (and all amounts deposited therein) without further consent
by SMI and not to comply with instructions regarding such Fleet Collection
Account (and all amounts deposited therein) originated by any other Person other
than a court of competent jurisdiction.
(ii) The Borrower and its Subsidiaries may close Collection
Accounts and/or open new Collection Accounts with the prior written consent of
the Collateral Agent and subject to prior execution and delivery to the
Collateral Agent of Collection Bank Agreements consistent with the provisions of
this Section 2.6 and in form and substance satisfactory to the Administrative
Agent.
(c) Upon the terms and subject to the conditions set forth in the
Collection Bank Agreements, all available amounts held in the Collection
Accounts shall be wired each Business Day into an account (the "Concentration
Account") established pursuant to a concentration account agreement entered into
among the Borrower, the Collateral Agent and BTCo substantially in the form of
Exhibit C-2 (the "Concentration Account Agreement"). Subject to the terms and
conditions of the Concentration Account Agreement, all available funds in the
Concentration Account shall be transferred on every Business Day to an account
(the "BT Account") maintained by the Collateral Agent at BTCo.
(d) All available amounts held in the BT Account shall be
distributed and applied on a daily basis in the following order (in each case,
to the extent the Administrative Agent has actual knowledge of the amounts owing
or outstanding as described below): first, to the payment of any Fees, Expenses
or other Obligations due and payable to the Administrative Agent or the
Collateral Agent under any of the Credit Documents, including amounts advanced
by the Payments Administrator on behalf of the Lenders pursuant to Section 2.3
or 2.4(b); second, to the payment of any Fees, Expenses or other Obligations due
and payable to the Issuing Bank under any of the Credit Documents; third, to the
ratable payment of interest due on the Revolving Loans and Letter of Credit
Obligations and any Fees or other regularly accruing fees due and payable to the
Revolving Credit Lenders (in their capacities as such) under any of the Credit
Documents; fourth, to the ratable payment of principal due on the Revolving
Loans and reimbursement obligations due to the Revolving Credit Lenders relating
to outstanding Letter of Credit Obligations; fifth, to the ratable payment of
any other Obligations due and payable to the Revolving Credit Lenders (in their
capacities as such) under any of the Credit Documents; sixth, to the ratable
payment of any then due and owing Obligations arising under any Interest Rate
Agreement entered into by the Borrower in accordance with Section 8.3(g);
seventh, to the ratable payment of interest due on the Term Loans and any Fees
or other regularly accruing fees due and payable to the Term Loan Lenders (in
their capacities as such) under any of the Credit Documents; eighth, to the
ratable payment of principal due on the Term Loans; ninth, to the ratable
payment of any other Obligations due and payable to the Term Loan Lenders (in
their capacities as such) under any of the Credit Documents; and tenth, to the
ratable payment of principal (not otherwise due or payable) on the Revolving
Loans.
2.7. Maintenance of Account. The Payments Administrator shall
maintain an account on its books in the name of the Borrower in which the
Borrower will be charged with all
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loans and advances made by the Lenders to the Borrower pursuant to the Revolving
Credit Commitments or for the Borrower's account, including the Revolving Loans,
the Letter of Credit Obligations, and the Fees, Expenses and any other
Obligations relating thereto. The Borrower will be credited, in accordance with
Section 2.6 above, with all amounts received by the Lenders from the Borrower or
from others for the Borrower's account, including, as set forth above, all
amounts received by the Payments Administrator in payment of Accounts and
applied to the Obligations. In no event shall prior recourse to any Accounts or
other Collateral be a prerequisite to the Payments Administrator's right to
demand payment of any Obligation upon its maturity. Further, the Payments
Administrator shall have no obligation whatsoever to perform in any respect any
of the Borrower's contracts or obligations relating to the Accounts.
2.8. Statement of Account. After the end of each month the
Payments Administrator shall send the Borrower a statement accounting for the
charges, loans, advances and other transactions occurring among and between the
Administrative Agent, the Revolving Credit Lenders, the Issuing Bank and the
Borrower during that month. The monthly statements shall, absent manifest error,
be an account stated, which is final, conclusive and binding on the Borrower.
2.9. Taxes. (a) All payments made by the Borrower hereunder,
under any Note, or under any other Credit Document will be made without setoff,
counterclaim or other defense. Except as provided in Section 2.9(b), all such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of the
Administrative Agent or a Lender pursuant to the laws of the jurisdiction in
which the Administrative Agent or such Lender, as the case may be, is organized
or the jurisdiction in which the principal office of the Lender or
Administrative Agent or Applicable Lending Office of such Lender is located or
any subdivision or taxing authority thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, deductions, withholdings, charges,
assessments or other liabilities being referred to collectively as "Taxes"). If
any Taxes are so levied or imposed, the Borrower agrees to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due hereunder, under any Note, or under any other Credit
Document, after withholding or deduction for or on account of any Taxes, will
not be less than the amount provided for herein or in such Note or such other
Credit Document. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or net profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or incorporated or in which the principal office
or Applicable Lending Office of such Lender is located or of any political
subdivision or taxing authority thereof or therein and for any withholding of
income or similar taxes as such Lender shall determine are payable by, or
withheld from, such Lender in respect of such amounts so paid to or on behalf of
such Lender pursuant to this or the preceding sentence. The Borrower will
furnish to the Payments Administrator within 45 days after the date
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the payment of any Taxes, or any withholding or deduction on account thereof, is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower will indemnify and hold harmless the
Administrative Agent and each Lender, and reimburse the Administrative Agent or
such Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid or withheld by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Original Effective Date (or the Restatement Effective Date in the
case of such Lenders that first become party hereto on the Restatement Effective
Date), or in the case of a Lender that is an assignee or transferee of an
interest under this Credit Agreement pursuant to Section 11.6 (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i)(x) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Credit Agreement and under any
Note and (y) Internal Revenue Service Form W-9, or (ii) if the Lender is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit D (any such certificate,
a "Section 2.9(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments of interest to be
made under this Credit Agreement and under any Note. In addition, each Lender
agrees that from time to time after the Restatement Effective Date, when a lapse
in time or change in circumstances renders the previous certification obsolete
or inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section 2.9(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Credit Agreement and any Note, or it shall immediately
notify the Borrower and the Administrative Agent of its inability to deliver any
such Form or Certificate, in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 2.9(b).
Notwithstanding anything to the contrary contained in Section 2.9(a), but
subject to Section 11.6 and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.9(a) to make any
additional payments to a Lender pursuant to the third and fourth sentences of
Section 2.9(a) (the "Gross-Up Payments") (i) if such Lender has not provided to
the Borrower the Internal
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Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 2.9(b) or (ii) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 2.9 and except as set forth in Section 11.6, the Borrower agrees to
pay additional amounts and to indemnify each Lender in the manner set forth in
Section 2.9(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes after
the Original Effective Date (or the Restatement Effective Date in the case of
Lenders which first become party to this Credit Agreement on or after the
Restatement Effective Date) in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this Section
2.9 to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that the Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
2.10. Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of (x) the Revolving Loans made by it or its participation
in Letters of Credit in excess of its Revolving Credit Proportionate Share of
payments on account of the Revolving Loans or Letters of Credit obtained by all
the Lenders (other than any Lender that has waived its share in writing), or
interest thereon, such Lender shall forthwith purchase from the other Revolving
Credit Lenders, such participation in the Revolving Loans made by them or in
their participation in Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them, or (y)
the Term Loans made by it in excess of its Term Loan Proportionate Share of
payments on account of the Term Loans obtained by all the Lenders (other than
any Lender that has waived its share in writing or pursuant to Section 2.5(m)),
or interest thereon, such Lender shall forthwith purchase from the other Term
Loan Lenders such participation in the Term Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that, in the case of preceding clause (x)
or (y), if all or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each Lender (with Obligations of
the respective Tranche) shall be rescinded and each such Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect to the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10 may, to the fullest extent permitted by
law, exercise all of its rights of payment (including
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the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
ARTICLE 3.
Letters of Credit
3.1. Issuance of Letters of Credit. Subject to the terms and
conditions of this Credit Agreement and in reliance upon the representations and
warranties of the Borrower set forth herein, upon the request of the Borrower
pursuant to Section 3.4, the Issuing Bank shall issue Letters of Credit
hereunder and for the Borrower's account, as more specifically described below.
On the Restatement Effective Date, all Original Letters of Credit shall be
deemed to have been issued under this Credit Agreement and shall for all
purposes constitute "Letters of Credit" hereunder. The Issuing Bank shall not be
obligated to issue any Letter of Credit for the account of the Borrower if at
the time of such requested issuance:
(a) The face amount of such requested Letter of Credit when added
to the Letter of Credit Obligations then outstanding, would (i) cause the Letter
of Credit Obligations to exceed $12,500,000, (ii) when added to the aggregate
amount of Revolving Loans (including Agent Advances) then outstanding would
exceed the least of (A) the Total Available Commitments then in effect, (B) the
Borrowing Base then in effect and (C) the Senior Unsecured Notes Borrowing Base
then in effect;
(b) Any order, judgment or decree of any Governmental Authority
or arbitrator shall purport by its terms to enjoin or restrain the Issuing Bank
from issuing such Letter of Credit or any Requirement of Law applicable to the
Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit, or request the Issuing Bank to refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated) not in effect as of the Restatement Effective Date, or
any unreimbursed loss, cost or expense which was not applicable, in effect or
known to the Issuing Bank as of the Restatement Effective Date and which the
Issuing Bank deems in good faith to be material to it; or
(c) A default of any Revolving Credit Lender's obligations to
fund under Section 3.6 exists, or such Revolving Credit Lender is a Defaulting
Lender under Section 2.4(c), or any Revolving Credit Lender has rejected or
repudiated its obligations in respect of Letters of Credit, unless the
Administrative Agent and the Issuing Bank have entered into satisfactory
arrangements with the Borrower to eliminate the Issuing Bank's risk with respect
to such Revolving Credit Lender, including cash collateralization of such
Revolving Credit Lender's Revolving Credit Proportionate Share of the Letter of
Credit Obligations.
3.2. Terms of Letters of Credit. The Letters of Credit shall be
in a form customarily issued by the Issuing Bank or in such other form as has
been approved by the Issuing
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Bank. Each Letter of Credit shall be denominated in Dollars. At the time of
issuance, the amount and the terms and conditions of each Letter of Credit, and
the form of any drafts or acceptances thereunder, shall be subject to approval
by the Administrative Agent and the Borrower. In no event may the term of any
standby Letter of Credit issued hereunder exceed 12 months (except that such
Letters of Credit may provide for annual renewal) nor the term of any
documentary Letter of Credit exceed 180 days, and all Letters of Credit issued
hereunder shall expire no later than the date that is five Business Days prior
to the Revolving Credit Expiration Date. Any Letter of Credit containing an
automatic renewal provision shall also contain a provision pursuant to which,
notwithstanding any other provisions thereof, it shall expire no later than the
date that is five Business Days prior to the Revolving Credit Expiration Date.
3.3. Revolving Credit Lenders' Participation. Immediately upon
the issuance or amendment by the Issuing Bank of any Letter of Credit in
accordance with the procedures set forth in Section 3.1, each Revolving Credit
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation to the extent of such Revolving Credit Lender's
Revolving Credit Proportionate Share (based upon its Revolving Credit
Commitment) of the liability with respect to such Letter of Credit (including,
without limitation, all obligations of the Borrower with respect thereto, other
than amounts owing to the Issuing Bank consisting of Issuing Bank Fees) and any
security therefor or guaranty pertaining thereto.
3.4. Notice of Issuance. Whenever the Borrower desires the
issuance of a Letter of Credit, the Borrower shall deliver to the Payments
Administrator and the Issuing Bank a written notice no later than 1:00 P.M. New
York City time at least three Business Days (or such shorter period as may be
agreed to by the Issuing Bank) in advance of the proposed date of issuance of a
letter of credit request in substantially the form attached as Exhibit B-2 (a
"Letter of Credit Request"). The Payments Administrator shall promptly transmit
copies of each Letter of Credit Request to each Revolving Credit Lender. The
transmittal by the Borrower of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that the Letter of Credit may
be issued in accordance with and will not violate any of the requirements of
Section 3.1 or 5.2. A Letter of Credit Request may be given in writing or
electronically with prompt confirmation in writing.
3.5. Payment of Amount Drawn Under Letters of Credit. In the
event of any request for drawing under any Letter of Credit by the beneficiary
thereof, the Issuing Bank shall notify the Payments Administrator, which shall
notify the Borrower of such request, to the extent reasonably practicable not
later than 11:00 A.M. on the Business Day immediately prior to the date on which
the Issuing Bank intends to honor such drawing. The Borrower shall give notice
to be received by the Payments Administrator and the Issuing Bank not later than
1:00 P.M. on the Business Day immediately prior to the date of the respective
drawing if it intends to reimburse the Issuing Bank for the amount of such
drawing with funds other than the proceeds of Revolving Loans. Such notice from
the Borrower shall be irrevocable and, if given, the Borrower shall reimburse
the Issuing Bank not later than the close of business New York City time on the
day on which such drawing is honored in an amount in same day funds equal to the
amount of such drawing. If the Payments Administrator shall not have timely
received such
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notice (i) the Borrower shall be deemed to have timely given a Notice of
Borrowing to the Payments Administrator to incur Revolving Loans, which shall be
made as Base Rate Loans, on the date on which such drawing is honored in an
amount equal to the amount of such drawing and (ii) subject to satisfaction or
waiver of the conditions specified in Section 5.2 hereof and the other terms and
conditions of Borrowings contained herein, the Revolving Credit Lenders shall,
on the date of such drawing, make Revolving Loans in the amount of such drawing,
the proceeds of which shall be applied directly by the Payments Administrator to
reimburse the Issuing Bank for the amount of such drawing or payment. Borrowings
pursuant to this Section 3.5 shall not be subject to the minimum amount
requirement of Section 2.3(a)(iii). If for any reason, proceeds of Revolving
Loans are not received by the Issuing Bank on such date in an amount equal to
the amount of such drawing, the Borrower shall be obligated to and shall
reimburse the Issuing Bank, on the Business Day immediately following the date
of such drawing, in an amount in same day funds equal to the excess of the
amount of such drawing over the amount of such Revolving Loans, if any, which
are so received, plus accrued interest on such amount at the rate set forth in
Section 4.2; provided, however, that any such payments shall not prejudice any
rights that the Borrower may have against any Revolving Credit Lender as a
result of any default by such Revolving Credit Lender in funding such Revolving
Loans, as provided in the final sentence of Section 2.4(c).
3.6. Payment by Revolving Credit Lenders. (a) In the event that
the Borrower does not reimburse the Issuing Bank for the amount of any drawing
pursuant to Section 3.5 and the proceeds of Revolving Loans incurred for such
purpose are insufficient for such purpose, the Payments Administrator shall
promptly notify each Revolving Credit Lender of the unreimbursed amount and of
such Revolving Credit Lender's respective participation therein. Each Revolving
Credit Lender shall make available to the Issuing Bank an amount equal to its
respective participation in same day funds, at the office of such Issuing Bank
specified in such notice, not later than 1:00 P.M. New York City time on the
Business Day after the date notified by the Payments Administrator. In the event
that any Revolving Credit Lender fails to make available to the Issuing Bank the
amount of such Revolving Credit Lender's participation in such Letter of Credit
as provided in this Section 3.6, the Issuing Bank shall be entitled to recover
such amount on demand from such Revolving Credit Lender, together with interest
at the Federal Funds Rate.
(b) The Payments Administrator or the Issuing Bank, as the case
may be, shall distribute to each Lender which has paid all amounts payable by it
under this Section 3.6 with respect to any Letter of Credit, such Lender's
Revolving Credit Proportionate Share of all payments subsequently received by
the Payments Administrator or the Issuing Bank, as the case may be, from the
Borrower in reimbursement of drawings honored under such Letter of Credit when
such payments are received.
3.7. Nature of Issuing Bank's Duties. In determining whether to
pay under any Letter of Credit, the Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered under
that Letter of Credit have been delivered and that they substantially comply on
their face with the requirements of that Letter of Credit. As between the
Borrower, the Issuing Bank and each other Lender, the Borrower assumes all risks
of the acts and
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omissions of, or misuse of the Letter of Credit issued by the Issuing Bank by,
the respective beneficiaries of such Letter of Credit; provided, however, that
nothing in this sentence shall relieve the Issuing Bank of liability for its
gross negligence or willful misconduct. In furtherance and not in limitation of
the foregoing, neither the Issuing Bank nor any of the other Lenders shall be
responsible (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under such Letter of
Credit even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged, (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign such Letter of Credit, or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason, (iii) for failure of the beneficiary of such Letter
of Credit to comply fully with conditions required in order to draw upon such
Letter of Credit, (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
telecopy, facsimile or otherwise, whether or not they be in cipher, (v) for
errors in interpretation of technical terms, (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit, or of the proceeds thereof, (vii) for the
misapplication by the beneficiary of such Letter of Credit of the proceeds of
any drawing honored under such Letter of Credit, or (viii) for any consequences
arising from actions or omissions taken or omitted in good faith or from causes
beyond the control of the Issuing Bank or the other Lenders; provided, however,
that nothing in this sentence shall relieve the Issuing Bank of liability for
its own gross negligence or willful misconduct.
3.8. Obligations Absolute. The obligations of the Borrower to
reimburse the Issuing Bank for drawings honored under a Letter of Credit issued
by it and the obligations of the Revolving Credit Lenders under Section 3.6
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Credit Agreement under all circumstances including,
without limitation, the following circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit;
(b) the existence of any claim, set-off, defense or other right
which the Borrower or any Affiliate of the Borrower may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in connection with this Credit
Agreement, the transactions contemplated herein or any unrelated transaction
(other than the defense that the amount owed has already been paid in accordance
with the terms of this Credit Agreement); provided, however, that nothing
contained herein shall preclude the Borrower from asserting any such claim,
defense or counterclaim in a separate judicial proceeding or by compulsory
counterclaim;
(c) any draft, demand, certificate or any other documents
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
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(d) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit Documents;
(e) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(f) failure of any drawing under a Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of any
drawing; or
(g) the fact that a Default or Event of Default shall have
occurred and be continuing;
provided, however, that the Borrower shall have no obligation to reimburse the
Issuing Bank and the Lenders shall have no obligation under Section 3.6 in the
event of the Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under the Letter of Credit comply with
the terms of such Letter of Credit or with respect to any other express
obligation the Issuing Bank may have under this Credit Agreement in making any
payment pursuant to any Letter of Credit.
ARTICLE 4.
Interest, Fees and Expenses
4.1. Interest on Eurodollar Rate Loans. Subject to the provisions
of Section 4.4 hereof, interest on Eurodollar Rate Loans shall be payable in
arrears (i) on the last day of each Interest Period with respect to such
Eurodollar Rate Loans (and, in the case of any Interest Period in excess of
three months, on each date which occurs at three month intervals after the first
day of the respective Interest Period), (ii) at the date of any Conversion
thereof (or portion thereof) to a Base Rate Loan, (iii) upon any prepayment,
except pursuant to Section 2.6(d), (on the amount prepaid) and (iv) at maturity,
in each case at an interest rate per annum equal during each Interest Period for
such Eurodollar Rate Loan to the Adjusted Eurodollar Rate in effect for such
Interest Period in effect for such Eurodollar Rate Loan plus the relevant
Applicable Margin. The Payments Administrator upon determining the Adjusted
Eurodollar Rate for any Interest Period shall promptly notify the Borrower and
the Lenders thereof. Each determination by the Payments Administrator of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
4.2. Interest on Base Rate Loans. Subject to the provisions of
Section 4.4 hereof, interest on Base Rate Loans shall be payable quarterly in
arrears (i) on the last Business Day of each calendar quarter, (ii) upon any
prepayment, except pursuant to Section 2.6(d), (on the amount prepaid) and (iii)
at maturity, in each case at an interest rate per annum equal to the Base Rate
plus the relevant Applicable Margin. Each determination by the Payments
Administrator of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
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4.3. Notice of Continuation and Notice of Conversion. (a) With
respect to any Borrowing consisting of Eurodollar Rate Loans, the Borrower may,
subject to the provisions of Section 4.3(c) and the condition that no Default or
Event of Default then exists, elect to maintain such Borrowing or any portion
thereof equal to at least $1,000,000 as Eurodollar Rate Loans by selecting a new
Interest Period for such Borrowing (or portion thereof), which new Interest
Period shall commence on the last day of the immediately preceding Interest
Period. Each selection of a new Interest Period (a "Continuation") shall be made
by notice given not later than 12:00 Noon New York City time on the third
Business Day prior to the date of any such Continuation, by the Borrower to the
Payments Administrator. Such notice (a "Notice of Continuation") shall be by
telephone, telecopy, telex, facsimile or cable, confirmed immediately in writing
if by telephone, in substantially the form of Exhibit B-3, which shall be
completed in such manner as is necessary to comply with all limitations on the
Loans outstanding hereunder. If the Borrower shall fail to, or does not have the
right to, select a new Interest Period for any Borrowing consisting of
Eurodollar Rate Loans in accordance with this Section 4.3(a), such Loans will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Loans.
(b) The Borrower may on any Business Day occurring on or after
the Syndication Date (provided that no Default or Event of Default has occurred
and is continuing), upon notice (each such notice, a "Notice of Conversion")
given to the Payments Administrator, and subject to the provisions of Section
4.3(c), Convert the entire amount of or a portion of Revolving Loans or Term
Loans of one Type into a Borrowing of such Loans of the other Type; provided,
however, that any Conversion of any Eurodollar Rate Loans into Base Rate Loans
shall be made on, and only on, the last day of an Interest Period for such
Eurodollar Rate Loans. Each such Notice of Conversion shall be given not later
than 12:00 Noon New York City time on the Business Day prior to the date of any
proposed Conversion into Base Rate Loans and on the third Business Day prior to
the date of any proposed Conversion into Eurodollar Rate Loans (it being
understood and agreed that any Notice of Conversion with respect to a proposed
Conversion into Eurodollar Loans on or after the Restatement Effective Date may
be given by the Borrower to the Payments Administrator prior to the Restatement
Effective Date (subject to the preceding provisions of this Section 4.3(b)),
provided that, notwithstanding anything to the contrary set forth herein, the
Borrower shall be obligated to pay all breakage or similar costs of the type
described in Section 4.5(b) relating to such proposed Conversion in the event
that the Restatement Effective Date does not occur on September 1, 1998).
Subject to the restrictions specified above, each Notice of Conversion shall be
by telephone, telecopy, telex, facsimile or cable, confirmed immediately in
writing if by telephone, in substantially the form of Exhibit B-4. Each
Conversion shall be in an aggregate amount for the Revolving Loans of all
Lenders of not less than $250,000.
(c) Notwithstanding anything contained in Section 2.3 or Sections
4.3(a) and (b) above to the contrary,
(i) if, on or prior to the first day of any Interest Period, the
Payments Administrator is unable to determine the Adjusted Eurodollar
Rate for Eurodollar Rate Loans comprising any requested Borrowing,
Continuation or Conversion, the right of the
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Borrower to select or maintain Eurodollar Rate Loans for such Borrowing
or any subsequent Borrowing shall be suspended until the Payments
Administrator shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each
Revolving Loan or Term Loan comprising such Borrowing shall be made as,
or Converted into, a Base Rate Loan; provided that, promptly after the
Payments Administrator reasonably determines that the circumstances
giving rise to such suspension no longer exist, the Payments
Administrator shall notify the Borrower and the Lenders, and the
obligation of the Lenders to make, convert and continue Eurodollar Rate
Loans shall be reinstated;
(ii) if the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, Continuation or Conversion,
notify the Payments Administrator that the Adjusted Eurodollar Rate for
Revolving Loans or Term Loans comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or funding their
respective Revolving Loans or Term Loans for such Borrowing, the right
of the Borrower to select Eurodollar Rate Loans for such Borrowing shall
be suspended until the Payments Administrator shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer
exist, and each Revolving Loan or Term Loan comprising such Borrowing
shall be made as, or Converted into, a Base Rate Loan; and; provided
that, promptly after the Payments Administrator and the Required Lenders
reasonably determine that the circumstances giving rise to such
suspension no longer exist, the Payments Administrator shall notify the
Borrower and the Lenders, and the obligation of the Lenders to make,
convert and continue Eurodollar Rate Loans shall be reinstated; and
(iii) there shall not be at any one time more than twelve
Interest Periods in effect with respect to Eurodollar Rate Loans.
(d) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on the Borrower. In the case of any Borrowing,
Continuation or Conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of Eurodollar
Rate Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill, on or
before the date for such Borrowing, Continuation or Conversion specified in such
Notice of Borrowing, Notice of Continuation or Notice of Conversion, the
applicable conditions set forth in Article 5, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund the Eurodollar Rate Loan to be made by such Lender as part of
such Borrowing, Continuation or Conversion.
4.4. Interest After Default. Interest on any amount of matured
principal of the Loans, and interest on the amount of principal of the Loans
outstanding as of the date a Default an Event of Default occurs, and at all
times thereafter until the earlier of the date upon which (i) all Obligations
have been paid and satisfied in full or (ii) such Default or Event of Default
shall have been cured or waived, shall be payable on demand at a rate equal to
2% in excess of
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the rate then borne by such Loans, or, if higher, the Base Rate in effect from
time to time plus the sum of (x) the Applicable Margin for Base Rate Loans then
in effect and (y) 2%.
4.5. Reimbursement of Expenses. (a) From and after the
Restatement Effective Date, the Borrower shall promptly reimburse the
Administrative Agent for all Expenses of the Administrative Agent as the same
are incurred by the Administrative Agent and upon receipt of invoices therefor
and, if requested by the Borrower, such reasonable backup materials and
information (other than backup materials and information relating to the
calculation of breakage costs) as the Borrower shall reasonably request.
(b) If any payment of principal of, or any Conversion of, any
Eurodollar Rate Loan is made other than on the last day of an Interest Period
applicable thereto for any reason, the Borrower shall, upon demand by any Lender
(with a copy of such demand to the Payments Administrator), pay to the Payments
Administrator for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Eurodollar Rate Loan.
4.6. Unused Line Fee. The Borrower shall pay to the Payments
Administrator for the benefit of each of the Lenders (other than a Defaulting
Lender for so long as such Lender is a Defaulting Lender) a non-refundable fee
(the "Unused Line Fee") equal to the Applicable Margin then in effect for Unused
Line Fees, per annum on the unused portion of such Lender's Revolving Credit
Commitment, which Unused Line Fee shall (i) accrue from the Restatement
Effective Date until the Revolving Credit Expiration Date or any earlier date on
which the Total Commitment is terminated and (ii) be due and payable quarterly
in arrears on the last Business Day of March, June, September and December, and
on the Revolving Credit Expiration Date or any earlier date on which the Total
Commitment is terminated.
4.7. Letter of Credit Fees. (a) The Payments Administrator shall
be entitled to charge to the account of the Borrower (i) for the ratable benefit
of the Revolving Credit Lenders in accordance with their respective Revolving
Credit Proportionate Shares, a fee (the "Letter of Credit Fee"), in an amount
equal to the Applicable Margin then in effect for Eurodollar Rate Loans per
annum of the daily weighted average amount of outstanding Letter of Credit
Obligations during the immediately preceding quarter, due and payable quarterly
in arrears on the last Business Day of March, June, September and December, and
on the Revolving Credit Expiration Date or any earlier date on which all Letters
of Credit have been terminated and (ii) as and when incurred by the Payments
Administrator or any Lender, any administrative charges, fees, costs and
expenses charged to the Payments Administrator or any Lender for the Borrower's
account by the Issuing Bank (other than any fees charged to the Payments
Administrator or any Lender which would be duplicative of the Letter of Credit
Fee paid to the Payments Administrator for the benefit of the Lenders) (the
"Issuing Bank Fees") in connection with the issuance of any Letters of Credit by
the Issuing Bank. Each determination by the Payments Administrator of Letter of
Credit Fees hereunder shall be conclusive and binding for
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all purposes, absent manifest error. In addition, the Borrower shall pay to the
Issuing Bank, for its own benefit, the Letter of Credit facing fees outlined in
the Fee Letters.
(b) Letter of Credit Fees payable in respect of Letter of Credit
Obligations outstanding as of the date a Default or an Event of Default occurs,
and at all times thereafter until the earlier of the date upon which (i) all
Obligations have been paid and satisfied in full or (ii) such Default or Event
of Default shall have been cured or waived, shall be payable on demand at a rate
equal to the rate at which the Letter of Credit Fees are charged pursuant to
Section 4.7(a) above, plus 2% per annum.
4.8. Other Fees and Expenses. The Borrower agrees to pay (without
duplication) fees to the Agents in the amounts and at the times set forth in the
Fee Letters.
4.9. Authorization to Charge Account. The Borrower hereby
authorizes the Payments Administrator, subject to prior notice to the Borrower,
to charge the Borrower's Revolving Loan account with the amount of all Fees,
Expenses and other payments to be paid hereunder, under the Fee Letter and under
the other Credit Documents as and when such payments become due. The Borrower
confirms that any charges which the Payments Administrator may so make to the
Borrower's Revolving Loan account as herein provided will be made as an
accommodation to the Borrower and solely at the Payments Administrator's
discretion.
4.10. Indemnification in Certain Events. (a) If after the
Restatement Effective Date, either (i) any change in or in the interpretation of
any law or regulation is introduced, including, without limitation, with respect
to reserve requirements, applicable to any Agent, the Issuing Bank or any of the
Lenders (or, in the case of a Lender which is not a banking institution, any
Affiliate of such Lender funding such Lender ("Funding Affiliate")), or (ii) any
Agent, the Issuing Bank, or any of the Lenders (or, in the case of a Lender
which is not a banking institution, any Funding Affiliate) complies with any
future guideline or request from any central bank or other Governmental
Authority or (iii) any Agent, the Issuing Bank, or any of the Lenders (or, in
the case of a Lender which is not a banking institution, any Funding Affiliate)
reasonably determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or any
Agent, the Issuing Bank, or any of the Lenders (or, in the case of a Lender
which is not a banking institution, any Funding Affiliate) complies with any
future request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, and
in the case of any event set forth in this clause (iii), such adoption, change
or compliance has or would have the direct or indirect effect of reducing the
rate of return on any of such Person's (or any Funding Affiliate's) capital as a
consequence of its obligations hereunder to a level below that which such Person
could have achieved but for such adoption, change or compliance (taking into
consideration such Person's (or any Funding Affiliate's) policies with respect
to capital adequacy) by an amount deemed by such Person to be material, and any
of the foregoing events described in clauses (i), (ii) or (iii) increases the
cost or reduces the rate of
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return to any Agent, the Issuing Bank or any of the Lenders of (A) (i) with
respect to an event described in clauses (i) and (ii), making or maintaining its
Eurodollar Rate Loans, and (ii) with respect to an event described in clause
(iii), funding or maintaining its Commitment or (B) issuing, making or
maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or reduces the amount receivable in respect thereof by
any Agent, the Issuing Bank or any Lender, then the Borrower shall within 15
days after demand by the Administrative Agent, pay to the Payments
Administrator, for the account of each applicable Lender or the Issuing Bank, as
the case may be, additional amounts sufficient to indemnify the Agents, the
Lenders or the Issuing Bank against such increase in cost or reduction in amount
receivable allocable to such Agent's, such Lenders' or the Issuing Bank's, as
the case may be, funding or maintaining its Commitment or issuing, making or
maintaining any Letter of Credit or purchasing or maintaining any participation
therein. A certificate as to the amount of such increased cost and setting forth
in reasonable detail the calculation thereof shall be submitted to the Borrower
by the applicable Agent, or the applicable Lender or the Issuing Bank, as the
case may be, and shall be conclusive absent manifest error.
(b) Each Lender, the Issuing Bank or each Agent will notify the
Borrower and the Payments Administrator of any event occurring after the
Restatement Effective Date which will entitle such Lender, the Issuing Bank or
such Agent to payment pursuant to Section 4.10(a) as promptly as practicable
after it obtains knowledge thereof, specifying the event giving rise to such
claim and setting out in reasonable detail an estimate of the basis and
computation of such claim. Upon receipt of such notice, the Borrower shall
compensate such Lender, the Issuing Bank or Agent in accordance with Section
4.10(a) from the date such costs are incurred (including, without limitation,
where such costs are retroactively applied); provided, however, that the
Borrower shall not be required to compensate a Lender, the Issuing Bank or Agent
for costs incurred earlier than 90 days prior to the date of the notice required
to be delivered to the Borrower pursuant to this Section 4.10(b).
4.11. Calculations. All calculations of (i) interest hereunder
and (ii) Fees, including, without limitation, Unused Line Fees and Letter of
Credit Fees shall be made by the Payments Administrator, on the basis of a year
of 360 days, or, if such computation would cause the interest and Fees
chargeable hereunder to exceed the Highest Lawful Rate, 365/366 days, in each
case for the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which such interest or Fees
are payable. Each determination by the Payments Administrator of an interest
rate or payment hereunder shall be conclusive and binding for all purposes,
absent manifest error.
4.12. Change of Applicable Lending Office. Each Lender agrees
that on the occurrence of any event giving rise to the operation of Sections
2.9, 4.3(c) or 4.10 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans or Letters of
Credit affected by such event, provided that such designation is made on such
terms that such Lender and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Sections. Nothing in this Section
4.12 shall affect or postpone any of the obligations of the Borrower or the
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right of any Lender provided in Sections 2.9, 4.3 or 4.10.
ARTICLE 5.
Conditions Precedent
5.1. Conditions to Initial Loans and Letters of Credit. Except as
provided in Section 11.21, the occurrence of the Restatement Effective Date and
the obligation of each Lender to make Loans hereunder and the obligation of the
Issuing Bank to issue Letters of Credit, in each case on the Restatement
Effective Date, is subject to the satisfaction of, or waiver of, immediately
prior to or concurrently with the occurrence of the Restatement Effective Date
and the making of such Loans or the issuance of such Letters of Credit on the
Restatement Effective Date, the following conditions precedent:
(a) Execution of Agreement; Notes. On or prior to the Restatement
Effective Date, this Credit Agreement shall have been executed and
delivered as provided in Section 11.14 and there shall have been
delivered to the Payments Administrator for the account of each Lender
the appropriate Revolving Note and/or Term Note in the amount, maturity
and as otherwise provided herein.
(b) Officer's Certificate. On the Restatement Effective Date, the
Administrative Agent shall have received a certificate from the Borrower
dated such date signed by an appropriate officer of the Borrower stating
that all of the applicable conditions set forth in Sections 5.1(d)(C),
(e), (h), (i), (j), (k), (l), (m) and (cc) and 5.2(a), (b), (c) and (d)
exist as of such date, provided the certificate shall not be required to
certify as to the acceptability of any items to the Agents and/or the
Required Lenders or as to whether the Agents and/or the Required Lenders
are satisfied with any of the matters described in said Sections.
(c) Opinions of Counsel. On the Restatement Effective Date, the
Administrative Agent shall have received opinions, addressed to the
Agents, the Collateral Agent and each of the Lenders and dated the
Restatement Effective Date, (i) from ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel to Holdings and the Borrower, which opinion
shall cover the matters contained in Exhibit E-1 and such other matters
incident to the transactions contemplated herein as the Agents may
reasonably request, (ii) from White & Case LLP, special counsel to the
BTCC, which opinion shall cover the matters contained in Exhibit E-2 and
(iii) from local counsel reasonably satisfactory to the Agents, opinions
each of which shall be in form and substance reasonably satisfactory to
the Agents and shall cover the perfection of the security interest
granted pursuant to the Security Agreement and such other matters
incident to the transaction contemplated herein as the Agents may
reasonably request.
(d) Security Agreement. On the Restatement Effective Date, the
Borrower and each of the Guarantors shall have duly authorized, executed
and delivered an Amended and Restated Security Agreement in the form of
Exhibit F (as modified, amended or
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supplemented from time to time in accordance with the terms thereof and
hereof, the "Security Agreement") together with:
(A) for each Guarantor which was not party to the Security
Agreement prior to the Restatement Effective Date (and for the
Borrower and each other Guarantor, to the extent the Collateral
Agent determines that additional such filings are reasonably
necessary), executed copies of Financing Statements (Form UCC-1)
in appropriate form for filing under the UCC of each jurisdiction
as may be necessary to perfect the security interests purported
to be created by the Security Agreement;
(B) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, each of recent date listing
all effective financing statements that name SMI or any of its
Subsidiaries as debtor and that are filed in the jurisdictions
referred to in clause (A), together with copies of such financing
statements (none of which shall cover the Collateral except (x)
those with respect to which appropriate termination statements
executed by the secured lender thereunder have been delivered to
the Administrative Agent and (y) to the extent evidencing
Permitted Liens);
(C) subject to Section 11.21, evidence that, with respect
to all Certificated Units of the Borrower and its Subsidiaries on
the Restatement Effective Date, either (x) a notation of the
security interest of the Collateral Agent has been made on the
certificate of title with respect thereto (or application for
such notation has been, or will substantially concurrently with
the Restatement Effective Date be, made) which notation shall,
under applicable state law, perfect the Collateral Agent's
security interest therein or (y) an opinion of counsel
satisfactory to the Administrative Agent to the effect that such
notation of a security interest on the relevant certificate of
title under applicable state law is not required to perfect (or
maintain the perfection of) the security interests therein
created (or maintained) pursuant to the Security Agreement;
(D) subject to Section 11.19, evidence that all other
filings of, or with respect to, the Security Agreement as may be
necessary or, in the opinion of the Collateral Agent, desirable
to perfect (or maintain the perfection of) the security interests
intended to be created by the Security Agreement have been
completed or will be completed substantially concurrently with
the Restatement Effective Date; and
(E) subject to Section 11.19, evidence that all other
actions necessary or, in the reasonable opinion of the Collateral
Agent, desirable to perfect and protect (or maintain the
perfection of) the security interests purported to be created by
the Security Agreement have been taken.
(e) Collateral Access Agreements. To the extent otherwise
available on the Restatement Effective Date, the Agents shall have
received Collateral Access Agreements
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substantially in the form of Exhibit G (as modified, amended, or
supplemented from time to time in accordance with the terms hereof and
thereof, the "Collateral Access Agreements") with respect to Rental
Equipment locations as may be requested by the Agents, which Collateral
Access Agreements shall be in full force and effect; provided that,
notwithstanding the foregoing, the Borrower, in obtaining the Collateral
Access Agreements required under this Section 5.1(e), shall not be
obligated to make significant payments to landlords or alter the
respective lease terms with respect to any Rental Equipment locations in
any way which is materially adverse to the Borrower.
(f) Collection Bank Agreements; Concentration Account Agreement.
On the Restatement Effective Date, the Agents shall have received fully
executed copies of the Collection Bank Agreements, the Concentration
Account Agreements, the Fleet Collection Bank Agreement and the Fleet
Collection Account Acknowledgment, each of which shall be in full force
and effect.
(g) Borrowing Base Certificate. On the Restatement Effective
Date, the Borrower shall have delivered to the Administrative Agent a
Borrowing Base Certificate meeting the requirements of Section 7.1(e)
(provided that to the extent any relevant data or other information with
respect to the Borrowing Base Certificate is not available at such time,
such Borrowing Base Certificate shall be based upon the Borrower's best
good-faith estimate of such data or other information at such time) and
which Borrowing Base Certificate shall indicate (in a manner
satisfactory to the Administrative Agent) that on such date and after
giving effect to the consummation of the Transaction and all Credit
Events on such date, the Borrower shall be able to incur additional
Outstandings, after giving effect to the Outstandings on the Restatement
Effective Date, of $60,000,000 or more in compliance with the Borrowing
Base restrictions (it being understood and agreed that, to the extent
any relevant data or other information relating to the Borrowing Base
Certificate was not available at the time of delivery of such Borrowing
Base Certificate, such data or other information shall thereafter be
delivered to the Administrative Agent, along with a corrected Borrowing
Base Certificate, promptly upon such data or other information becoming
available and in any event, within 30 days after the Restatement
Effective Date).
(h) Equity Financing. On or prior to the Restatement Effective
Date, (a) the Borrower shall have received gross cash proceeds of at
least $64,800,000 from common equity financing from the Equity Investors
(the "Common Equity Financing"), (b) the Agents shall have received true
and correct copies of all agreements or documents governing, or related
to, the Common Equity Financing (the "Equity Financing Documents") and
(c) all the terms and conditions of the Equity Financing Documents shall
be in form and substance reasonably satisfactory to the Agents. All
conditions precedent to the consummation of the Common Equity Financing
as set forth in the Equity Financing Documents shall have been
satisfied, and not waived in any material respect unless consented to by
the Agents, to the reasonable satisfaction of the Agents. The Borrower
shall have used all cash proceeds received from the Common Equity
Financing to make payments owing in connection with the Transaction
prior to or
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concurrently with the Borrower's utilization of the Loans for such
purpose. The cash proceeds received from the Common Equity Financing,
when added to the aggregate principal amount of Loans incurred on the
Restatement Effective Date, shall be sufficient to effect the
Transaction and to pay fees and expenses in connection therewith. The
Common Equity Financing shall have occurred in all material respects in
accordance with the terms and conditions of the Equity Financing
Documents and all applicable law.
(i) Consummation of Acquisition. On or prior to the Restatement
Effective Date, (i) there shall have been delivered to the Agents and
the Lenders true and correct copies of all Acquisition Documents,
certified as such by an officer of the Borrower, all of which shall be
in form and substance reasonably satisfactory to the Agents, (ii) the
Acquisition, including all of the terms and conditions thereof, shall
have been duly approved by the requisite boards of directors and (if
required by applicable law) the requisite shareholders and all
Acquisition Documents shall have been duly executed and delivered by the
parties thereto and shall be in full force and effect, (iii) the
representations and warranties set forth in the Acquisition Documents
shall be true and correct in all material respects as if made on and as
of the Restatement Effective Date, (iv) each of the conditions precedent
to the consummation of the Acquisition as set forth in the Acquisition
Documents shall have been satisfied in all material respects, and not
waived except with the consent (which will not be unreasonably withheld)
of the Agents, to the satisfaction of the Agents, (v) all Indebtedness
of SMI and its Subsidiaries shall be repaid and all Liens relating
thereto shall have been terminated pursuant to termination agreement
satisfactory in form and substance to the Agents unless otherwise
permitted under this Credit Agreement, (vi) the Acquisition shall have
been, or shall substantially contemporaneously (and in any event on the
Restatement Effective Date) be, consummated in all material respects in
accordance with the Acquisition Documents and all applicable law
(excluding immaterial violations of law which could not reasonably be
expected to have, in the aggregate for all such violations, a material
adverse effect on the Acquisition or on the operations, financial
condition or prospects of the Borrower and its Subsidiaries taken as a
whole).
(j) Indebtedness. After giving effect to the consummation of the
Transaction, Holdings, the Borrower and their respective Subsidiaries
shall have no outstanding Indebtedness except (i) pursuant to this
Credit Agreement, (ii) the Senior Unsecured Notes, (iii) industrial
revenue bonds in an amount not to exceed in the aggregate $5,000,000 and
(iv) Existing Indebtedness, if any, as shall be permitted to remain
outstanding by the Agents and which is listed on Schedule III hereto.
With respect to each issue of Indebtedness which is to remain
outstanding as described in clauses (i) through (iv) of the immediately
preceding sentence, and after giving effect to the Transaction, there
shall exist no default or event of default, no change of control or
similar event which would require any offers to repurchase same, and no
uncured breach thereof.
(k) Approvals. All necessary material governmental (domestic and
foreign) and third party approvals and/or consents in connection with
the Transaction and the
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financing hereof, the transactions contemplated by the Transaction
Documents and otherwise referred to herein or therein shall have been
obtained and remain in full force and effect, and all applicable waiting
periods shall have expired without any action being taken by any
competent authority which restrains, prevents, or imposes materially
adverse conditions upon, the consummation of the Transaction and the
financing thereof, the making of any Loans or the issuance of any
Letters of Credit or the other transactions contemplated hereby. There
shall not have been any statute, rule regulation, injunction or order
applicable to the Transaction, or the financing thereof, promulgated,
enacted, entered or enforced by any state or federal government or
governmental or regulatory authority or agency or by any federal or
state court or tribunal, nor shall there be pending any action or
proceeding by or before any such authority, court or tribunal, involving
a substantial likelihood of an order, that would prohibit, restrict,
delay or otherwise materially adversely affect the Transaction or the
financing thereof.
(l) Material Adverse Change, etc. On the Restatement Effective
Date, nothing shall have occurred (and neither the Agents nor the
Lenders shall have become aware of any facts, conditions or other
information not previously known to them) since August 11, 1998 which
either the Agents or Lenders shall reasonably determine is reasonably
likely to have a materially adverse effect on (i) the Transaction, (ii)
the rights or remedies of the Lenders or the Agents, or the ability of
the Credit Parties to perform their respective obligations to the
Lenders or the Agents (after giving effect to the Transaction) or (iii)
the performance, business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Acquired Business or Holdings
and its Subsidiaries taken as a whole.
(m) Litigation. On the Restatement Effective Date, with the
exception of the Disclosed Litigation, there shall be no actions, suits,
investigations or proceedings pending or threatened (a) with respect to
this Credit Agreement, any other Credit Document, the Transaction or any
document executed in connection therewith, or (b) which the Agents shall
determine is reasonably likely to have a materially adverse effect on
the Transaction or the Acquired Business or a Material Adverse Effect
(after giving effect to the Transaction).
(n) Corporate Proceedings. (i) On the Restatement Effective Date,
the Administrative Agent shall have received certificates from each
Credit Party in the form of Exhibit H (i) certifying that there were no
changes, or providing the text of any changes, to the certificate of
incorporation and by-laws of such Credit Parties as delivered pursuant
to Section 5.1(n) of the Original Credit Agreement, (ii) to the effect
that each such Credit Party is in good standing in its respective State
of incorporation and in those States where each such Credit Party
conducts business and (iii) providing the resolutions adopted by each
such Credit Party with respect to the actions contemplated in this
Credit Agreement and the related Credit Documents (including, without
limitation, with respect to the Acquisition and the amendment and
restatement of this Credit Agreement and various of the other Credit
Documents, and the obligations of such Credit Party with respect to the
increased extensions of credit pursuant hereto), and the foregoing shall
be
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reasonably acceptable to the Agents in their reasonable discretion.
(ii) On the Restatement Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Credit Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and
substance to the Agents, and the Agents shall have received all
information and copies of all certificates, documents and papers,
including good standing certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Agents
reasonably may have requested in connection therewith, such documents
and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
(o) Plans; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Shareholders' Agreements; Management
Agreements; Employment Agreements; Tax Sharing Agreements; Material
Contracts. On or prior to the Restatement Effective Date, there shall
have been delivered or made available to the Agents true and correct
copies, of the following documents (in each case except to the extent
already delivered or made available for review by the Agents on or prior
to the Original Effective Date), in each case as same will be in effect
on the Restatement Effective Date after the consummation of the
Acquisition:
(i) all Plans (and for each Plan that is required to file
an annual report on Internal Revenue Service Form 5500-series, a
copy of the most recent such report (including, to the extent
required, the related financial and actuarial statements and
opinions and other supporting statements, certifications,
schedules and information), and for each Plan that is a
"single-employer plan", as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor)
and any other "employee benefit plans", as defined in Section
3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former
employees of Holdings, the Borrower or any of their respective
Subsidiaries or any ERISA Affiliate (provided that the foregoing
shall apply in the case of any "multiemployer plan", as defined
in 4001(a)(3) of ERISA, only to the extent that any document
described therein is in the possession of Holdings, the Borrower
or any of their respective Subsidiaries or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any
such plan), and any recent actuarial analysis prepared in
connection with any of the foregoing;
(ii) all collective bargaining agreements or any other
similar agreement or arrangements covering the employees of
Holdings, the Borrower or any of their respective Subsidiaries
(collectively, together with any agreements referred to in
Section 5.01(o)(ii) of the Original Credit Agreement, the
"Collective Bargaining Agreements");
(iii) all agreements evidencing or relating to any
Existing Indebtedness
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in an aggregate amount in excess of $1,000,000 (collectively,
together with any agreements referred to in Section 5.01(o)(iii)
of the Original Credit Agreement, the "Existing Indebtedness
Agreements");
(iv) all agreements entered into by Holdings, the Borrower
or any of their respective Subsidiaries (x) governing the terms
and relative rights of such entity's capital stock or (y) with
any shareholders relating to such entity with respect to their
capital stock (collectively, together with any agreements
referred to in Section 5.01(o)(iv) of the Original Credit
Agreement, the "Shareholders' Agreements");
(v) any material agreements (or the forms thereof) with
members of, or with respect to, the management of Holdings, the
Borrower or any of their respective Subsidiaries (collectively,
together with any agreements referred to in Section 5.01(o)(v) of
the Original Credit Agreement, the "Management Agreements");
(vi) any employment agreements (or the forms thereof
together with a list of employees who are parties to such
agreements) entered into by Holdings, the Borrower or any of
their respective Subsidiaries (collectively, together with any
agreements referred to in Section 5.01(o)(vi) of the Original
Credit Agreement, the "Employment Agreements");
(vii) any tax sharing, tax allocation and other similar
agreement entered into by Holdings, the Borrower or any of their
respective Subsidiaries (collectively, together with any
agreements referred to in Section 5.01(o)(vii) of the Original
Credit Agreement, the "Tax Sharing Agreements"); and
(viii) any other Material Contracts;
all of which documents relating to the Plans, Collective Bargaining
Agreements, Existing Indebtedness Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements, Tax Sharing Agreements and
Material Contracts shall be in the form and substance reasonably
satisfactory to the Agents and shall, except as contemplated by the
Credit Documents or the Transaction Documents, be in full force and
effect on the Restatement Effective Date.
(p) Solvency Certificate. On or prior to the Restatement
Effective Date, the Lenders shall have received a solvency certificate
from the chief financial officer of Holdings in form and substance
reasonably acceptable to the Agents stating the conclusions that, after
giving effect to the Transaction and the incurrence of all the financing
contemplated thereby, the Borrower and the Borrower and its Subsidiaries
taken as a whole are not insolvent and will not be rendered insolvent by
the indebtedness incurred in connection therewith, and will not be left
with unreasonably small capital with which to engage in its or their
businesses and will not have incurred debts beyond its or their ability
to pay such debts as they mature.
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(q) Projections; etc. On or prior to the Restatement Effective
Date, the Lenders shall have received detailed annual five-year
financial projections (setting forth yearly projections for each fiscal
year during such five-year period) (including details as to rental
rates, utilization rates, fleet capital expenditures and cost per unit
assumptions and corresponding balance sheets, statements of operations
and cash flow and changes in shareholders' equity) of Holdings and its
Subsidiaries after giving effect to the Transaction in form and
substance reasonably satisfactory to the Agents (together with those
projections heretofore provided to the Lenders, the "Projections").
(r) Insurance Policies. On or prior to the Restatement Effective
Date, the Agents shall have received (i) evidence of insurance coverage
(including, without limitation, certificates of insurance) for the
business and properties of Holdings, the Borrower and their respective
Subsidiaries (after giving effect to the Acquisition) showing compliance
with the requirements of Section 7.10 and (ii) endorsements, (x) naming
the Administrative Agent as loss payee with respect to all casualty
coverages and containing other customary loss payable provisions and (y)
naming the Administrative Agent as additional insured for all general
liability coverages, all in form and substance reasonably satisfactory
to the Agents.
(s) Consent Letter. On or prior to the Restatement Effective
Date, the Agents shall have received a letter from CT Corporation
System, substantially in the form of Exhibit I hereto, indicating its
consent to its appointment by Holdings, the Borrower, and each other
Credit Party as its agent to receive service of process as specified in
Section 11.1 of this Credit Agreement.
(t) Payment of Fees. On the Restatement Effective Date, all
costs, fees and expenses, and all other compensation contemplated by
this Credit Agreement or the Fee Letters due to the Agents or the
Lenders (including, without limitation, reasonable legal fees and
expenses) shall have been paid to the extent due.
(u) Collateral Examination and Appraisal. On or prior to the
Restatement Effective Date, the Lenders shall have received and be
satisfied with the results of (i) a collateral examination report
concerning all accounts receivable of the Acquired Business and its
Rental Equipment, all in form and substance reasonably satisfactory to
the Agents (to be received post-closing) and (ii) a current complete
appraisal analysis (not on a desktop, but on a physical inspection
basis) by a third party and on a valuation basis acceptable to the
Agents with respect to the Rental Equipment of the Acquired Business.
(v) Environmental Reports. On or prior to the Restatement
Effective Date, the Lenders shall have received and be satisfied with
the results of a written environmental and hazardous substance report by
GaiaTech relating to the Acquired Business and their respective
Subsidiaries (it being understood that the Agents shall also receive
such other information as may be reasonably requested by the Agents).
(w) Subsidiaries Guaranty. On the Restatement Effective Date,
each of the Wholly-Owned Domestic Subsidiaries of the Borrower (each a
"Subsidiary Guarantor"
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and collectively, the "Subsidiary Guarantors") shall have duly
authorized, executed and delivered an Amended and Restated Subsidiary
Guaranty in the form of Exhibit J (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the
"Subsidiaries Guaranty") and the Subsidiaries Guaranty shall be in full
force and effect.
(x) Pledge Agreement. On the Restatement Effective Date,
Holdings, the Borrower and each Subsidiary Guarantor shall have duly
authorized, executed and delivered an Amended and Restated Pledge
Agreement in the form of Exhibit K (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the
"Pledge Agreement"), and shall have delivered all pledged securities
(endorsed in blank in the case of promissory notes or accompanied by
executed and undated stock powers in the case of capital stock)
purported to be pledged thereunder to BTCC (to the extent not already
delivered pursuant to the Pledge Agreement), as pledgee thereunder for
the benefit of the secured creditors described therein.
(y) Mortgage Amendments. On or prior to the Restatement Effective
Date, the Collateral Agent shall have received:
(i) fully executed counterparts of amendments (the
"Mortgage Amendments"), in form and substance satisfactory to the
Agents and the Required Lenders, to each of the Mortgages,
together with evidence that counterparts of each of the Mortgage
Amendments have been delivered to the title company insuring the
Lien of the Mortgages for recording in all places to the extent
necessary or desirable, in the judgment of the Collateral Agent,
effectively to maintain a valid and enforceable first priority
mortgage lien (subject to Permitted Encumbrances relating
thereto) on the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under
local law) for the benefit of the secured creditors; and
(ii) endorsements reasonably satisfactory to the
Collateral Agent to each Mortgage Policy assuring the Collateral
Agent that each Mortgage is a valid and enforceable first
priority mortgage lien on the respective Mortgaged Property, free
and clear of all defects and encumbrances except Permitted
Encumbrances.
(z) Deposit Account Agreement. On the Restatement Effective Date,
the Deposit Account Agreement in the form of Exhibit M (as modified,
amended or supplemented from time to time in accordance with the terms
thereof and hereof (the "Deposit Account Agreement") entered into
pursuant to the Original Credit Agreement shall remain in full force and
effect.
(aa) Bailee Agreement. On the Restatement Effective Date, the
Bailee Agreement previously entered into pursuant to the Original Credit
Agreement in the form of Exhibit O (as modified, amended or supplemented
from time to time in accordance with the terms hereof and thereof, the
"Bailee Agreement"), among the Administrative Agent on the behalf of the
Lenders, First Trust National Association on behalf of the
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holders of Senior Secured Notes, the Borrower and First Trust National
Association, as Bailee, shall be in force and effect, except that an
amendment thereto (in form and substance satisfactory to the
Administrative Agent) shall have been entered into for the purpose (and
with the effect) of causing SMI to become a party thereto.
(bb) Custodian Agreement. On the Restatement Effective Date, the
Custodian Agreement entered into pursuant to the Original Credit
Agreement in the form of Exhibit P (as modified, amended or supplemented
from time to time in accordance with the terms hereof and thereof, the
"Custodian Agreement"), among the Administrative Agent on behalf of the
Lenders, First Trust National Association on behalf of the holders of
Senior Secured Notes, Mobile Field Office, the Borrower and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, as the Custodians, shall be in full
force and effect, except that an amendment thereto (in form and
substance satisfactory to the Administrative Agent) shall have been
entered into for the purpose (and with the effect) of causing SMI to
become a party thereto.
(cc) Unit Subsidiary; Transfer of Assets Thereto; Master Lease
Agreements; etc. On the Restatement Effective Date, the Unit Subsidiary
shall be a direct Wholly-Owned Subsidiary of the Borrower (all of the
equity interests in which shall have been pledged, and delivered for
pledge, pursuant to the Pledge Agreement). The Governing Documents of
the Unit Subsidiary shall have been previously delivered to the Agents
and there shall have been no amendments, modifications or supplements
thereto since the Original Effective Date. On or prior to the
Restatement Effective Date, the Borrower and its other Subsidiaries
(including SMI and its Subsidiaries) shall have (subject to Section
11.21) transferred all Non-Qualified Units then owned by the Borrower
and its other Subsidiaries to the Unit Subsidiary as a capital
contribution thereto. The Agents and the Lenders shall have received
true and correct copies of all documentation executed in connection with
the transfer of the Non-Qualified Units as required above. On or prior
to the Restatement Effective Date, each of the Borrower and SMI (subject
to Section 11.21) shall have entered into one or more master lease
agreements (the "Master Lease Agreements") with the Unit Subsidiary,
pursuant to which the Non-Qualified Units from time to time held by the
Unit Subsidiary shall be leased to the Borrower or SMI, as the case may
be, all terms and conditions of which Master Lease Agreements shall be
satisfactory to the Agents and the Required Lenders (it being understood
and agreed that a Master Lease Agreement entered into by SMI on
substantially the same terms as the Master Lease Agreement entered into
by the Borrower as of May 22, 1997 shall be deemed to be satisfactory to
the Agents and the Required Lenders).
(dd) Original Credit Agreement; etc. On the Restatement Effective
Date, (i) all Revolving Loans outstanding pursuant to the Original
Credit Agreement shall be repaid in full (and the Borrower shall have
paid all breakage and similar costs resulting therefrom in accordance
with the provisions in Section 4.5(b) of the Original Credit Agreement),
(ii) all accrued interest on all outstanding extensions of credit
pursuant to the Original Credit Agreement and all regularly accruing
fees pursuant to the Original Credit Agreement, shall be repaid in full
on, and through, the Restatement Effective Date
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(whether or not same would otherwise be then due and payable pursuant to
the Original Credit Agreement) and (iii) the Administrative Agent shall
have received evidence in form, scope and substance satisfactory to it
that the matters set forth in this clause (dd) have been satisfied on
such date.
5.2. Conditions to all Credit Events. On the date of the making
of any Loan or the issuance of any Letter of Credit, both at the time of making
thereof and after giving effect thereto and to the application of the proceeds
therefrom, the following statements shall be true to the satisfaction of the
Administrative Agent (and each delivery or deemed delivery of each Notice of
Borrowing and a Letter of Credit Request, and the acceptance by the Borrower of
the proceeds of such Loan or issuance of such Letter of Credit, shall constitute
a representation and warranty by the Borrower that on the date of such Loan or
issuance of such Letter of Credit at the time of making thereof and after giving
effect thereto and to the application of the proceeds therefrom, such statements
are true):
(a) the representations and warranties contained in this Credit
Agreement and in each other Credit Document are true and correct in all
material respects on and as of the date of such Loan or issuance of such
Letter of Credit as though made on and as of such date, except to the
extent that such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall
have been true and accurate on and as of such earlier date);
(b) no event has occurred and is continuing, or would result from
such Loan or the issuance of any Letter of Credit or the application of
the proceeds thereof, which would constitute a Default or an Event of
Default; and
(c) with respect to the issuance of any Letter of Credit, none of
the events set forth in Section 3.1 hereof has occurred and is
continuing or would result from the issuance of such Letter of Credit.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to each of the
Lenders that all of the applicable conditions specified above exist as of the
date of such Credit Event. All of the certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the Administrative Agent at the location where the closing
occurs for the account of each of the Lenders and, except for the Revolving
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
in form and substance as specified herein or otherwise satisfactory to the
Administrative Agent.
ARTICLE 6.
Representations and Warranties
To induce the Lenders to enter into this Credit Agreement and to
make the Loans and issue and/or participate in the Letters of Credit provided
for herein, each of Holdings and the
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Borrower makes the following representations, warranties and agreements (after
giving effect to the Acquisition), as to itself and as to each of its respective
Subsidiaries, all of which shall survive the execution and delivery of this
Credit Agreement, the making of the Loans and the issuance of the Letters of
Credit (with the occurrence of each Credit Event being deemed to constitute a
representation and warranty that the matters specified in this Article 6 are
true and correct in all material respects on and as of the date of each such
Credit Event, unless stated to relate to a specific earlier date, in which case
they will be true and correct as of such earlier date):
6.1. Corporate Status. Each Credit Party (i) is a duly organized
and validly existing corporation or limited liability company in good standing
under the laws of the jurisdiction of its organization and has the corporate or
limited liability company power and authority to own its property and assets and
to transact the business in which it is engaged and presently proposes to engage
and (ii) has duly qualified and is authorized to do business and is in good
standing in all jurisdictions where it is required to be so qualified and where
the failure to be so qualified would be reasonably likely to have a Material
Adverse Effect.
6.2. Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors and general equitable
principles (regardless of whether enforcement is sought in equity or at law) and
(ii) federal securities or other laws or regulations or public policy insofar as
they may restrict the enforceability of rights to indemnification.
6.3. No Violation. Neither the execution, delivery and
performance by any Credit Party of the Credit Documents to which it is a party
nor compliance with the terms and provisions thereof, nor the consummation of
the transactions contemplated therein (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict or be
inconsistent with or violate or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Collateral Documents) result in the creation or imposition
of (or the obligation to create or impose) any Lien upon any of the property or
assets of such Credit Party or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, agreement or other instrument to which
such Credit Party or any of its Subsidiaries is a party or by which it or any of
its property or assets are bound or to which it may be subject or (iii) will
violate any provision of any Governing Document of Holdings, the Borrower or any
of their respective Subsidiaries, except, in the case of clauses (i) and (ii),
any contraventions, conflicts, inconsistencies, breaches and defaults which are
not reasonably likely to adversely affect any Lender or to have a Material
Adverse Effect. In no event shall any Credit Event hereunder conflict or be
inconsistent with or violate or result in any
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breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, the Senior Unsecured Notes Indenture.
6.4. Litigation. Except for the Disclosed Litigation, there are
no actions, suits or proceedings pending or threatened with respect to (i) any
Credit Document or (ii) Holdings, the Borrower or any of their respective
Subsidiaries that, after giving effect to expected insurance proceeds and
indemnity payments, are reasonably likely to have a Material Adverse Effect.
6.5. Use of Proceeds. (a) The proceeds of the Loans made on and
after the Restatement Effective Date shall be utilized to (i) effect the
Acquisition, (ii) to pay certain fees and expenses relating thereto and (iii)
for general corporate and working capital purposes of the Borrower and its
Subsidiaries, including acquisitions permitted hereunder.
(b) No part of the proceeds of any Loan and no Letter of Credit
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Revolving Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions of
Regulations T, U, or X of the Board of Governors of the Federal Reserve System.
6.6. Governmental Approvals. Except for the filing of the
Mortgage Amendments and the filing of the financing statements and continuation
statements and for any other filings, registrations or recordings required under
the Collateral Documents (all of which have been made or will be made as
required), no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance by the Credit Parties of the Credit Documents or (ii)
the legality, validity, binding effect or enforceability of any Credit Document
as against each Credit Party thereto.
6.7. Investment Company Act. None of Holdings, the Borrower or
any of their respective Subsidiaries is registered, or required to register, as
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
6.8. Public Utility Holding Company Act. None of Holdings, the
Borrower or any of their respective Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
6.9. True and Complete Disclosure. All factual information (taken
as a whole) heretofore or contemporaneously furnished by or on behalf of
Holdings or the Borrower in writing to the Agents or any Lender for purposes of
or in connection with this Credit Agreement or any other Credit Document or any
transaction contemplated herein or therein does not, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Holdings
or the Borrower in writing to the Agents or any Lender will not, as of the date
as of which such
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information is dated or certified, contain any untrue statement of a material
fact or omit to state any material fact necessary to make such information
(taken as a whole) not misleading as of such time, in each case in light of the
circumstances under which such information was provided, it being understood and
agreed that for purposes of this Section 6.9, such factual information shall not
include the Projections and pro forma financial information.
6.10. Financial Condition; Financial Statements. (a) On and as of
the Restatement Effective Date on a pro forma basis after giving effect to the
Acquisition and all Indebtedness incurred, and to be incurred, and Liens created
and to be created, by each Credit Party in connection with this Credit
Agreement, (x) the sum of the assets, at a fair valuation, of the Borrower and
its Subsidiaries, taken as a whole, will exceed their debts, (y) the Borrower
and its Subsidiaries, taken as a whole, will not have incurred nor intend to, or
believe that they will, incur debts beyond their ability to pay such debts as
such debts mature and (z) the Borrower does not have unreasonably small capital
with which to conduct its businesses. For purposes of this Section 6.10(a),
"debt" means any reasonably expected liability on a claim, and "claim" means (i)
right to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (ii) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
(b) Holdings' consolidated balance sheet as of, and statements of
operations, shareholder's equity and cash flows and consolidating schedules for
the fiscal years ended December 31, 1997, December 31, 1996 and December 31,
1995 and the unaudited consolidated balance sheets of Holdings and the Borrower
as of, and unaudited statements of operations, shareholder's equity and cash
flows for the six months ended June 30, 1998 in each case furnished to the
Lenders prior to the Restatement Effective Date, present fairly the financial
condition at the respective dates of such balance sheets and results of
operations for the fiscal year. Since December 31, 1997 (and after giving effect
to the Acquisition), nothing has occurred which has had or would be reasonably
likely to result in a Material Adverse Effect.
(c) The Borrower has delivered to the Agents prior to the
Restatement Effective Date copies of SMI's audited financial statements for the
fiscal years ending September 30, 1997 and September 30, 1996, and copies of its
unaudited interim financial statements for the six (6) month period ending March
31, 1998. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied, subject, in the
case of the interim financial statements, to normal year-end adjustments and to
the absence of footnotes. The financial statements of SMI present fairly the
financial condition of SMI as at the dates indicated and the results of its
operations for the periods indicated. The Borrower has delivered to the Agents
prior to the Restatement Effective Date copies of pro forma financial statements
of the six month period ending March 31, 1998, which pro forma financial
statements present fairly in all material respects the financial condition of
SMI as at March 31, 1998, after giving effect to the Permitted Transactions (as
defined in the Acquisition Agreement).
6.11. Locations of Offices, Records, Inventory and Rental
Equipment. The
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address of the principal place of business and chief executive office of each
Credit Party as of the date hereof and as of the Restatement Effective Date is
set forth on Schedule IV. The books and records of each Credit Party, and all
its chattel paper and records of Accounts and Unit Certificates, are, as of the
Restatement Effective Date, maintained exclusively at the respective locations
listed on Schedule IV. As of the Restatement Effective Date, there is no
jurisdiction (or, with respect to the Rental Equipment, State) in which any
Credit Party has any chattel paper, records of Account, Rental Equipment (except
for Rental Equipment in transit) or Unit Certificates other than those
jurisdictions (or States) identified on Schedule IV. Schedule IV also contains a
complete list of the legal names and addresses of each facility or warehouse at
which Rental Equipment is stored as of the date hereof and as of the Restatement
Effective Date. None of the receipts received by the Borrower from any
warehouseman states that the goods covered thereby are to be delivered to bearer
or to the order of a named Person other than the Borrower or to a named Person
and such named Person's assigns.
6.12. Fictitious Business Names. Except as set forth in Schedule
V, none of Holdings, the Borrower or any of their respective Subsidiaries has
used any corporate or fictitious name since May 1, 1992, other than the
corporate name shown on its respective Governing Documents.
6.13. Security Interests. Subject to Sections 11.19, 11.20, and
11.21, on and after the Restatement Effective Date, each of the Collateral
Documents create, as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral, superior to
and prior to the rights of all third persons and subject to no other Liens other
than Liens permitted by Section 8.2. At all times on or after the Restatement
Effective Date, the respective grantor under each Collateral Document shall have
good and marketable title to all the Collateral subject thereto free and clear
of all Liens other than Liens permitted under Section 8.2. No filings or
recordings are required in order to perfect the security interests created under
any Collateral Document except for filings or recordings required pursuant to
the terms of any such Collateral Document.
6.14. Tax Returns and Payments. Each of Holdings, the Borrower
and each of their respective Subsidiaries has timely filed or caused to be
timely filed with the appropriate taxing authority, all federal returns and all
other material returns, statements, forms and reports for taxes required to be
filed by or with respect to the income, properties or operations of Holdings,
the Borrower and/or any of their respective Subsidiaries. Such returns
accurately reflect all liability for taxes of Holdings, the Borrower and their
respective Subsidiaries for the periods covered thereby. Each of Holdings, the
Borrower and each of their respective Subsidiaries has paid all material taxes
payable by it other than taxes which are not due, and other than those contested
in good faith and for which adequate reserves have been established in
accordance with GAAP. Except as set forth on Schedule VI, there is no material
action, suit, proceeding, investigation, audit or claim now pending or, to the
knowledge of Holdings or the Borrower, threatened by any authority regarding any
taxes relating to Holdings, the Borrower or any of their respective
Subsidiaries. As of the Restatement Effective Date, none of Holdings, the
Borrower or any of their respective Subsidiaries has entered into an agreement
or waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the
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payment or collection of material taxes of Holdings, the Borrower or any of
their respective Subsidiaries, or is aware of any circumstances that would cause
the taxable years or other taxable periods of Holdings, the Borrower or any of
their respective Subsidiaries not to be subject to the normally applicable
statute of limitations with respect to any material taxes.
6.15. Compliance with ERISA. (i) Schedule VII identifies each
Plan; each Plan (and each related trust, insurance contract or fund) is in
substantial compliance with its terms and with all applicable laws, including,
without limitation, ERISA and the Code; each Plan (and each related trust, if
any) which is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to the effect
that it meets the requirements of Sections 401(a) and 501(a) of the Code; no
Reportable Event has occurred; no Plan which is a Multiemployer Plan is
insolvent or in reorganization; no Plan subject to Title IV of ERISA has an
Unfunded Current Liability which, when added to the aggregate amount of Unfunded
Current Liabilities with respect to all other Plans subject to Title IV of
ERISA, exceeds $1,000,000; no Plan which is subject to Section 412 of the Code
or Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received a
waiver of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
timely made; neither the Borrower nor any Subsidiary of the Borrower nor any
ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims for
benefits) is pending, expected or, to the best knowledge of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate, threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Borrower and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans
(as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $1,000,000; each group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; no lien
imposed under the Code or ERISA on the assets of the Borrower or any Subsidiary
of the Borrower or any ERISA Affiliate exists or is likely to arise on account
of any Plan and the Borrower and its Subsidiaries do not maintain or contribute
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA or any other applicable
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continuation of coverage laws or regulations) or any Plan the obligations with
respect to which could reasonably be expected to have a Material Adverse Effect
on the ability of the Borrower to perform its obligations under this Credit
Agreement.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither the Borrower nor any of its Subsidiaries has incurred
any obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of the Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
6.16. Subsidiaries. Schedule VIII hereto lists each Subsidiary of
the Borrower, and the direct and indirect ownership interest of the Borrower
therein, in each case existing on the Restatement Effective Date (after giving
effect to the Acquisition). Holdings is the record and beneficial owner of 100%
of the capital stock of the Borrower, and the Borrower is the record and
beneficial owner of 100% of the capital stock of the Unit Subsidiary. On the
Restatement Effective Date, Holdings has no significant assets or liabilities
other than its ownership of the capital stock of the Borrower and any
liabilities directly related thereto, and on such date Holdings owns no other
capital stock of any other Person.
6.17. Intellectual Property; etc. Holdings, the Borrower and each
of their respective Subsidiaries have obtained all material patents, trademarks,
servicemarks, trade names, copyrights, licenses and other rights, free from
burdensome restrictions, that are necessary for the operation of their
respective businesses as presently conducted and as proposed to be conducted.
6.18. Compliance with Statutes, etc. (a) Each of Holdings, the
Borrower and their respective Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such instances of
noncompliance as are not reasonably likely to, in the aggregate, have a Material
Adverse Effect.
(b) Each of Holdings, the Borrower and their respective
Subsidiaries is in compliance with all applicable Environmental Laws governing
its business for which failure to comply is likely to have a Material Adverse
Effect and none of Holdings, the Borrower or any of their respective
Subsidiaries is liable for any material penalties, fines or forfeitures for
failure to comply with such Environmental Laws in the manner set forth above.
All licenses, permits, registrations or approvals required for the business of
Holdings, the Borrower and each of their respective Subsidiaries, as conducted
as of the Restatement Effective Date, under any Environmental Law have been
secured and each of Holdings, the Borrower and their respective Subsidiaries is
in substantial compliance therewith, except such licenses, permits,
registrations or
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approvals, the failure to secure or to comply therewith is not reasonably likely
to have a Material Adverse Effect. None of Holdings, the Borrower or any of
their respective Subsidiaries is in any material respect in noncompliance with,
breach of or default under any applicable writ, order, judgment, injunction, or
decree to which Holdings, the Borrower or any such Subsidiary is a party and
which would materially and adversely affect the ability of Holdings, the
Borrower or any such Subsidiary to operate its business or other Real Property
and no event has occurred and is continuing which, with the passage of time or
the giving of notice or both, would constitute material noncompliance, breach of
or default thereunder, except in each such case, such noncompliance, breaches or
defaults as are not reasonably likely to, in the aggregate, have a Material
Adverse Effect. There are as of the Restatement Effective Date no Environmental
Claims pending or, to the best knowledge of the Borrower, threatened, which
question the validity, term or entitlement of Holdings, the Borrower or any of
their respective Subsidiaries for any permit, license, order or registration
required for the operation of any facility which Holdings, the Borrower or any
of their respective Subsidiaries currently operates. There are no facts,
circumstances, conditions or occurrences concerning the business or operations
of Holdings, the Borrower or any of their respective Subsidiaries, or any Real
Property at any time owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries, or, to the best of their knowledge, on any property
adjoining or adjacent to any such Real Property, that are reasonably expected
(i) to form the basis of a material Environmental Claim against Holdings, the
Borrower or any of their respective Subsidiaries or any currently owned Real
Property of Holdings, the Borrower or any of their respective Subsidiaries, or
(ii) to cause such currently owned Real Property to be subject to any material
restrictions on the ownership, occupancy, use or transferability of such Real
Property under any Environmental Law, except in each such case, such
environmental claims or restrictions that individually, or in the aggregate, are
not reasonably likely to have a Material Adverse Effect.
(c) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, by Holdings, the Borrower
or any of their respective Subsidiaries, any Real Property of Holdings, the
Borrower or any of their respective Subsidiaries or (ii) released or disposed of
on any such Real Property, except Hazardous Materials generated, used, treated
or stored on, or transported to or from, any Real Property of Holdings, the
Borrower or any of their respective Subsidiaries in the ordinary course of
business and in material compliance with Environmental Laws ("Permitted
Materials").
6.19. Properties. Each of Holdings, the Borrower and their
respective Subsidiaries has good title to all material properties (excluding
intellectual property which is covered in Section 6.17) owned by it free and
clear of all Liens, other than as permitted by Section 8.2. Schedule X contains
a true and complete list of each Real Property owned and leased by Holdings, the
Borrower or their respective Subsidiaries on the Restatement Effective Date
(after giving effect to the Acquisition) and the type of interest therein held
by Holdings, the Borrower or such Subsidiary.
6.20. Labor Relations; Collective Bargaining Agreements. (a) Set
forth on Schedule XI hereto is a list (including dates of termination) of all
Collective Bargaining Agreements in effect on the Restatement Effective Date
(after giving effect to the Acquisition).
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(b) None of Holdings, the Borrower nor any of their respective
Subsidiaries is engaged in any unfair labor practice that is likely to have a
Material Adverse Effect. There is (i) no significant unfair labor practice
complaint pending against Holdings, the Borrower or any of their respective
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, before the National Labor Relations Board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is pending on the Restatement Effective Date against
Holdings, the Borrower or any of their respective Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against Holdings, the
Borrower or any of their respective Subsidiaries or, to the best knowledge of
the Borrower, threatened against Holdings, the Borrower or any of their
respective Subsidiaries, except (with respect to any matter specified in clause
(i) and (ii) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.
6.21. Restrictions on Subsidiaries. Except for restrictions
contained in the Credit Documents, the Senior Unsecured Notes Documents and in
agreements with respect to the Existing Indebtedness, as of the Restatement
Effective Date there are no contractual or consensual restrictions on the
Borrower or any of its Subsidiaries which prohibit or otherwise restrict (i) the
transfer of cash or other assets (x) between the Borrower and any of its
Subsidiaries or (y) between any Subsidiaries of the Borrower or (ii) the ability
of the Borrower or any of its Subsidiaries to grant security interests to the
Lenders in the Collateral.
6.22. Status of Accounts. Each Account is based on an actual and
bona fide lease or sale and delivery of goods (including Rental Equipment) or
rendition of services to customers, made by the Borrower and its Subsidiaries in
the ordinary course of its business; the goods, Inventory and Rental Equipment
being sold or leased and the Accounts created are its property and are not and
shall not be subject to any Lien, consignment arrangement, encumbrance, security
interest or financing statement whatsoever other than the Liens created pursuant
to the Collateral Documents and Permitted Liens, and, except as otherwise
reported or reserved against on the Borrower's or its Subsidiaries' books and
records or to the extent excluded from the Borrowing Base, the Borrower's and
its Subsidiaries' customers have accepted the goods or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without any dispute, offset, defense, or counterclaim.
6.23. Material Contracts. Neither Holdings, the Borrower, nor any
of their respective Subsidiaries is in breach of or in default under any
Material Contract.
6.24. Existing Indebtedness and Operating Leases. Schedule III
sets forth a true and complete list of all Existing Indebtedness (excluding any
existing Indebtedness with an aggregate principal amount then outstanding of
less than $1,000,000, so long as the aggregate principal amount of outstanding
Existing Indebtedness excluded pursuant to this parenthetical does not exceed
$4,000,000) and Operating Leases of Holdings, the Borrower and their respective
Subsidiaries as of the Restatement Effective Date (after giving effect to the
Acquisition), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such debt.
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6.25. Consummation of Acquisition; Representations and Warranties
in Acquisition Agreement. (a) The Acquisition has been consummated in all
material respects in accordance with the terms of the relevant Documents
therefor and all applicable laws. At the time of consummation thereof, all
material consents and approvals of, and filings and registrations with, and all
other actions in respect of, all governmental agencies, authorities or
instrumentalities, shareholders, creditors and parties to Material Contracts
required in order to make or consummate the Acquisition in accordance with the
terms of the relevant Documents therefor and all applicable laws have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Acquisition. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon any element of the Acquisition, the occurrence of any Credit
Event, or the performance by Holdings, the Borrower and their Subsidiaries of
their respective obligations under the Documents and all applicable laws.
(b) All representations and warranties by Holdings, the Borrower
and their respective Subsidiaries set forth in the Acquisition Agreement were
true and correct in all material respects at the time as of which such
representations and warranties were made (or deemed made) and shall be true and
correct in all material respects as of the Restatement Effective Date as if such
representations or warranties were made on and as of such date, unless stated to
relate to a specific earlier date, in which case such representations or
warranties shall be true and correct in all material respects as of such earlier
date.
6.26. Guarantee of Certain Notes; Subordinated Guarantor Senior
Indebtedness. (a) No Subsidiary of the Borrower has guaranteed the Senior
Unsecured Notes, other than the Subsidiary Guarantors.
(b) All obligations of the Unit Subsidiary as a Subsidiary
Guarantor (including, without limitation, its guarantee of the principal of,
interest on, and other amounts relating to, both the Outstandings and the Term
Loans incurred hereunder) under the Subsidiary Guaranty constitute "Subordinated
Guarantor Senior Indebtedness" under, and as defined in, the Senior Unsecured
Notes Indenture.
6.27. Custodians. Each of the Custodians under the Custodian
Agreement is an employee of the Borrower in good standing.
6.28. Year 2000. The Borrower's material Information Systems and
Equipment are either Year 2000 Compliant, or any reprogramming, remediation, or
any other corrective action, including the internal testing of all such
Information Systems and Equipment, will be completed by June 30, 1999. Further,
to the extent that such reprogramming/remediation and testing action is
required, the cost thereof, as well as the cost of the reasonably foreseeable
consequences of failure of the Borrower and its Subsidiaries to become Year 2000
Compliant, to the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and the
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failure of other systems or equipment) is not reasonably likely to result in a
Material Adverse Effect.
ARTICLE 7.
Affirmative Covenants
Subject to Sections 11.19 and 11.21, each of Holdings and the
Borrower hereby covenants and agrees that on the Restatement Effective Date and
thereafter, for so long as this Credit Agreement is in effect and until the
Total Commitments have terminated, no Letters of Credit, Term Notes or Revolving
Notes are outstanding and the Revolving Loans, Term Loans and Letter of Credit
Obligations, together with interest, Fees, Expenses and all other Obligations
then due and payable, are paid in full:
7.1. Financial Information. The Borrower shall furnish to the
Lenders the following information within the following time periods:
(a) as soon as available and in any event within 90 days (or 120
days in the case of the item described in clause (B) below only) after
the end of each fiscal year of Holdings or the Borrower, as applicable,
(i) audited Financial Statements as of the close of such fiscal year and
for such fiscal year, together with a comparison to the Financial
Statements for the prior year, in each case accompanied by (A) a report
thereon of the Auditors thereof unqualified as to scope, which report
shall state that such consolidated financial statements fairly present
the consolidated financial position of Holdings and its consolidated
Subsidiaries and the Borrower and its consolidated Subsidiaries, as
applicable, as at the date indicated and the results of their operations
and cash flows for the periods indicated in conformity with GAAP (except
as otherwise stated therein) and that the examination by such Auditors
has been made in accordance with generally accepted auditing standards,
(B) such Auditors' management letter to Holdings or the Borrower, as the
case may be, (C) a written statement signed by the Auditors stating that
in the course of the annual audit of the business of Holdings and its
consolidated Subsidiaries or the Borrower and its consolidated
Subsidiaries, as applicable, which audit was conducted by the Auditors
in accordance with generally accepted auditing standards, such Auditors
have not obtained any knowledge of the existence of any Default or Event
of Default under any provision of Sections 8.4, 8.9, 8.10, 8.11, and
8.18 of this Credit Agreement, or, if such Auditors shall have obtained
from such examination any such knowledge, they shall disclose in such
written statement the existence of the Default or Event of Default and
the nature thereof, it being understood that such Auditors shall not be
required hereunder to perform any special audit procedures and shall
have no liability, directly or indirectly, to anyone for failure to
obtain knowledge of any such Default or Event of Default and (ii) in the
case of the Financial Statements of Holdings, a compliance certificate
signed by its chief executive officer, chief financial officer,
treasurer or controller substantially in the form of Exhibit Q along
with a schedule in form satisfactory to the Administrative Agent of the
calculations used in determining, as
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of the end of such fiscal year, whether the Borrower was in compliance
with the covenants set forth in Articles 7 and 8 of this Credit
Agreement for such year. To the extent that Holdings' or the Borrower's,
as the case may be, annual report on Form 10-K contains any of the
foregoing items, the Lenders will accept Holdings' or the Borrower's, as
the case may be, report on Form 10-K in lieu of such items;
(b) as soon as available and in any event within 45 days after
the end of each fiscal quarter of Holdings or the Borrower, as
applicable, (except the last fiscal quarter of any fiscal year) (i)
Financial Statements as at the end of such period and for the fiscal
year to date, together with a comparison to the Financial Statements for
the same periods in the prior year, all in reasonable detail and duly
certified by the chief executive officer, chief financial officer,
treasurer or controller of Holdings or the Borrower, as applicable, as
having been prepared substantially in accordance with GAAP (subject to
the absence of footnotes and audit and normal year-end adjustments) and
(ii) in the case of the Financial Statements of Holdings, a compliance
certificate signed by its chief executive officer, chief financial
officer, treasurer or controller substantially in the form of Exhibit Q
along with a schedule in form satisfactory to the Administrative Agent
of the calculations used in determining, as of the end of such fiscal
quarter, whether the Borrower was in compliance with the covenants set
forth in Articles 7 and 8 of this Credit Agreement for such quarter. To
the extent that Holdings' or the Borrower's, as the case may be,
quarterly report on Form 10-Q contains any of the foregoing items, the
Lenders will accept Holdings' or the Borrower's, as the case may be,
report on Form 10-Q in lieu of such items;
(c) as soon as available and in any event within 30 days after
the end of each month (except the last month of any fiscal quarter, with
respect to which such reports shall be delivered within 45 days after
the end of the month (other than the last quarter of the fiscal year,
with respect to which such reports shall be delivered within 90 days
after the end of the month)), a consolidated balance sheet for the
Borrower and its consolidated Subsidiaries as at the end of such month
and consolidated statements of operations and cash flows for such month
and for the fiscal year to date, together with a comparison to the
consolidated balance sheet, statement of operations and statement of
cash flows for the same periods in the prior year, all in reasonable
detail and duly certified (subject to the addition of footnotes and
audit and normal year-end adjustments) by the chief executive officer,
chief financial officer, treasurer or controller of the Borrower as
having been prepared substantially in accordance with GAAP;
(d) not later than 60 days after the commencement of each fiscal
year commencing with the fiscal year ending December 31, 1998, monthly
consolidated projections (in substantially the same form as the
Projections) for the Borrower and its Subsidiaries for the following
fiscal year and annual projections for each subsequent fiscal year
through and including the fiscal year in which the Term Loan Maturity
Date occurs;
(e) upon request by the Administrative Agent at any time if a
Default or Event
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of Default shall exist and in any event not later than 12:00 Noon New
York time within 35 days after the last Business Day of each month (or
more frequently if requested by the Administrative Agent in the exercise
of its Permitted Discretion), a Borrowing Base certificate (the
"Borrowing Base Certificate") in substantially the form of Exhibit R,
duly completed, as of the last day of such month (or such other date as
the Administrative Agent may specify in such request) and certified by
the Borrower's chief executive officer, chief financial officer,
treasurer or controller and subject only to adjustment upon completion
of the normal year-end audit. In addition, each Borrowing Base
Certificate shall have attached to it such additional schedules and/or
other information, including monthly aging reports, as the
Administrative Agent may reasonably request;
(f) as soon as possible after the end of each calendar month, but
in any event not later than 30 days after the end of such month (or more
frequently as the Administrative Agent may reasonably request), (A) a
certificate setting forth the Average Rental Rate (excluding Sales-Type
Leases), (B) a certificate setting forth the Average Lease Term and the
detail of the calculation thereof as of the last day of the immediately
preceding fiscal month, (C) a listing of each Lease which has been
terminated or as to which a notice of termination has been received from
or sent to the account debtor and each new Lease entered into by
Borrower or any of its Subsidiaries during the immediately preceding
month setting forth on such listing the name of each such account
debtor, the date of each such Lease, the amount of the contractual
monthly rental and the fixed minimum term thereof, (D) a listing of the
units of Rental Equipment at the branch office locations of Borrower and
each of its Subsidiaries, indicating the units of Rental Equipment at
each branch office location as of the end of the immediately preceding
month, (E) the Utilization as of the end of the immediately preceding
month and the average Utilization for the 13 months then last ended
(calculated by taking the average of the Utilization for each of such 13
months then last ended), and (F) the average age of all Rental Equipment
not constituting storage units (taken as a whole) and the average age of
all Rental Equipment constituting storage units (taken as a whole), in
each case as of the end of the immediately preceding month;
(g) as soon as possible after the end of the second and fourth
fiscal quarters of the Borrower, but in any event not later than the
30th day following the end of the second and fourth fiscal quarters of
the Borrower, a listing of each Lease (by account debtor name, the
number of units of Rental Equipment and location) in effect as of the
last day of the preceding fiscal quarter indicating the number of units
of Rental Equipment subject to such Lease and the location of such
Rental Equipment;
(h) promptly and in any event within five Business Days after
becoming aware of the occurrence of a Default or Event of Default, a
certificate of the chief executive officer or chief financial officer of
the Borrower specifying the nature thereof and the Borrower's proposed
response thereto, each in reasonable detail;
(i) within 30 days after the end of each month (except the last
month of any fiscal quarter, with respect to which such reports shall be
delivered within 45 days after
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the end of the month (other than the last quarter of the fiscal year
with respect to which such reports shall be delivered within 90 days
after the end of the month)), a comparison of consolidated actual
results of operations, cash flow and Capital Expenditures for the
Borrower and its Subsidiaries for such month and for the period from the
beginning of the current fiscal year through the end of such month (i)
with amounts projected for such month and for the period from the
beginning of the current fiscal year through the end of such month
pursuant to the projections delivered pursuant to Section 5.1(q) or, in
the case of any fiscal year commencing after the delivery of projections
pursuant to Section 7.1(d) above, the most recent projections delivered
pursuant to Section 7.1(d);
(j) promptly upon the earlier of the mailing or filing thereof,
copies of all ▇▇-▇▇, ▇▇-▇▇, ▇-▇▇, proxy statements, annual reports,
quarterly reports, registration statements and any other filings or
other communications made by either of Holdings or the Borrower to
holders of its publicly traded securities or the Securities and Exchange
Commission or any successor thereto (the "SEC") from time to time
pursuant to the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended;
(k) promptly and in any event after becoming aware of the
occurrence of any of the following events the Borrower will provide the
Administrative Agent with notice of such event (and copies of relevant
documents if requested):
(i) any Material Contract of Holdings, the Borrower or any
of their respective Subsidiaries is terminated or amended or any
new Material Contract is entered into which is reasonably likely
to have an adverse effect on the Lenders (in which event the
Borrower shall provide the Administrative Agent with a copy of
such Material Contract); or
(ii) any of the material terms (other than price) upon
which material suppliers of the Borrower or any of its
Subsidiaries do business with the Borrower or such Subsidiary are
changed or amended the results of which are reasonably likely to
have an adverse effect on the Lenders; or
(iii) any order, judgment or decree in excess of
$1,000,000 (after reasonably expected insurance and indemnity
recovery) shall have been entered against Holdings, the Borrower
or any of their respective Subsidiaries or any of their
respective properties or assets; or
(iv) any notification of violation of any Requirement of
Law shall have been received by Holdings, the Borrower or any of
their respective Subsidiaries from any Governmental Authority the
results of which are likely to have a Material Adverse Effect;
(l) within 60 days after the end of each fiscal year of Holdings
an update on a desk top basis of the appraisal delivered pursuant to
Section 5.1(u)(ii) by a third party and on a valuation basis acceptable
to the Administrative Agent, provided that, (i) if a Default or an Event
of Default has occurred and is continuing, or (ii) (x) in the event that
the
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gross book value of Rental Equipment constituting storage units is less
than 10% of the gross book value of all Rental Equipment at the time the
certificate required by clause (f) above is required to be delivered,
(A) the average age of all Rental Equipment not constituting storage
units (taken as a whole) shall, at such time, have increased, or (B) the
Average Rental Rate for all Rental Equipment not constituting storage
units shall, at such time, have decreased and (y) in the event that the
gross book value of Rental Equipment constituting storage units is
greater than or equal to 10% of the gross book value of all Rental
Equipment at such time, (i) the average age of (1) all Rental Equipment
constituting storage units (taken as a whole) or (2) all Rental
Equipment not constituting storage units (taken as a whole), shall, at
such time, have increased or (ii) the Average Rental Rate of (1) all
Rental Equipment constituting storage units or (2) all Rental Equipment
not constituting storage equipment shall, at such time, have decreased,
in the case of any of clauses (x) or (y), more than 20% from levels
reported in or as of the last appraisal, the Administrative Agent shall
be permitted to request an update on a physical inspection basis at any
time;
(m) at the request of the Administrative Agent (but, so long as
no Default or Event of Default has occurred and is continuing, in no
event more frequently than semi-annually), an update of the collateral
examination report delivered to the Lenders pursuant to Section
5.1(u)(i) in form and substance reasonably satisfactory to the
Administrative Agent; and
(n) from time to time, such further information, including
customer address list, regarding the Collateral, business affairs and
financial condition of Holdings, the Borrower and/or each of their
respective Subsidiaries as the Administrative Agent may reasonably
request.
7.2. Real Estate Appraisals. In the event that the Administrative
Agent or the Required Lenders at any time after the Restatement Effective Date
determine in its or their good faith discretion (as a result of events or
circumstances affecting the Administrative Agent or the Required Lenders after
the Restatement Effective Date) that real estate appraisals satisfying the
requirements set forth in 12 C.F.R., Part 34-Subpart C, or any successor or
similar statute, rule, regulation, guideline or order (any such appraisal a
"Required Appraisal") are or were required to be obtained, or should be
obtained, in connection with any Mortgaged Property or Mortgaged Properties,
then, within 120 days after receiving written notice thereof from the
Administrative Agent or the Required Lenders, as the case may be, such Required
Appraisals shall be delivered, at the expense of the Borrower, to the
Administrative Agent, which Required Appraisals, and the respective appraiser,
shall be satisfactory to the Administrative Agent.
7.3. Corporate Franchises. Holdings and the Borrower will, and
will cause each of their respective Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence,
material rights and authority to do business, provided that (i) the Mobile Field
Office Liquidation, (ii) any dissolution of SMI (provided that all of SMI's
assets shall be distributed concurrently to the Borrower or the Unit Subsidiary)
effected in accordance with the requirements of Section 8.1(h) and (iii) any
other transaction permitted by
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Section 8.1 will not constitute a breach of this Section 7.3, and provided
further that Holdings shall not be required to preserve, with respect to itself,
any material right or authority to do business and with respect to the Borrower,
any of the Borrower's Subsidiaries, or any of Holdings' Subsidiaries, any such
existence, material right or authority to do business if Holdings shall
reasonably determine that such preservation is no longer desirable in the
ordinary course of business, and the loss thereof shall not be reasonably likely
to have a Material Adverse Effect.
7.4. Compliance with Statutes, etc. (a) Holdings and the Borrower
will, and will cause each of their respective Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
Environmental Laws) except to the extent non-compliance (individually or in the
aggregate) would not reasonably be expected to have a Material Adverse Effect.
None of Holdings, the Borrower or any of their respective Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any of
its Real Property, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, except to the extent the failure to
comply with the foregoing requirements, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. If required
to do so under any applicable Environmental Law, Holdings and the Borrower agree
to undertake, and agree to cause each of their respective Subsidiaries to
undertake, any cleanup, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property in accordance with,
in all material respects, the requirements of all such applicable Environmental
Laws and in accordance with, in all material respects, all applicable orders and
directives of all governmental authorities; provided that none of Holdings, the
Borrower or any of their respective Subsidiaries shall be required to take any
such action where same is being contested by appropriate legal proceedings in
good faith by Holdings, the Borrower or such Subsidiary.
(b) At the request of the Administrative Agent or the Required
Lenders at any time and from time to time when an Event of Default has occurred
and is continuing, but in any event no more frequently than once a year, the
Borrower will provide, at the Borrower's sole cost and expense, an environmental
site assessment report or update concerning any Real Property of Holdings, the
Borrower or any of their respective Subsidiaries, prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, indicating
the presence or release of Hazardous Materials and the potential cost of any
removal or remedial action in connection with any Hazardous Materials on such
Real Property; provided, however, no such request may be made unless the
Administrative Agent or the Required Lenders reasonably believe that (i)
Holdings, the Borrower or any of their respective Subsidiaries is in material
noncompliance with any Environmental Law with respect to such Real Property and
such noncompliance is reasonably likely to result in a liability of the Borrower
in excess of $1,000,000 (after expected insurance and indemnity recovery) in the
aggregate or (ii) an Event of Default is in existence. If the Borrower fails to
provide the same after 60 days' written notice, the Administrative Agent may
order the same, and Holdings and/or the Borrower shall grant and hereby grants
to the Administrative Agent and the Lenders and their agents access to such Real
Property at all reasonable times and without unreasonably interfering with the
Borrower's
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operations and specifically grants the Administrative Agent and the Lenders an
irrevocable nonexclusive license, subject to the rights of tenants, to undertake
such an assessment all at the Borrower's sole expense.
7.5. ERISA. As soon as possible and, in any event, within twenty
days after Holdings, the Borrower, any of their respective Subsidiaries or any
ERISA Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to the Administrative Agent a certificate
of the chief financial officer of the Borrower setting forth the full details as
to such occurrence and the action, if any, that Holdings, the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by
Holdings, the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred (except to the extent that the Borrower has previously
delivered to the Lenders a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following thirty days; that an accumulated funding deficiency, within the
meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or
an application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be reasonably expected to be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan subject to Title IV of ERISA has an Unfunded Current Liability which, when
added to the aggregate amount of Unfunded Current Liabilities with respect to
all other Plans subject to Title IV of ERISA, exceeds the aggregate amount of
such Unfunded Current Liabilities that existed on the Restatement Effective Date
by $250,000; that proceedings may be or have been instituted to terminate a Plan
or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that Holdings, the Borrower, any of
their respective Subsidiaries or any ERISA Affiliate will or may be reasonably
expected to incur any material liability (including any indirect, contingent, or
secondary liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that Holdings, the Borrower or any of their
respective Subsidiaries may be reasonably expected to incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA or any other
applicable continuation of coverage laws or regulations) or any Plan or any
Foreign Pension Plan in addition to the liability that existed on the
Restatement Effective Date to any such plan or plans. The Borrower
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will deliver to each of the Lenders (i) a complete copy of the annual report (on
Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service and (ii) copies of any material
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any material notices received by
Holdings, the Borrower, any of their respective Subsidiaries or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered to
the Lenders no later than ten days after the date such annual report has been
filed with the Internal Revenue Service or such records, documents and/or
information has been furnished to the PBGC or such notice has been received by
Holdings, the Borrower, such Subsidiary or the ERISA Affiliate, as applicable.
7.6. Good Repair. Each of Holdings and the Borrower will, and
will cause each of their respective Subsidiaries to, use its best efforts to
provide that its material properties and equipment used or useful in its
business (including Rental Equipment) in whomsoever's possession they may be,
are kept in good repair, working order and condition, normal wear and tear
excepted and, subject to Section 8.4, that from time to time there are made in
such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto.
7.7. Books and Records. Each of Holdings and the Borrower agree
to maintain, and to cause each of their respective Subsidiaries to maintain,
books and records pertaining to the Collateral in such detail, form and scope as
is consistent with good business practice, and agrees that such books and
records will reflect the Lenders' interest in its Accounts. Holdings and the
Borrower agree that the Collateral Agent or its agents may enter upon the
premises of Holdings, the Borrower or any of their respective Subsidiaries at
any time and from time to time, during normal business hours and upon reasonable
notice under the circumstances, and at any time at all during the continuance of
an Event of Default, for the purposes of (i) inspecting the Collateral, (ii)
inspecting and/or copying (at the Borrower's expense) any and all records
pertaining thereto, (iii) discussing the affairs, finances and business of
Holdings or the Borrower with any officers, employees and directors of Holdings
or the Borrower or with Auditors (it being understood that Holdings or the
Borrower shall be entitled to have a representative present at any such
discussions) and (iv) verifying Eligible Accounts Receivable and/or Eligible
Rental Equipment. The Borrower shall give the Collateral Agent fifteen days
prior written notice of any change in the location of any facility owned or
leased by Holdings or the Borrower or any of their respective Subsidiaries where
Collateral is located or in the location of its chief executive office or place
of business from the locations specified in Schedule IV, and to execute in
advance of such change, cause to be filed and/or delivered to the Collateral
Agent any financing statements, Collateral Access Agreements or other documents
required by the Administrative Agent, all in form and substance reasonably
satisfactory to the Administrative Agent. The Borrower agrees to advise the
Administrative Agent promptly, in sufficient detail, of any substantial change
relating to the type, quantity or quality of more than 10% (measured by net book
value) of the Collateral,
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or any event (other than a change in price) which could have a material adverse
effect on the value of more than 10% (measured by net book value) of the
Collateral or on the security interests granted to the Collateral Agent, on
behalf of the Lenders therein.
7.8. Collateral Records. Each of Holdings and the Borrower agree
to execute and deliver, and to cause each of their respective Subsidiaries to
execute and deliver, to the Collateral Agent, from time to time, solely for the
Collateral Agent's convenience in maintaining a record of the Collateral, such
written statements and schedules as the Collateral Agent may reasonably require,
including, without limitation, those described in Section 7.1 of this Credit
Agreement, designating, identifying or describing the Collateral pledged or
granted to the Lenders under the Collateral Documents. The failure by Holdings,
the Borrower or any of their respective Subsidiaries, however, to promptly give
the Collateral Agent such statements or schedules shall not affect, diminish,
modify or otherwise limit the Lenders' security interests in the Collateral.
7.9. Security Interests. Each of Holdings and the Borrower shall,
and shall cause each of their respective Subsidiaries to, defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein other than claims or demands pursuant to the Credit
Documents and subject to the terms of Intercreditor Agreement, the Bailee
Agreement and the Custodian Agreement. Subject to Sections 11.19, 11.20 and
11.21, Holdings and the Borrower shall comply, and shall cause each of their
respective Subsidiaries to comply, with the requirements of all state and
federal laws in order to grant to the Lenders valid and perfected first priority
security interests in the Collateral, subject to Existing Liens and to any other
Permitted Liens which pursuant to operation of law are prior to the perfected
security interests created hereunder. The Collateral Agent is hereby authorized
by Holdings and the Borrower to file any UCC financing statements covering the
Collateral whether or not the signatures of Holdings or the Borrower appears
thereon.
7.10. Insurance; Casualty Loss. Schedule XII hereto sets forth a
true and complete listing of all insurance maintained by Holdings, the Borrower
and each of their respective Subsidiaries as of the Restatement Effective Date.
Holdings and the Borrower agree to maintain, and to cause each of their
respective Subsidiaries to maintain, public liability insurance, third party
property damage insurance and replacement value (or such higher coverage as
Holdings may obtain) insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts and covering such
risks in at least such amounts and against at least such risks as are described
on Schedule XII or, with respect to any lesser coverages (whether as to the
amount or scope of coverage), as are at all times satisfactory to the
Administrative Agent in its commercially reasonable judgment. All policies
covering the Collateral are to name the Collateral Agent as an additional
insured and the Collateral Agent as loss payee in case of loss, as its interests
may appear, and are to contain such other provisions as the Administrative Agent
may reasonably require to fully protect the Lenders' interest in the Collateral
and to any payments to be made under such policies. The Borrower shall provide
written notice to the Administrative Agent of the occurrence of any of the
following events within ten Business Days after the occurrence of such event:
any Collateral is (i) damaged or destroyed, or suffers any other loss, or (ii)
condemned, confiscated or otherwise taken, in whole or in part, or the use
thereof is otherwise diminished so as to render impracticable or
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unreasonable the use of such Collateral or to materially diminish its
marketability, and in either case either (x) a Default or an Event of Default
has occurred and is continuing or (y) the amount of the damage, destruction,
loss or diminution in value is in excess of $2,000,000 (collectively, a
"Casualty Loss"); provided that no notice shall be required in the event that
(x) no Default or Event of Default has occurred and is continuing and (y) the
amount of the damage, destruction, loss or diminution in value is less than or
equal to $2,000,000 in which case, the Borrower may, in its sole discretion,
either apply such amounts (x) to the payment of the outstanding Revolving Loans
or (y) to purchase other assets of the same or similar type as those for which
the Borrower received such insurance proceeds. Holdings, the Borrower and/or the
respective Subsidiary shall diligently file and prosecute their claim or claims
for any award or payment in connection with a Casualty Loss. In the event of a
Casualty Loss, Holdings shall pay to the Collateral Agent, promptly upon receipt
thereof, any and all net insurance proceeds and payments received by Holdings,
the Borrower or any of their respective Subsidiaries on account of damage,
destruction, loss, condemnation or eminent domain proceedings, whereupon the
Collateral Agent shall, at the election of the Borrower (unless a Default or
Event of Default shall have occurred and be continuing in which case such
election shall be made by the Required Lenders, in their sole discretion),
either (a) apply the proceeds realized from Casualty Losses to payment of
accrued and unpaid interest or outstanding principal under the Revolving Loans
or (b) pay such proceeds to Holdings or the Borrower to be used to repair or
replace the Collateral that was the subject of the Casualty Loss. After the
occurrence and during the continuance of an Event of Default, (i) no settlement
on account of any such Casualty Loss shall be made without the consent of the
Collateral Agent and (ii) the Collateral Agent may participate in any such
proceedings and the Borrower shall deliver to the Collateral Agent such
documents as may be requested by the Collateral Agent to permit such
participation and shall consult with the Collateral Agent, its attorneys and
agents in the making and prosecution of such claim or claims. Each of Holdings
and the Borrower hereby irrevocably authorizes and appoints the Collateral Agent
its attorney-in-fact, after the occurrence and during the continuance of an
Event of Default, to collect and receive for any such award or payment and to
file and prosecute such claim or claims, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest, and each of
Holdings and the Borrower shall, upon demand of the Collateral Agent, make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning any such award or payment to the Collateral Agent for
the benefit of the Lenders, free and clear of any encumbrances of any kind or
nature whatsoever, other than the right of Holdings or the Borrower to any
insurance proceeds remaining after application thereof by the Collateral Agent
as provided in this Section 7.10.
7.11. Taxes. Holdings and the Borrower will, and will cause each
of their respective Subsidiaries to, pay and discharge all federal income and
other material taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to it,
or payable by it pursuant to the Tax Sharing Agreements, in each case on a
timely basis, and all lawful claims which, if unpaid, might become a Lien or
charge upon any properties of Holdings, the Borrower or of any of their
respective Subsidiaries; provided, that neither Holdings, the Borrower nor any
of their respective Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good faith
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judgment of the management of such Person) with respect thereto in accordance
with GAAP.
7.12. End of Fiscal Years; Fiscal Quarters. Each of Holdings and
the Borrower will, for financial reporting purposes, cause (i) each of their,
and each of their respective Subsidiaries', fiscal years to end on December 31
of each year and (ii) each of their and each of their respective Subsidiaries',
fiscal quarters to end on dates consistent therewith (it being understood and
agreed that, prior to the Restatement Effective Date, SMI has a fiscal year
which ends on September 30 of each year and that SMI may either retain such
fiscal year end or change its fiscal year end to December 31 of each year).
7.13. Further Assurances. Holdings and the Borrower shall take,
and shall cause each of their respective Subsidiaries to take, all such further
actions and execute all such further documents and instruments as the Collateral
Agent may at any time reasonably determine to be necessary or desirable to
further carry out and consummate the transactions contemplated by the Credit
Documents, to cause the execution, delivery and performance of the Credit
Documents to be duly authorized and to perfect or protect the Liens (and the
priority status thereof) of the Collateral Agent on the Collateral including,
without limitation, (i) filing notices of liens, UCC financing statements and
amendments, renewals and continuations thereof, (ii) obtaining, providing or
making notations of security interests upon Unit Certificates, (iii) cooperating
with the Collateral Agent's representatives, keeping stock records, obtaining
waivers from landlords and from warehousemen and their landlords, (iv) paying
claims which might, if unpaid, become a Lien on the Collateral other than a
Permitted Lien and (v) stamping all Certificates (as defined in the Custodian
Agreement) relating to the Non-Qualified Units (x) with a legend as required by
the Custodian Agreement and (y) to indicate the transfer of the ownership
thereof to the Unit Subsidiary. Furthermore, Holdings and the Borrower shall
cause to be delivered to the Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by the
Collateral Agent to assure itself that this Section 7.13 has been complied with.
Notwithstanding anything to the contrary contained in this Section 7.13, the
Collateral Agent shall not (except in the circumstances described in the second
and third sentences of Section 11.19) request that the Borrower obtain or
provide any Unit Certificates with respect to any Non-Qualified Units unless an
Event of Default has occurred and is continuing; provided that if any Unit
Certificates are obtained, a notation of the Collateral Agent's security
interest shall be made thereon as required by Section 7.18(b). All actions
required to be taken pursuant to this Section 7.13, as well as pursuant to
Sections 11.19 and 11.21, shall be at the cost and expense of the Borrower.
7.14. Maintenance of Separateness. Each Credit Party will, and
will cause each of its Subsidiaries to, satisfy customary corporate and
organizational formalities, including the holding of regular board of directors'
and shareholders' meetings or action by directors or shareholders without a
meeting and the maintenance of corporate offices and records. The Credit Parties
shall take all actions as may be required (x) to establish and maintain an
executive committee for the Unit Subsidiary and (y) so that at least one member
of the executive committee is not and, during the one-year period immediately
preceding the time of initial appointment, was not an employee, officer,
director, shareholder, or partner of the Borrower or any of its Affiliates. In
dealing with their respective creditors, none of Holdings, the Borrower or any
of their
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respective Subsidiaries shall act in a manner which would cause its creditors to
believe that any such Person was not a separate corporate entity from the other
such Persons. Without limiting the foregoing, the consolidated financial
statements of each of Holdings and the Borrower shall, through appropriate
footnote disclosure, indicate the assets from time to time held by the Unit
Subsidiary, as opposed to Holdings or the Borrower, as the case may be, and its
other Subsidiaries. Finally, from and after the Original Effective Date, no
Credit Party nor any of its Subsidiaries shall take any action, or conduct its
affairs in a manner, which would be reasonably likely to result in the separate
existence of the Unit Subsidiary being ignored, or in the assets and liabilities
of the Unit Subsidiary being substantively consolidated with those of any of
Holdings, the Borrower or any of their respective Subsidiaries (other than the
Unit Subsidiary) in a bankruptcy, reorganization or other insolvency proceeding.
7.15. Collateral Access Agreements. If, on the Restatement
Effective Date, the Borrower shall fail to provide the Administrative Agent with
Collateral Access Agreements with respect to all of the Rental Equipment
locations as required under Section 5.1(e) (whether or not available on the
Restatement Effective Date), the Borrower shall exercise reasonable good faith
efforts to obtain and deliver to the Administrative Agent, within 90 days of the
Restatement Effective Date, those Collateral Access Agreements with respect to
the Rental Equipment locations for which no Collateral Access Agreement was
delivered to the Administrative Agent on the Restatement Effective Date.
Furthermore, the Borrower shall exercise reasonable good faith efforts to obtain
and deliver to the Administrative Agent such other Collateral Access Agreements
as may be requested by the Administrative Agent from time to time (such
Collateral Access Agreements to be so delivered to the Administrative Agent
promptly upon request and in any event, within 60 days after the respective
request has been made); provided that, notwithstanding the foregoing, the
Borrower, in obtaining the Collateral Access Agreements required under this
Section 7.15, shall not be obligated to make significant payments to landlords
or alter the respective lease terms with respect to any Rental Equipment
locations in any way which is materially adverse to the Borrower.
7.16. New Subsidiaries. To the extent the Borrower creates or
acquires any Wholly-Owned Subsidiary after the Restatement Effective Date in
accordance with the other provisions of this Credit Agreement, each such
Wholly-Owned Subsidiary shall be required to become a party to the Subsidiaries
Guaranty by executing a counterpart thereof or enter into an amendment thereto
satisfactory to the Administrative Agent and, if requested by the Administrative
Agent or the Required Lenders, shall be required to enter into the Collateral
Documents entered into by the entities which were Subsidiary Guarantors on the
Restatement Effective Date, in each case by entering into counterparts thereof
or amendments thereto, in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent. In connection with the foregoing,
to the extent requested by the Administrative Agent and the Collateral Agent,
the Borrower shall be required to cause to be delivered such relevant
documentation (including opinions of counsel) of the type described in Section
5.1 as the respective Subsidiary would have delivered if it were a Credit Party
on the Restatement Effective Date. Notwithstanding anything to the contrary
contained above, the actions described above may at the option of the Borrower
be, but shall not be required to be, taken with respect to the Canadian
Subsidiary so long as same is established in accordance with the last sentence
of
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Section 8.11.
7.17. Permitted Acquisitions. (a) Subject to the provisions of
this Section 7.17 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and its Subsidiaries (other than the Unit Subsidiary)
may from time to time after the Restatement Effective Date effect Permitted
Acquisitions, so long as (in each case except to the extent the Required Lenders
otherwise specifically agree in writing in the case of a specific Permitted
Acquisition): (i) no Default or Event of Default shall be in existence at the
time of the consummation of the proposed Permitted Acquisition or immediately
after giving effect thereto; (ii) the Borrower shall have given the
Administrative Agent at least 10 Business Days' prior written notice of any
Permitted Acquisition; (iii) calculations are made by the Borrower of compliance
with the covenants contained in Sections 8.9 and 8.10 for the period of four
consecutive fiscal quarters (taken as one accounting period) most recently ended
prior to the date of such Permitted Acquisition (each, a "Calculation Period"),
on a pro forma basis as if the respective Permitted Acquisition (as well as all
other Permitted Acquisitions theretofor consummated after the first day of such
Calculation Period) had occurred on the first day of such Calculation Period,
and such recalculations shall show that such financial covenants would have been
complied with if the Permitted Acquisition had occurred on the first day of such
Calculation Period (for this purpose, if the first day of the respective
Calculation Period occurs prior to the Original Effective Date, calculated as if
the covenants contained in said Sections 8.9 and 8.10 had been applicable from
the first day of the Calculation Period); (iv) the Borrower shall certify, and
the Administrative Agent shall have been satisfied in its reasonable discretion
that, to the best of the Borrower's knowledge, the proposed Permitted
Acquisition could not reasonably be expected to result in materially increased
tax, ERISA, environmental or other contingent liabilities with respect to
Holdings, the Borrower or any of their respective Subsidiaries; (v) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of such Permitted Acquisition (both before and after giving effect
thereto), unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date; (vi) the Borrower provides to the
Administrative Agent and the Lenders as soon as available but not later than
five Business Days after the execution thereof, a copy of any executed purchase
agreement or similar agreement with respect to such Permitted Acquisition; (vii)
the aggregate amount invested in all such Permitted Acquisitions occurring on or
after the Restatement Effective Date shall not exceed $25,000,000; and (viii)
the Borrower shall have delivered to the Administrative Agent an officer's
certificate executed by the chief executive officer or chief financial officer
of the Borrower, certifying to the best of his knowledge, compliance with the
requirements of preceding clauses (i) through (v), inclusive and (vii)
containing the calculations required by the preceding clauses (iii) and (vii).
(b) At the time of each Permitted Acquisition (x) involving the
creation or acquisition of a Subsidiary, or the acquisition of capital stock or
other equity interest of any Person, all capital stock or other equity interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to the Pledge
Agreement and/or (y) involving the acquisition of any Units (as defined in the
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Security Agreement), whether directly or by the acquisition of a Subsidiary
which owns such Units, the provisions of Section 7.18 shall be complied with at
the time of the consummation of the respective Permitted Acquisition.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and
to execute and deliver, all of the documentation required by, Section 7.16, to
the satisfaction of the Administrative Agent.
7.18. Unit Subsidiary; Provisions Relating to Units; etc. (a)
Holdings and the Borrower shall at all times cause the Unit Subsidiary to be a
Wholly-Owned Subsidiary of the Borrower. Each of Holdings and the Borrower shall
take all action so that all Non-Qualified Units (including, without limitation,
those acquired in connection with the Acquisition) at any time owned or acquired
by Holdings, the Borrower or any of their respective Subsidiaries (other than
the Unit Subsidiary) are (or have been) on or prior to the Restatement Effective
Date (or, if acquired thereafter, within five Business Days after the end of the
month in which such acquisition occurred) contributed as a capital contribution
to the equity of the Unit Subsidiary; provided that, notwithstanding the
foregoing to the contrary, Non-Qualified Units acquired in connection with the
Acquisition shall be required to be so contributed within 60 days after the
Restatement Effective Date. As a result of the requirements of the immediately
preceding sentence, all Non-Qualified Units at any time held by Holdings or the
Borrower and their respective Subsidiaries shall be transferred to the Unit
Subsidiary, which shall be the exclusive owner thereof.
(b) With respect to all Certificated Units at any time held by
Holdings, the Borrower or any of their Subsidiaries (other than any Certificated
Units with respect to which the opinions, satisfactory to the Administrative
Agent, required by Section 5.1(d)(C)(y) have been provided), Holdings and the
Borrower shall take, or cause to be taken, all action as is necessary so that,
in any event within 30 days after the Original Effective Date (or within 30 days
(or, in the case of Certificated Units acquired pursuant to the Acquisition, 60
days) after any subsequent acquisition of Certificated Units) the security
interest of the Collateral Agent therein is noted on the certificate of title
issued with respect to the respective Unit (as defined in the Security
Agreement).
ARTICLE 8.
Negative Covenants
Subject to Sections 11.19 and 11.21, each of Holdings and the
Borrower hereby covenants and agrees that as of the Restatement Effective Date,
and thereafter, for so long as this Credit Agreement is in effect and until the
Total Commitments have terminated, no Letter of Credit, Term Notes or Revolving
Notes are outstanding and the Revolving Loans and Letter of Credit Obligations,
together with interest, Fees, Expenses and all other Obligations then due and
payable are paid in full:
8.1. Consolidation, Merger, Sale or Purchase of Assets, etc.
Holdings and the
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Borrower will not, and will not permit any of their respective Subsidiaries to,
wind up, liquidate or dissolve its affairs, or enter into any transaction of
merger or consolidation, sell or otherwise dispose of all or any part of its
property or assets or purchase, lease or otherwise acquire (in one transaction
or a series of related transactions) all or any part of the property or assets
of any Person or agree to do any of the foregoing at any future time, except
that the following shall also be permitted:
(a) Capital Expenditures (including the purchase of assets in the
form of additional Rental Equipment) to the extent within the
limitations set forth in Section 8.4;
(b) the investments, acquisitions and transfers or dispositions
of properties permitted pursuant to Section 8.5;
(c) any Subsidiary of the Borrower (excluding the Unit
Subsidiary) may be merged or consolidated with or into, or be liquidated
into, the Borrower or any other Wholly-Owned Subsidiary of the Borrower
(so long as the Borrower or any other Wholly-Owned Subsidiary of the
Borrower is the surviving corporation), or all or any part of the
business, properties and assets of any Subsidiary (excluding the Unit
Subsidiary) may be conveyed, leased, sold or transferred to the Borrower
or any other Wholly-Owned Subsidiary of the Borrower;
(d) the Permitted Sale-Leaseback Transactions shall be permitted
so long as (i) no Default or Event of Default is then in existence or
would result thereby, (ii) the Net Sale Proceeds therefrom are applied
as provided in Section 2.5(k) and (iii) the lease obligations created
thereby are otherwise permitted under this Credit Agreement;
(e) the sale, lease or disposal in the ordinary course of
business of Inventory and Rental Equipment and the purchase, lease or
other acquisition of equipment, Inventory and Rental Equipment in the
ordinary course of business;
(f) the sale or other disposition of obsolete or excess equipment
in the ordinary course of business and the purchase of equipment in the
ordinary course of business;
(g) operating leases (and other leases or subleases) of property
entered into or terminated in the ordinary course of business; provided
that to the extent that any such lease or sublease, as the case may be,
constitutes a Capital Lease, such lease or sublease, as the case may be,
shall be permitted to be entered into under this Section 8.1(g) only if
also permitted to be entered into under Section 8.3(b);
(h) the Mobile Field Office Liquidation and, so long as no
Default or Event of Default is in existence or would exist immediately
after giving effect thereto, any dissolution of SMI (provided that all
of SMI's assets shall be distributed to the Borrower or the Unit
Subsidiary in connection therewith and all UCC filings required to be
made to maintain the perfection and priority of the security interests
in the assets of SMI created pursuant to the Security Agreement shall
have been made) shall be permitted;
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(i) the Master Lease Agreements may be entered into pursuant to
Section 5.1(cc);
(j) the sale or return of automobiles and trucks which the
Borrower and its Subsidiaries customarily replace periodically with
substitute automobiles and trucks in the ordinary course of business;
(k) the Borrower or any Subsidiary may, in the ordinary course of
business, enter into licensing agreements with Persons for the use of
intellectual property or other intangible assets, and settlements,
permissions, consents to use, and similar arrangements concerning
intellectual property or other intangible assets, so long as the
Borrower or such Subsidiary uses reasonable commercial efforts to
procure that each such license or other agreements is permitted to be
assigned pursuant to the Security Agreement and does not otherwise
prohibit the granting of Lien therein by any Credit Party pursuant to
the Security Agreement; provided that notwithstanding anything to the
contrary set forth in this Section 8.1(k), the Borrower shall be
permitted to enter into the Trade Name License Agreement;
(l) the abandonment or other disposition of intellectual property
and other property that is, in the reasonable judgment of the Person
owning such intellectual property and other property, no longer
economically practicable to maintain or useful in the conduct of the
business of such Person;
(m) the sale of (i) approximately 6.6 acres located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (ii) approximately 7 acres located at
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, (▇▇▇) approximately
6.2 acres located at 525 Hurricane Schoals Road, Lawrenceville, Georgia,
(iv) approximately 10 acres located at lot ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, (v) approximately 7 acres located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (vi) approximately 5 acres located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and (vii) approximately 33 acres
located at North East Property, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇;
(n) in connection with the sale of any Rental Equipment to a
third party as permitted by clause (e) above, the sale of Leases and
conditional sales contracts relating to such Rental Equipment, in each
case, in the ordinary course of business for fair market value to third
parties; provided, that in no event is any such sale with any recourse
to the Seller except for usual and customary warranties in connection
with the sale of the respective Rental Equipment;
(o) any Permitted Acquisitions (so long as the applicable
requirements set forth in the definition of "Permitted Acquisitions" and
in Section 7.17 are satisfied) and the Acquisition shall be permitted;
and
(p) sales or other dispositions of assets, in addition to the
sales or dispositions permitted by the foregoing clauses (a) through
(o), for fair market value not to exceed $3,000,000 per fiscal year but
not more than $15,000,000 in the aggregate since the
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Original Effective Date; provided, however, that the Net Sale Proceeds
therefrom are applied to the repayment of the Loans as specified in
Section 2.5(k).
Notwithstanding anything to the contrary contained above, (x) in no event shall
Holdings or the Borrower sell or otherwise dispose of any of their interests in
any Subsidiary except as expressly permitted pursuant to preceding Sections
8.1(c) and (h), (y) in no event shall the Unit Subsidiary be merged with or into
or consolidated with or into any other Person or be liquidated and (z) in no
event shall the Unit Subsidiary transfer any Non-Qualified Units or any interest
therein (except for the lease thereof pursuant to the Master Lease Agreements)
to Holdings, the Borrower or any other Subsidiary of the Borrower. To the extent
the Required Lenders (and the Requisite Lenders) waive the provisions of this
Section 8.1 with respect to the sale of any Collateral, or any Collateral is
sold as permitted by this Section 8.1, such Collateral in each case (so long as
the Collateral is not being transferred to Holdings, the Borrower or any of
their respective Subsidiaries) shall be sold free and clear of the Liens in
favor of the Collateral Agent and the Lenders created by the Collateral
Documents and the Collateral Agent shall take such actions as it deems
appropriate in connection therewith or may be reasonably requested by the
Borrower to evidence such Lien release, in each case at the Borrower's expense.
8.2. Liens. Holdings and the Borrower will not, and will not
permit any of their respective Subsidiaries to, create, incur, assume or suffer
to exist any Lien upon or with respect to (i) the capital stock of the Borrower
or (ii) any property or assets of any kind (real or personal, tangible or
intangible) of Holdings, the Borrower or any of their respective Subsidiaries,
whether now owned or hereafter acquired, or sell any such property or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of accounts receivable or notes with
recourse to Holdings, the Borrower or any of their respective Subsidiaries) or
assign any right to receive income, or file or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute (other than precautionary filings covering
leases of equipment), except Liens, sales and assignments described below
(herein referred to as "Permitted Liens"):
(a) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without
penalty or that are not yet due and payable or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(b) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law or which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' Liens, statutory landlord's Liens, Liens in favor of customs
and revenue authorities to secure payment of customs duties in
connection with the importation of goods, and other similar Liens
arising in the ordinary course of business, and (x) which, if any such
property or asset is material, do not in the aggregate materially
detract from the value of such property or assets or materially impair
the use thereof in the operation of the business of the Borrower or such
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which
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proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien;
(c) Liens created by or pursuant to this Credit Agreement or the
other Credit Documents;
(d) Liens existing on the Restatement Effective Date and listed
on Schedule XIII hereto and renewals and extensions thereof so long as
the principal amount of the Indebtedness secured thereby is not
increased and no additional assets are encumbered thereby ("Existing
Liens");
(e) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (x) in connection with
liability insurance, workers' compensation, unemployment insurance and
other types of social security, or (y) to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business, in an
aggregate amount (in the case of this clause (y)) not to exceed
$2,500,000 (exclusive of obligations (i) in respect of borrowed money or
(ii) in respect of which a Letter of Credit has been issued);
(f) leases or subleases granted to third Persons not interfering
with the ordinary course of business of the Borrower or any of its
Subsidiaries;
(g) Capital Leases to the extent permitted under Section 8.3(b);
(h) Liens (x) arising pursuant to purchase money mortgages
securing Indebtedness representing the purchase price (or financing of
the purchase price within 180 days after the respective purchase) of
property or other assets acquired by the Borrower or any Subsidiary, and
any extensions, renewals or replacements of such Liens, provided that
(i) any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien does not exceed 100% of the
purchase price of the assets being purchased and (iii) the Indebtedness
secured thereby or any refinancing thereof is permitted by Section
8.3(b); or (y) existing on specific tangible assets at the time acquired
by the Borrower or any Subsidiary or on assets of a Person at the time
such Person first becomes a Subsidiary or was merged into the Borrower
or any Subsidiary; provided, that (i) any such Liens were not created at
the time of or in contemplation of the acquisition of such assets or
Person by the Borrower or such Subsidiary, (ii) in the case of any such
acquisition of a Person, any such Lien attaches only to specific
tangible assets of such Person and not assets of such Person generally
and (iii) the Indebtedness secured thereby or any refinancing thereof is
permitted by Section 8.3(b);
(i) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering in any material respect with the
business of the Borrower and its Subsidiaries;
(j) Liens created under ERISA and under Environmental Laws that
are being
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contested in good faith and as to which adequate reserves have been
established to the extent required by GAAP and secure obligations not in
excess of $2,500,000 in the aggregate;
(k) Permitted Encumbrances;
(l) Liens other than those described in the preceding clauses (a)
through (k) so long as neither (x) the aggregate amount of obligations
at any time secured thereby, nor (y) the aggregate fair market value of
the assets subject thereto, exceeds $2,500,000 at any time;
(m) Permitted Sale-Lease Back transactions so long as such
transactions comply with Section 8.1(d);
(n) any attachment or judgment Lien securing assets with a value
less than $1,000,000 not constituting an Event of Default under Section
9.1(h) that is being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with
GAAP;
(o) the leasehold interests of customers in Rental Equipment, in
each case to the extent the respective lease is entered into by the
Borrower or its respective Subsidiary in the ordinary course of its
business and is not pursuant to a sale-leaseback or similar financing
transaction; and
(p) the Borrower and its Subsidiaries may enter into the Deposit
Account Agreement in the form of Exhibit M and additional Deposit
Account Agreements in substantially the same form with respect to any
additional Collection Account or Concentration Account entered into in
accordance with the terms of this Credit Agreement.
8.3. Indebtedness. Holdings and the Borrower will not, and will
not permit any of their respective Subsidiaries to, contract, create, incur,
assume or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Credit Agreement and
the other Credit Documents;
(b) Capitalized Lease Obligations and Indebtedness of the
Borrower secured by Liens permitted by Section 8.2(h) in an aggregate
amount not to exceed $5,000,000 in any fiscal year;
(c) Existing Indebtedness;
(d) Indebtedness of the Borrower evidenced by the Senior
Unsecured Notes in aggregate principal amount not to exceed $400,000,000
(less the amount of principal repayments thereof effected after the
Original Effective Date), and guarantees thereof by
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the Subsidiary Guarantors, so long as the guarantee of the Unit
Subsidiary is subordinated on the terms as provided in the Senior
Unsecured Notes Indenture as in effect on the Original Effective Date;
(e) Indebtedness of the Borrower or any of its Wholly-Owned
Subsidiaries owing to the Borrower or any of its Wholly-Owned
Subsidiaries, in each case to the extent making such loan was permitted
in Section 8.5;
(f) Indebtedness of the Borrower or any of the Borrower's
Subsidiaries evidenced by guarantees, performance bonds and surety bonds
(including reimbursement obligations relating thereto) incurred in the
ordinary course of business for purposes of insuring the performance of
the Borrower or such Subsidiary in an aggregate principal amount,
without duplication, not to exceed $20,000,000 at any time outstanding;
(g) Indebtedness under Interest Rate Agreements determined in
good faith by the Borrower to be related to outstanding floating rate
Indebtedness permitted to remain outstanding pursuant to this Section
8.3 and which the Borrower in good faith determines are non-speculative
in nature, provided that the outstanding exposure in connection
therewith shall at no time exceed $15,000,000;
(h) Indebtedness of the Borrower or any of the Borrower's
Subsidiaries, in addition to other Indebtedness permitted under clauses
(a) through (g) above, in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding; and
(i) Indebtedness of the Borrower or any of the Borrower's
Subsidiaries incurred to refinance any Indebtedness described in Section
8.3(b) and (c), in each case so long as the principal amount of
outstanding Indebtedness is not increased as a result of any such
refinancing, the weighted average maturity thereof is not decreased and
no greater Liens or security interests are granted, and no additional
guarantees provided, in connection therewith.
8.4. Capital Expenditures. (a) Holdings and the Borrower will
not, and will not permit any of their respective Subsidiaries to, make any
Capital Expenditures, except that during any fiscal year set forth below,
Holdings, the Borrower and their respective Subsidiaries may make Capital
Expenditures, so long as the aggregate amount of such Capital Expenditures does
not exceed in any fiscal year set forth below the amount set forth below
opposite such fiscal year:
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Fiscal Year Ending Amount
------------------ ------
December 31, 1998 $124,000,000
December 31, 1999 $136,100,000
December 31, 2000 $134,900,000
December 31, 2001 $133,100,000
December 31, 2002 $137,200,000
December 31, 2003 $138,700,000
December 31, 2004 $142,700,000
December 31, 2005 $146,800,000
(b) Notwithstanding the foregoing, in the event that the amount
of Capital Expenditures permitted to be made by Holdings, the Borrower and their
respective Subsidiaries pursuant to clause (a) above in any fiscal year (before
giving effect to any increase in such permitted expenditure amount pursuant to
this clause (b) and after giving effect to any reduction in such permitted
expenditure amount pursuant to clause (c) below) is greater than the amount of
such Capital Expenditures made by Holdings, the Borrower and their respective
Subsidiaries during such fiscal year, such excess (the "CapEx Rollover Amount")
may be carried forward and utilized to make Capital Expenditures in the
immediately succeeding fiscal year.
(c) In addition to any amounts set forth in clause (a) or (b)
above, in any fiscal year Holdings, the Borrower and their respective
Subsidiaries may make Capital Expenditures in an amount equal to 15% of the
amount set forth in clause (a) above for such fiscal year; provided, that (i) no
Capital Expenditures were made pursuant to this clause (c) during the prior
fiscal year and (ii) if Capital Expenditures are made during a fiscal year
pursuant to this clause (c), then the amount of Capital Expenditures permitted
for the subsequent fiscal year pursuant to clause (a) above shall be reduced by
the amount of such Capital Expenditures made during such fiscal year pursuant to
this clause (c).
(d) Notwithstanding the foregoing, Holdings, the Borrower and
their respective Subsidiaries may make Capital Expenditures (which Capital
Expenditures will not be included in any determination under the foregoing
clause (a), (b) or (c)) with the insurance proceeds received by Holdings, the
Borrower or any of their respective Subsidiaries from any Casualty Loss so long
as such Capital Expenditures are to replace or restore any properties or assets
in respect of which such proceeds were paid in accordance with Section 7.10.
(e) To the extent any Capital Expenditures made pursuant to
clauses (a), (b) or (c) above involve the purchase or lease of real property,
such Capital Expenditures may not be made unless, to the best of the Borrower's
knowledge, such purchase or lease will not result in any material increase in
the contingent liabilities (including environmental liabilities) of the Borrower
or any of its Subsidiaries.
8.5. Investments. Holdings and the Borrower will not, and will
not permit any of their respective Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities issued by, or any other interest in, or make any capital contribution
to (collectively, "Investments") any other Person, except:
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(a) Holdings, the Borrower or any of their respective
Subsidiaries may acquire and hold accounts receivables owing to it, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with the customary trade terms of the
Borrower or its applicable Subsidiary, as the case may be;
(b) loans and advances to employees, officers and directors in
the ordinary course of business in an aggregate principal amount not to
exceed $1,000,000 at any time outstanding shall be permitted;
(c) subject to continued compliance with Section 7.18 and the
last paragraph of Section 8.1 in the case of any Investments being made
by the Unit Subsidiary, any Investment by any Subsidiary of the Borrower
in the Borrower (so long as any loan made by a Subsidiary of the
Borrower, other than the Unit Subsidiary, to the Borrower is
subordinated to the Obligations on terms satisfactory to the
Administrative Agent) or in another Wholly-Owned Subsidiary (which is a
Subsidiary Guarantor) of the Borrower;
(d) subject to Section 8.16, Investments in Cash Equivalents
shall be permitted;
(e) Investments by Holdings, the Borrower and their respective
Subsidiaries permitted under Section 8.1 and Capital Expenditures
permitted under Section 8.4 shall be permitted;
(f) Investments existing on the Restatement Effective Date and
listed on Schedule XIV hereto, without giving effect to any additions
thereto or replacements thereof, shall be permitted;
(g) Investments which may be deemed to exist as a result of the
entering into of Interest Rate Agreements to the extent permitted by
Section 8.3(g); and
(h) Holdings may make capital contributions to the Borrower;
(i) the Borrower and its Wholly-Owned Domestic Subsidiaries may
make intercompany loans and advances to each other, so long as each such
intercompany loan is evidenced by a promissory note pledged pursuant to
the Pledge Agreement;
(j) the Borrower and any Wholly-Owned Subsidiary (other than the
Unit Subsidiary) may make Permitted Acquisitions in accordance with the
terms of this Credit Agreement;
(k) so long as no Default or Event of Default is then in
existence or would result thereby, the Borrower and its Wholly-Owned
Subsidiaries may make intercompany loans and advances to pay Dividends
to the extent permitted by Section 8.6;
(l) the Borrower and each Subsidiary Guarantor may acquire and
own investments (including debt obligations) received in connection with
the bankruptcy or
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reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising the ordinary course of business;
(m) the Borrower and its Subsidiaries may make capital
contributions (but not of Eligible Accounts Receivable) to Wholly-Owned
Subsidiaries of the Borrower which are Subsidiary Guarantors so long as
such capital contributions are made in compliance with Section 7.18 (if
applicable);
(n) Investments may be made from time to time in the Canadian
Subsidiary in connection with and after the establishment thereof, in
each case so long as the Canadian Subsidiary is a Wholly-Owned
Subsidiary of the Borrower and so long as the aggregate amount of such
Investments (taking the amount of cash so invested plus the aggregate
fair market value of all non-cash Investments, including without
limitation the gross book value of any Rental Equipment contributed to
the Canadian Subsidiary) at any time outstanding (calculated without
regard to any write-downs or write-offs thereof) does not exceed
$5,000,000 unless and until the Canadian Subsidiary becomes a Subsidiary
Guarantor and a party to the Security Agreement (and any other relevant
Collateral Documents), and takes all other actions as may be requested
by the Collateral Agent to ensure that the Collateral Agent has a valid
and perfected first priority security interest in the assets of the
Canadian Subsidiary subject to the granting provisions of the various
Collateral Documents and has taken the actions specified in the proviso
to the last sentence of Section 2.6(b)(i); and
(o) any Investments in addition to those contemplated by the
foregoing clauses (a) through (n), provided that all Investments made
pursuant to this clause (o) shall be permitted by the Senior Unsecured
Notes Documents and shall not exceed $10,000,000 at any time
outstanding.
8.6. Dividends, etc. Holdings and the Borrower will not, and will
not permit any of their respective Subsidiaries to, declare or pay any dividends
(other than dividends payable solely in common stock of the Person paying such
dividend) or return any capital to, its stockholders or authorize or make any
other distribution, payment or delivery of property or cash to its stockholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration (other than consideration in the form of common
stock of the Person paying such dividend), any shares of any class of its
capital stock now or hereafter outstanding (or any warrants for or options or
stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes and Holdings and the Borrower will not
permit any of their respective Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of Holdings, the
Borrower or any of their respective Subsidiaries now or hereafter outstanding
(or any warrants for or options or stock appreciation rights issued by such
Person in respect of any such shares) (all of the foregoing "Dividends"), except
that:
(a) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower which owns
equity interest therein;
(b) Holdings may pay regularly scheduled Dividends on the
Permitted
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Preferred Stock pursuant to the terms thereof solely through the
issuance of additional preferred shares of such Permitted Preferred
Stock;
(c) the Borrower may pay Dividends or make loans to Holdings to
enable Holdings to (i) pay reasonable and customary corporate and
administrative expenses not to exceed in the aggregate $250,000 per year
in the ordinary course and (ii) make payments expressly permitted
pursuant to Section 8.7;
(d) so long as the payments relate to a period for which the
Borrower is a member of the same consolidated group as Holdings for
federal income tax purposes, the Borrower may make payments required
pursuant to the Tax Sharing Agreement as in effect on the Original
Effective Date and delivered to the Administrative Agent pursuant to
Section 5.1(o) of the Original Credit Agreement;
(e) Holdings may repurchase Holdings Common Stock or options to
purchase Holdings Common Stock held by current or former directors,
executives, officers, members of management or employees of Holdings,
the Borrower or any of their respective Subsidiaries (or their spouses
or estates), provided that (1) no Default or Event of Default then
exists or would result therefrom and (2) the aggregate amount of cash
expended by Holdings pursuant to this clause (g) during any fiscal year
of Holdings shall not exceed $1,500,000 in the aggregate;
(f) the Borrower may pay cash Dividends or make loans to Holdings
for the purpose of enabling Holdings to pay the purchases referred to in
clause (e) above, so long as all proceeds thereof are promptly used by
Holdings to make such purchases and/or pay such Dividends; and
(g) repurchases of capital stock of Holdings which may be deemed
to occur upon exercise of stock options if such capital stock represents
a portion of the exercise price of such options.
8.7. Transactions with Affiliates. Holdings and the Borrower will
not, and will not permit any of their respective Subsidiaries to, enter into any
transaction or series of transactions after the Restatement Effective Date
whether or not in the ordinary course of business, with any Affiliate other than
on terms and conditions substantially as favorable to Holdings, the Borrower or
such Subsidiary as would be obtainable by Holdings, the Borrower or such
Subsidiary at the time in a comparable arm's-length transaction with a Person
other than an Affiliate, provided that the foregoing restrictions shall not
apply to (i) payments by Holdings, the Borrower and any of their respective
Subsidiaries to the Equity Investors and their respective Affiliates made
pursuant to any financial advisory, financing, underwriting or placement
agreement, or in respect of other investment banking activities, in each case as
determined by the board of directors of such Person in good faith, so long as
the amount of any such fees, expenses, or other amounts paid for any such
service provided shall not exceed the usual and customary fees for similar
services rendered by or obtainable from Persons other than the Equity Investors
and their Affiliates to such Credit Party, (ii) employment arrangements entered
into in the ordinary course of business with officers, directors or similar
executives of Holdings, the
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Borrower, and their respective Subsidiaries, (iii) customary fees paid to
members of the Board of Directors of Holdings, the Borrower, and their
respective Subsidiaries, (iv) subject to, in the case of the Unit Subsidiary,
continued compliance with the requirements of Section 7.18 and the last
paragraph of Section 8.1, transactions between the Borrower and any of its
Wholly-Owned Subsidiaries or among Wholly-Owned Subsidiaries of the Borrower;
(v) transactions expressly permitted pursuant to Section 8.6; (vi) any issuance
of securities, or other payments, benefits, awards or grants in cash, securities
or otherwise, pursuant to, or the funding of, employment arrangements, stock
option and stock ownership plans or deferred compensation plans approved by the
Board of Directors of Holdings, the Borrower or the respective Subsidiary (other
than the Unit Subsidiary); (vii) loans or advances to employees in the ordinary
course of business in accordance with past practices of Holdings, the Borrower
or its Subsidiaries (other than the Unit Subsidiary), but in any event not to
exceed $1,000,000 in aggregate amount at any time outstanding (calculated
without regard to any write-downs or write-offs thereof); (viii) payments
pursuant to the Tax Sharing Agreement as originally in effect; (ix)
indemnification agreements with, and the payment of fees and indemnity to,
directors, officers and employees of Holdings, the Borrower or any Subsidiary of
the Borrower (other than the Unit Subsidiary) in each case in the ordinary
course of business; (x) any severance, noncompetition or confidentiality
agreement entered into by Holdings, the Borrower or any Subsidiary (other than
the Unit Subsidiary) with its employees in the ordinary course of business; and
(xi) Holdings' entrance into and, subject to continued compliance with the terms
and conditions set forth herein, Holdings' performance of its obligations under
(a) the Investor Stockholders Agreement dated as of May 22, 1997 among Holdings,
Cypress Merchant Banking Partners L.P., Cypress Offshore Partners L.P., Scotsman
Partners L.P., Odyssey Partners, L.P. and BT Investment Partners, Inc. (as same
is amended pursuant to Amendment No. 1 thereto, dated as of September 1, 1998),
(b) the Second Amended and Restated Management Stockholders' and Optionholders'
Agreement dated as of May 22, 1997 among Holdings, Cypress Merchant Banking
Partners L.P., Cypress Offshore Partners L.P., Scotsman Partners, L.P., the
Management Stockholders (as defined therein) and the Permitted Transferees (as
defined therein) of the Management Stockholders who become parties thereto
pursuant to the terms and provisions contained therein and (c) the Amending
Agreement dated as of May 22, 1997 among Holdings, Odyssey Partners, L.P. and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
Notwithstanding the foregoing, Holdings and the Borrower shall
not, and shall not permit their respective Subsidiaries to, enter into any
agreements with any Affiliates thereof (or any officers or management of such
Affiliates), or any other Person providing for management services (other than
the Unit Subsidiary Management Agreement and any other Management Agreements
whereby one or more Subsidiaries of the Borrower pay fees for management
services solely to the Borrower).
8.8. Changes in Business. (a) Holdings and the Borrower will not,
and will not permit their respective Subsidiaries to, engage in any business
except (i) all or any part of the business of selling and leasing storage
containers, mobile offices and modular structures and related equipment or any
other equipment sold or leased to a similar customer base and (ii) any business
or services related, ancillary or complementary to such businesses.
(b) Holdings shall not engage in any business other than relating
to its
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ownership of the capital stock of the Borrower, its guaranty of the Borrower's
obligations under the Credit Agreement and any other activity expressly
contemplated by this Credit Agreement, the other Credit Documents and the
Recapitalization Agreement. Holdings shall have no significant assets other than
its ownership interests as described in the immediately preceding sentence and
shall act as a holding company which shall not directly engage in any business.
8.9. Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio for any period of four consecutive fiscal quarters, in
each case taken as one accounting period, ended on a date during a period set
forth below to be less than the ratio set forth opposite such period:
Period Ratio
------ -----
Restatement Effective Date 1.50
through and including September
30, 1998
October 1, 1998 through and 1.55
including March 31, 1999
April 1, 1999 through and 1.60
including June 30, 1999
July 1, 1999 through and 1.65
including September 30, 1999
October 1, 1999 through and 1.75
including December 31, 1999
January 1, 2000 through and 1.80
including March 31, 2000
April 1, 2000 through and 1.85
including June 30, 2000
July 1, 2000 through and 1.90
including September 30, 2000
October 1, 2000 through and 1.95
including December 31, 2000
Thereafter 2.00
8.10. Utilization. The Borrower will not permit the Utilization
for any period of 13 consecutive fiscal months ended on the last day of any
fiscal quarter (calculated by taking the average of the Utilization for each of
the 13 months in such period) to be less than 78%.
8.11. Creation of Subsidiaries. Holdings and the Borrower will
not, and will not permit any of their respective Subsidiaries to, create or
acquire any Subsidiaries other than as permitted in Section 7.17 without the
consent of the Required Lenders (and the Requisite
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Lenders). Notwithstanding anything to the contrary contained above, the Borrower
may (i) create or establish a new Wholly-Owned Subsidiary of the Borrower
organized under the laws of Canada or any of its provinces (the "Canadian
Subsidiary"), which shall conduct substantially all of its business activities
in Canada, and the establishment or creation of which shall not require the
consent of the Required Lenders (or the Requisite Lenders) and shall not require
the taking of the actions otherwise specified in Section 7.16, and (ii) acquire
SMI pursuant to the Acquisition subject to the terms and conditions set forth
herein and in the Acquisition Documents.
8.12. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Governing Documents, Preferred Stock and Certain
Other Agreements; etc. Holdings and the Borrower will not, and will not permit
any of their respective Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value
of (including, without limitation, by way of depositing with the trustee
with respect thereto or any other Person money or securities before due
for the purpose of paying when due) exchange or purchase, redeem or
acquire for value (whether as a result of a Change of Control, the
consummation of asset sales or otherwise) any Senior Unsecured Note;
(ii) amend or modify, or permit the amendment or modification of,
any provision of any Senior Unsecured Notes Document, except any
amendment or modification which is not adverse to the Lenders in any
respect (it being understood and agreed that, with respect to the Senior
Unsecured Notes Documents, in no event shall any amendment be permitted
which relates to the Unit Subsidiary's guaranty of the Senior Unsecured
Notes or the subordination provisions applicable thereto);
(iii) amend, modify or change in any way adverse to the interests
of the Lenders, any Tax Sharing Agreement, the Equity Financing
Documents, any Management Agreement, the Master Lease Agreements, the
Unit Subsidiary Management Agreement, any Recapitalization Document, the
Acquisition Agreement or any Acquisition Documents (including, without
limitation, the Trade Name License Agreement), its Certificate of
Incorporation (including, without limitation, by the filing or
modification of any certificate of designation), By-Laws or Limited
Liability Company Agreement, or any agreement entered into by it, with
respect to its capital stock (including any Shareholders' Agreement,
except as contemplated by the Recapitalization Agreement), or enter into
any new Tax Sharing Agreement, Management Agreement or agreement with
respect to its capital stock which could in any way be adverse to the
interests of the Lenders in their capacity as such; and
(iv) amend, modify or change in any way adverse to the Lenders
any preferred stock (or any Certificates of Designation relating
thereto).
8.13. Issuance of Stock. (a) Holdings shall not issue any shares
of capital stock after the Restatement Effective Date, other than (i) shares of
Holdings Common Stock to the extent not resulting in a Change of Control, (ii)
shares of Permitted Preferred Stock on terms and conditions, and pursuant to
documentation, in form and substance satisfactory to the
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Administrative Agent and the Required Lenders, and (iii) shares of Permitted
Preferred Stock paid as pay-in-kind Dividends on the Permitted Preferred Stock
and (b) the Borrower will not permit any of its Subsidiaries directly or
indirectly to issue, sell, assign, pledge or otherwise encumber or dispose of
any shares of its capital stock or other equity securities (or warrants, rights
or options to acquire shares or other equity securities) of such Subsidiary to
any Person other than Holdings, the Borrower or another Wholly-Owned Subsidiary,
except, (x) to the extent permitted by Sections 7.3, 7.17, 8.1(c), 8.2 and 8.5
and (y) for the issuance of directors' qualifying shares to the extent required
by applicable law.
8.14. Limitation on Restrictions Affecting Subsidiaries. Each of
Holdings and the Borrower will not, and will not permit any of their respective
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist any encumbrance or restriction which prohibits or limits the ability of
the Borrower or any Subsidiary of Holdings or the Borrower to (a) pay dividends
or make other distributions or pay any Indebtedness owed to Holdings, the
Borrower or any of their respective Subsidiaries, (b) make loans or advances to
Holdings, the Borrower or any of their respective Subsidiaries, (c) transfer any
of its properties or assets to Holdings, the Borrower or any of their respective
Subsidiaries or (d) create, incur, assume or suffer to exist any lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than encumbrances and restrictions arising under (i) applicable law, (ii)
this Credit Agreement and the other Credit Documents, (iii) Indebtedness
permitted pursuant to Sections 8.3(c) and (d), (iv) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of Holdings, the Borrower or any of their respective Subsidiaries, (v) customary
restrictions on dispositions of real property interests found in reciprocal
easement agreements of Holdings, the Borrower or any of their respective
Subsidiaries, (vi) any agreement relating to Indebtedness incurred by a
Subsidiary of the Borrower (other than SMI and its Subsidiaries acquired
pursuant to the Acquisition) prior to the date on which such Subsidiary was
acquired by the Borrower and outstanding on such acquisition date, (vii) the
extension or continuation of contractual obligations in existence on the date
hereof, provided that any such encumbrances or restrictions contained in such
continuation are no less favorable to the Lenders than those encumbrances and
restrictions under or pursuant to the contractual obligations continued hereby,
and (viii) restrictions imposed under the agreements relating to Indebtedness
permitted under Section 8.3(b), provided that such restrictions apply only to
the property securing such Indebtedness as permitted hereunder.
8.15. No Additional Bank Accounts. Holdings and the Borrower will
not, and will not permit any of their respective Subsidiaries to, directly or
indirectly, open, maintain or otherwise have any checking, savings or other
deposit accounts at any bank or other financial institution where money is or
may be deposited or maintained with any Person, other than (i) the Concentration
Account, the Collection Accounts, the Disbursement Account, any cash collateral
Account established pursuant to Section 2.5(e) and the accounts set forth on
Schedule XV, (ii) until the 150th day after the Restatement Effective Date, the
Fleet Collection Account (and related accounts previously disclosed to the
Administrative Agent) and (iii) local accounts in the ordinary course of
business and in compliance with Section 8.16 and as set forth on Schedule XV, it
being understood that in no event shall Holdings, the Borrower or any of their
respective Subsidiaries be permitted to direct any payments on behalf of any
Accounts or Leases or any
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other Collateral to such local accounts.
8.16. No Excess Cash. Holdings and the Borrower will not, and
will not permit any of their respective Subsidiaries to, directly or indirectly,
maintain in the aggregate in all of the checking, savings or other accounts
(other than the Disbursement Accounts, the Collection Accounts, the
Concentration Account, the payroll accounts and the Deferred Compensation
Program Investment Account set forth on Schedule XV) of Holdings, the Borrower
and their respective Subsidiaries total cash balances and investments (including
Investments in Cash Equivalents) in excess of $500,000 (or, on the Restatement
Effective Date and during the immediately following six Business Days, in the
case of amounts representing proceeds of the Loans or other funds received on
the Restatement Effective Date in connection with the Acquisition, $5,000,000)
at any time during which any Loans are outstanding hereunder. Notwithstanding
anything to the contrary contained above or in Section 8.15, (i) after the
establishment thereof the Canadian Subsidiary may from time to time have one or
more checking, savings or other deposit accounts at one or more banks (which
shall not be subject to security interests in favor of the Collateral Agent
unless and until such time as the Canadian Subsidiary becomes a Subsidiary
Guarantor), provided that at no time shall the aggregate amount of cash and
other deposits contained in said accounts (including all Cash Equivalents)
exceed $5,000,000 (taking the U.S. dollar equivalent of amounts expressed in
currencies other than U.S. dollars) and (ii) SMI may maintain the Fleet
Collection Account (and related accounts previously disclosed to the
Administrative Agent) until the 150th day after the Restatement Effective Date.
8.17. Account Terms. The Borrower shall, and shall cause each of
its Subsidiaries to, promptly pay when due, or in conformity with customary
trade terms consistent with past practices, all of their trade accounts payable,
except for late payment in the ordinary course of business, the lateness of
which payment, singly or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
8.18. Permitted Preferred Stock. At all times prior to the Term
Loan Maturity Date and thereafter until the payment in full in cash of all
Obligations then due and payable hereunder, the Borrower shall pay Dividends on
the Permitted Preferred Stock only in additional shares of Permitted Preferred
Stock.
8.19. Unit Subsidiary. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement, in no event will (i) the Unit
Subsidiary be liquidated and/or dissolved, (ii) the Unit Subsidiary be merged or
consolidated with or into Holdings, the Borrower or any of their respective
other Subsidiaries or any other Person, (iii) the Unit Subsidiary become a
"Guarantor" as opposed to a "Subordinated Guarantor" under the Senior Unsecured
Notes Indenture or (iv) the Borrower permit the "Subordinated Guaranty" of the
Unit Subsidiary contained in the Senior Unsecured Notes Indenture to be
released.
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ARTICLE 9.
Events of Default and Remedies
9.1. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payments. The Borrower shall (i) default in the
payment when due of any principal of any Loans or (ii) default, and such
default shall continue for five or more days, in the payment when due
of, any interest on any Loans or any drawings under Letters of Credit
which have not been reimbursed by the Borrower (including through the
incurrence of Revolving Loans), or (iii) default, and such default shall
continue for five or more days after written demand therefor by the
Administrative Agent, in the payment when due of any Fees, Expense or
any other amounts owing hereunder or under any other Credit Document; or
(b) Representations, etc. Any representation or warranty
made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
(c) Covenants. Holdings or the Borrower shall (i) default
in the due performance or observance by it of any term, covenant or
agreement contained in Sections 7.1(e), 7.1(h), 7.8, 7.12, 7.17 or 7.18
or Article 8, or (ii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in
Section 9.1(a), 9.1(b) or clause (i) of this Section 9.1(c)) contained
in this Credit Agreement or the other Credit Documents and such default
shall continue unremedied for a period of at least 30 days after notice
to the defaulting party by the Administrative Agent or the Required
Lenders; or
(d) Default Under Other Agreements. (i) Holdings, the
Borrower or any of their respective Subsidiaries shall (x) default in
any payment with respect to any Indebtedness (other than the
Obligations) beyond the period of grace, if any, applicable thereto or
(y) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause any such Indebtedness to become due prior to
its stated maturity; or (ii) any such Indebtedness of Holdings, the
Borrower or any of their respective Subsidiaries shall be declared by
the holders thereof or a representative therefor to be due and payable
prior to the stated maturity thereof; provided that it shall not
constitute an Event of Default pursuant to this Section 9.1 unless the
principal amount of any one issue of Indebtedness referred to in clauses
(i) or (ii) above exceeds $2,000,000 or the aggregate amount of all
Indebtedness referred to in clauses (i) and (ii) above exceeds
$3,000,000 at any one time;
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or
(e) Bankruptcy, etc. Holdings, the Borrower or any of
their respective Subsidiaries, shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings, the Borrower or any of their respective Subsidiaries, and the
petition is not controverted within 30 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of Holdings, the Borrower or any of
its Subsidiaries; or Holdings, the Borrower or any of their respective
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now
or hereafter in effect relating to Holdings, the Borrower or such
Subsidiary; or there is commenced against Holdings, the Borrower or any
of their respective Subsidiaries, any such proceeding which remains
undismissed for a period of 60 days; or Holdings, the Borrower or any of
their respective Subsidiaries is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding
is entered; or Holdings, the Borrower or any of their respective
Subsidiaries suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or Holdings, the Borrower or any of
their respective Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings, the Borrower
or any of their respective Subsidiaries for the purpose of effecting any
of the foregoing; or
(f) ERISA. (i) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof after the
Restatement Effective Date under Section 412 of the Code or Section 302
of ERISA or a waiver of such standard or extension of any amortization
period is sought or granted under Section 412 of the Code or Section 303
or 304 of ERISA, a Reportable Event shall have occurred, a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject
to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof) and an event described in subsection .62,
.63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be
reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall
have had or is likely to have a trustee appointed to administer such
Plan, any Plan which is subject to Title IV of ERISA is, shall have been
or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan subject to Title IV of ERISA shall
have an Unfunded Current Liability, a contribution required to be made
with respect to a Plan or a Foreign Pension Plan has not been timely
made, the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate has incurred or is likely to incur any liability to or on
account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or on account of a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
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under Section 4980B of the Code, or the Borrower or any Subsidiary of
the Borrower has incurred or is likely to incur liabilities pursuant to
one or more employee welfare benefit plans (as defined in Section 3(1)
of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA or any other
applicable continuation of coverage laws) or Plans or Foreign Pension
Plans; (ii) there shall result from any such event or events the
imposition of a Lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (iii) such
Lien, security interest or liability, individually, and/or in the
aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect; or
(g) Collateral Documents. Any Collateral Document shall cease to
be in full force and effect (except in accordance with the terms
thereof), or shall cease to give the Collateral Agent on behalf of the
Lenders the Liens, rights, powers and privileges purported to be created
thereby in favor of the Collateral Agent, any Credit Party shall default
in any material respect in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to any such Collateral Document and such default shall continue
unremedied for a period of at least 30 days after notice to the Borrower
by the Administrative Agent or the Required Lenders; or
(h) Judgments. One or more judgments or decrees shall be entered
against Holdings, the Borrower or any of their respective Subsidiaries
involving liability of $1,000,000 or more in the case of any one such
judgment or decree (to the extent not paid or covered by insurance
provided by a carrier that has acknowledged coverage) and all such
judgments or decrees shall not have been vacated, discharged or stayed
pending appeal within 60 days from the entry thereof; or
(i) Change of Control. A Change of Control shall occur; or
(j) Guaranty. Any Guaranty shall cease to be in full force and
effect (except in accordance with the terms thereof), or any Guarantor
shall default in any material respect in the due performance or
observance of any term, covenant or agreement on its part to be
performed or observed pursuant thereto or any Guarantor shall deny or
disaffirm any of its obligations thereunder and such default, denial or
disaffirmation shall continue unremedied for a period of at least 30
days after notice to the Borrower by the Administrative Agent or the
Required Lenders;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of either the Required Lenders or the Requisite Lenders, by written
notice to the Borrower, take any or all of the following actions, without
prejudice to the rights of the Agents or any Lender to enforce its claims
against the Borrower, except as otherwise specifically provided for in this
Credit Agreement (provided that, if an Event of Default specified in Section
9.1(e) shall occur with respect to the Borrower or the Unit Subsidiary, the
result which would occur upon the giving of written notice by the Administrative
Agent as specified in clause (i) below shall occur
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automatically without the giving of any such notice): (i) declare the Total
Commitments and (if still in effect) the Total Term Loan Commitments terminated,
whereupon the Commitments of each Lender shall forthwith terminate immediately
and any Unused Line Fee accrued and unpaid shall forthwith become due and
payable without any other notice of any kind and declare the principal of and
any accrued interest in respect of all Loans and all Obligations owing hereunder
to be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (ii) direct the Collateral Agent to enforce any
or all of the Liens and security interests created pursuant to the Collateral
Documents; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; and/or (iv) direct the Borrower to pay (and the
Borrower hereby agrees upon receipt of such notice, or upon the occurrence of
any Event of Default specified in Section 9.1(e) in respect of the Borrower, it
will pay) to the Payments Administrator at its Payment Office such additional
amounts of cash, to be held as security for the Borrower's reimbursement
obligations in respect of Letter of Credit then outstanding equal to the
aggregate of all Letters of Credit Obligations.
ARTICLE 10.
The Agents
10.1. Appointment. (a) Each Lender hereby designates BTCC as
Administrative Agent (for purposes of this Section 10, the term "Administrative
Agent" shall include BTCC as Payments Administrator and as Collateral Agent
under the Collateral Documents), BTCC and NationsBank, N.A., as Co-Syndication
Agents, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as Documentation Agent, in each
case to act as specified herein and the other Credit Documents. Each Lender
hereby irrevocably authorizes, and each holder of any Note or participation in
any Letter of Credit by the acceptance of a Note or participation shall be
deemed irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Credit Agreement and the Notes and any
other instruments and agreements referred to herein and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. Subject to
the Intercreditor Agreement, the Lender Intercreditor Agreement and the various
Credit Documents, the Collateral Agent shall hold all Collateral and the
Payments Administrator shall hold all payments of principal, interest, Fees,
charges and Expenses received pursuant to this Credit Agreement or any other
Credit Document for the benefit of the Lenders to be distributed as provided
herein and therein. The Administrative Agent may perform any of its duties
hereunder by or through its agents or employees.
(b) The provisions of this Article 10 are solely for the benefit
of the Agents and the Lenders, and neither Holdings, the Borrower nor any of
their respective Subsidiaries shall have any rights as a third party beneficiary
of any of the provisions hereof (other than Sections 10.9 and 10.10(c)). In
performing its functions and duties under this Credit Agreement, the
Administrative Agent shall act solely as agent of the Lenders and does not
assume and shall
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not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for Holdings, the Borrower or any of their respective
Subsidiaries.
10.2. Nature of Duties of Agents. (a) Each of the Co-Syndication
Agents and the Documentation Agent shall have no obligations, responsibilities
or duties under this Credit Agreement or under any other Credit Document in its
capacity as such.
(b) The Administrative Agent shall not have duties or
responsibilities except those expressly set forth in this Credit Agreement and
the other Credit Documents. Neither the Administrative Agent nor any of its
officers, directors, employees or agents shall be liable for any action taken or
omitted by it as such hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Credit Agreement or the
other Credit Documents a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement or the other Credit Documents, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Credit Agreement or the
other Credit Documents except as expressly set forth herein or therein.
10.3. Lack of Reliance on Agents. (a) Independently and without
reliance upon any Agent, each Lender, to the extent it deems appropriate, has
made and shall continue to make (i) its own independent investigation of the
financial or other condition and affairs of Holdings, the Borrower and their
respective Subsidiaries in connection with the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of Holdings, the Borrower and their respective Subsidiaries, and, except as
expressly provided in this Credit Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the making of the Loans or at any time or times
thereafter.
(b) No Agent shall be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement or the other
Credit Documents or the financial or other condition of Holdings, the Borrower
or any of their respective Subsidiaries. No Agent shall be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Credit Agreement or the other Credit Documents,
or the financial condition of Holdings, the Borrower or any of their respective
Subsidiaries, or the existence or possible existence of any Default or Event of
Default.
10.4. Certain Rights of the Administrative Agent. The
Administrative Agent shall have the right to request instructions from the
Required Lenders or the Requisite Lenders at any time. If the Administrative
Agent shall request instructions from the Required Lenders or the Requisite
Lenders, as the case may be, with respect to any act or action (including the
failure to act) in connection with this Credit Agreement or the other Credit
Documents, the
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Administrative Agent shall be entitled to refrain from such act or taking such
action unless and until the Administrative Agent shall have received
instructions from the Required Lenders or the Requisite Lenders, as the case may
be, and the Administrative Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender shall have
any right of action whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders or the Requisite
Lenders, as the case may be.
10.5. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for Holdings and the
Borrower with respect to matters concerning Holdings, the Borrower and their
respective Subsidiaries), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
10.6. Indemnification of Agents. To the extent any Agent is not
reimbursed and indemnified by Holdings or the Borrower, each Lender will
reimburse and indemnify each Agent, in proportion to its percentage voting
interest as in effect from time to time for purposes of determining the
Requisite Lenders (for this purpose, determined as if there were no Defaulting
Lenders and, from and after any date upon which all Obligations have been paid
in full, with such determinations to be made prior to giving effect to such
repayment in full), for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever (including all Expenses) which may be imposed on, incurred by
or asserted against such Agent in performing its duties hereunder or under any
other Credit Document, or in any way relating to or arising out of this Credit
Agreement or any other Credit Document; provided, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct. The agreements contained in this
Section shall survive any termination of this Credit Agreement and the other
Credit Documents and the payment in full of the Obligations.
10.7. The Agents in their Individual Capacities. With respect to
its obligation to lend under this Credit Agreement, the Loans made by it and the
Notes issued to it, and its participation in Letters of Credit issued hereunder,
each Agent shall have the same rights and powers hereunder as any other Lender
or holder of a Note or participation interests and may exercise the same as
though it was not performing the duties specified herein; and the terms
"Lenders", "Required Lenders", "Requisite Lenders", "holders of Revolving
Notes", "holders of Term Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agents in their individual capacities.
Each Agent may accept deposits from, lend money to, acquire equity interests in,
and generally engage in any kind of banking, trust, financial advisory
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or other business with Holdings or Borrower or any Affiliate thereof as if it
were not performing the duties specified herein, and may accept fees and other
consideration from Holdings, the Borrower or an Affiliate thereof for services
in connection with this Credit Agreement and otherwise without having to account
for the same to the Lenders.
10.8. Holders of Notes. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note, or Notes
issued in exchange therefor.
10.9. Resignation of Agents; Successor Administrative Agent; etc.
(a) The Administrative Agent may, upon five Business Days' notice to the Lenders
and the Borrower, resign at any time (effective upon the appointment of a
successor Administrative Agent pursuant to the provisions of this Section 10.9)
by giving written notice thereof to the Lenders and the Borrower. Such
resignation of the Administrative Agent shall also operate as a resignation as
Payments Administrator. Upon any such resignation, the Required Lenders (or, if
the Total Commitments have terminated and all related Obligations have been
repaid in full, the Requisite Lenders) shall have the right, upon five days'
notice and written approval by the Borrower (which approval shall not be
unreasonably withheld), to appoint a successor Administrative Agent. If no
successor Administrative Agent (i) shall have been so appointed by the Required
Lenders (or, if the Total Commitments have terminated and all related
Obligations have been repaid in full, the Requisite Lenders), and (ii) shall
have accepted such appointment, within thirty days after the retiring
Administrative Agent's giving of notice of resignation, then, upon five days'
notice, the retiring Administrative Agent may, on behalf of the Lenders, appoint
a successor Administrative Agent. In the event that no successor Administrative
Agent is appointed pursuant to the foregoing provisions, the Administrative
Agent's resignation shall become effective on the date which is forty-five days
after the retiring Administrative Agent's giving of notice of resignation, and
the Required Lenders (or, if the Total Commitments have terminated and all
related Obligations have been repaid in full, the Requisite Lenders) shall
perform the duties of the Administrative Agent hereunder.
(b) Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Credit Agreement and the other Credit Documents. After
any retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Credit Agreement.
(c) Any Co-Syndication Agent or Documentation Agent may, upon
five Business Days' notice to the Lenders and the Borrower, resign at any time
(effective upon the
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fifth Business Day after the giving of such notice). After any retiring
Co-Syndication Agent's or Documentation Agent's resignation hereunder as such an
Agent, the provisions of this Article 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Co-Syndication Agent or
Documentation Agent, as the case may be, under this Credit Agreement.
10.10. Collateral Matters. (a) Each Lender authorizes and directs
the Collateral Agent to enter into the Collateral Documents for the benefit of
the Lenders. Each Lender hereby agrees, and each holder of any Note or
participant in Letters of Credit by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any action taken by the
Required Lenders or Requisite Lenders in accordance with the provisions of this
Credit Agreement or the Collateral Documents, and the exercise by the Required
Lenders or Requisite Lenders, as the case may be, of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders. The Collateral
Agent is hereby authorized on behalf of all of the Lenders, without the
necessity of any notice to or further consent from any Lender, from time to time
prior to an Event of Default, to take any action with respect to any Collateral
or Collateral Documents which may be necessary to perfect and maintain perfected
the security interest in and liens upon the Collateral granted pursuant to the
Collateral Documents.
(b) The Lenders hereby authorize the Collateral Agent, at its
option and in its discretion, upon the direction of the Administrative Agent to
release any Lien granted to or held by the Collateral Agent upon any Collateral
(i) upon termination of the Commitments and payment and satisfaction of all of
the Obligations at any time arising under or in respect of this Credit Agreement
or the Credit Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the proceeds of
such sale by the Collateral Agent in compliance with Section 8.1 hereof or (iii)
if approved, authorized or ratified in writing by the Required Lenders and the
Requisite Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Administrative Agent at any time, the
Lenders will confirm in writing the Collateral Agent's authority to release
particular types or items of Collateral pursuant to this Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Required Lenders and the Requisite Lenders, or all of the
Lenders, as applicable, and upon at least five (5) Business Days' (or such
shorter period as is acceptable to the Collateral Agent) prior written request
by the Borrower, the Collateral Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Collateral Agent for the
benefit of the Lenders herein or pursuant hereto upon the Collateral that was
sold or transferred; provided, that (i) the Collateral Agent shall not be
required to execute any such document on terms which, in the Collateral Agent's
opinion, would expose the Collateral Agent to liability or create any obligation
or entail any consequence other than the release of such Liens without recourse,
representation or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
Holdings, the Borrower or any of their respective Subsidiaries in respect of)
all interests retained by Holdings, the Borrower or any of their respective
Subsidiaries, including,
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without limitation, the proceeds of the sale, all of which shall continue to
constitute part of the Collateral. In the event of any foreclosure or similar
enforcement action with respect to any of the Collateral, the Collateral Agent
shall be authorized to deduct all of the Expenses reasonably incurred by the
Collateral Agent from the proceeds of any such sale, transfer or foreclosure.
(d) The Collateral Agent shall have no obligation whatsoever to
the Lenders or to any other Person to assure that the Collateral exists or is
owned by Holdings, the Borrower or any of their respective Subsidiaries or is
cared for, protected or insured or that the Liens granted to the Collateral
Agent herein or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any manner or
under any duty of care, disclosure or fidelity any of the rights, authorities
and powers granted or available to the Collateral Agent in this Section 10.10 or
in any of the Collateral Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, the
Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Collateral Agent's own interest in the Collateral as one
of the Lenders and that the Collateral Agent shall have no duty or liability
whatsoever to the Lenders, except for its gross negligence or willful
misconduct.
10.11. Actions with Respect to Defaults. In addition to the
Administrative Agent's right to take actions on its own accord as permitted
under this Credit Agreement, the Administrative Agent shall take such action
with respect to an Event of Default as shall be directed by the Required Lenders
and the Requisite Lenders (provided that either the Required Lenders or the
Requisite Lenders may direct the Administrative Agent to take the actions
specifically contemplated by the last paragraph of Section 9.1); provided, that
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable and in the best interests of the Lenders.
10.12. Delivery of Information. The Administrative Agent shall
not be required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from Holdings, the Borrower, any Subsidiary, the Required
Lenders, the Requisite Lenders, any Lender or any other Person under or in
connection with this Credit Agreement or any other Credit Document except (i) as
specifically provided in this Credit Agreement or any other Credit Document and
(ii) as specifically requested from time to time in writing by any Lender with
respect to a specific document, instrument, notice or other written
communication received by and in the possession of the Administrative Agent at
the time of receipt of such request and then only in accordance with such
specific request.
10.13. Execution and Delivery of Lender Intercreditor Agreement.
The Revolving Credit Lenders hereby authorize and direct the Administrative
Agent to enter, on their behalf, the Lender Intercreditor Agreement, which shall
become effective in accordance with its terms on the Restatement Effective Date.
It is acknowledged and agreed that the Lender Intercreditor Agreement shall be
binding on each of the Lenders from time to time party hereto (including,
without limitation, any Lenders which become such after the Restatement
Effective
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Date in accordance with the provisions of Section 11.6 of this Credit
Agreement). It is further acknowledged and agreed that none of Holdings, the
Borrower or any of their Subsidiaries is party to the Lender Intercreditor
Agreement, and none of Holdings, the Borrower or any of their Subsidiaries have
any rights or obligations thereunder. The Lender Intercreditor Agreement may be
terminated, modified, changed or amended at any time and from time to time in
accordance with the terms thereof, without any consent on the part of, or notice
to, Holdings, the Borrower or any Subsidiary thereof.
ARTICLE 11.
Miscellaneous
11.1. Submission to Jurisdiction; Waivers. Each of Holdings and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Credit Agreement and the other Credit
Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York located in New York
City, the Courts of the United States of America for the Southern
District of New York and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) designates, appoints and empowers CT Corporation as its
designee, appointee and agent to receive, accept and acknowledge for and
on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any
such action or proceeding. If for any reason such designee, appointee
and agent shall cease to be available to act as such, the Borrower
agrees to designate a new designee, appointee and agent in New York City
on the terms and for the purposes of this provision satisfactory to the
Administrative Agent under this Credit Agreement and the other Credit
Documents.
(d) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to Holdings or the Borrower, as applicable, at its address set
forth in Section 11.5 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(e) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction;
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(f) to the extent permitted by law, waives the right to assert
any setoff, counterclaim or cross-claim in respect of, and all statutes
of limitations which may be relevant to, such action or proceeding
(other than compulsory counterclaims), provided that nothing in this
clause (f) shall preclude a separate action asserting any such claims;
and
(g) waives due diligence, demand, presentment and protest and any
notices thereof as well as notice of nonpayment.
11.2. Waiver of Jury Trial. HOLDINGS, THE BORROWER, EACH AGENT,
THE ISSUING BANK AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT
DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
11.3. Governing Law. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS CREDIT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS).
11.4. Delays: Partial Exercise of Remedies. No delay or omission
of any Agent, the Issuing Bank or the Lenders to exercise any right or remedy
hereunder, whether before or after the happening of any Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such Event of Default. No single or partial exercise by any Agent, the Issuing
Bank or the Lenders of any right or remedy shall preclude any other or further
exercise thereof, or preclude any other right or remedy.
11.5. Notices. Except as otherwise provided herein, all notices
and correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to the Administrative Agent, or any of the Lenders,
then to BTCC, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇, if to Holdings or the Borrower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President with a second copy to General Counsel at
the same address, or by facsimile transmission, promptly confirmed in writing
sent by first class mail, if to the Administrative Agent, or any of the Lenders,
at (▇▇▇) ▇▇▇-▇▇▇▇, if to Holdings or the Borrower at (▇▇▇) ▇▇▇-▇▇▇▇; or in each
case to such other address or fax number as the respective party listed above
shall have furnished in writing to the Administrative Agent and the Borrower.
All such notices and correspondence shall be deemed given when received by the
party to whom sent.
11.6. Benefit of Agreement. (a) This Credit Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that the Borrower may not
assign or transfer any of its interests hereunder, without the prior written
consent of the Lenders and provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth below in this Section 11.6, provided
that nothing in this Section 11.6
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shall prevent or prohibit any Lender from pledging its rights under this Credit
Agreement and/or its Loans and/or Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank.
(b) Each Lender shall have the right to transfer, assign or grant
participations in all or any part of its remaining rights and obligations
hereunder on the basis set forth below in this clause (b).
(A) Assignments. Each Lender may assign pursuant to an Assignment
and Assumption Agreement substantially in the form of Exhibit S-1 hereto
all or a portion of its rights and obligations hereunder pursuant to
this clause (b)(A) to (x) (i) its parent company and/or any affiliate of
such Lender which is at least 50% owned by such Lender or its parent
company, (ii) one or more Lenders or (iii) in the case of any Lender
that is a fund that invests in bank loans, any other fund that invests
in bank loans and is managed or advised by the same investment advisor
of such Lender or by an Affiliate of such investment advisor or (y) one
or more other Eligible Transferees, provided that any such assignment
pursuant to clause (y) above shall be in the aggregate amount of at
least $5,000,000, and shall require the consents of the Administrative
Agent, the Issuing Bank (which consent of the Issuing Bank is to be
required only in connection with any assignment of all or any portion of
Total Commitments) and the Borrower, which consents shall not be
unreasonably withheld. Any assignment to another Lender pursuant to this
clause (b)(A) will become effective upon the payment to the Payments
Administrator by either the assigning or the assignee Lender of a
nonrefundable assignment fee of $5,000 and the recording by the Payments
Administrator of such assignment, and the resultant effects thereof on
the Loans and Commitments of the assigning Lender and the assignee
Lender, in a register maintained by the Payments Administrator as agent
of the Borrower for this purpose (the "Register"), the Payments
Administrator hereby agreeing to effect such recordation no later than
five Business Days after its receipt of a written notification by the
assigning Lender and the assignee Lender of the proposed assignment.
Assignments pursuant to clause (b)(A) (y) will only be effective if the
Payments Administrator shall have received a written notice in the form
of Exhibit S-2 hereto from the assigning Lender and the assignee and
payment of a nonrefundable assignment fee of $5,000 to the Payments
Administrator by either the assigning Lender or the assignee. No later
than five Business Days after its receipt of such written notice, the
Payments Administrator will record such assignment, and the resultant
effects thereof on the Loans and Commitments of the assigning Lender, in
the Register, at which time such assignment shall become effective.
Notwithstanding the foregoing, the Payments Administrator may, but shall
not be required to, record any assignment in the Register on or after
the date on which any proposed amendment, modification or supplement in
respect of this Credit Agreement has been circulated to the Lenders for
approval until the earlier of (x) the effectiveness of such amendment,
modification or supplement in accordance with Section 11.10 or (y) 30
days following the date on which such proposed amendment, modification
or supplement was circulated to the Lenders. Upon the effectiveness of
any assignment pursuant to clause (b)(A)(y), (x) the assignee will
become a "Lender" for all purposes of this Credit Agreement and the
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other Credit Documents with the Loans and a Commitment as so recorded by
the Payments Administrator in the Register, and to the extent of such
assignment, the assigning Lender shall be relieved of its obligations
hereunder with respect to the portion of its Commitment being assigned,
(y) the Borrower shall issue new Notes (in exchange for the Note or
Notes of the assigning Lender) to the assigning Lender (to the extent
such Lender's Commitments and/or outstanding Term Loans as the case may
be, are not reduced to zero as a result of such assignment) and to the
assignee Lender, in each case to the extent requested by the assigning
Lender or assignee Lender, as the case may be, to the extent needed to
reflect the revised Commitments and/or outstanding Term Loans as the
case may be, of such Lenders and (z) the assignee Lender shall be bound
by (and entitled to the benefits of) the Lender Intercreditor Agreement
in accordance with the terms thereof, unless and to the extent that the
Lender Intercreditor Agreement has been terminated in accordance with
the terms thereof. The Payments Administrator will (x) notify the
Issuing Bank with respect to outstanding Letters of Credit within 5
Business Days of the effectiveness of any assignment hereunder and (y)
prepare on the last Business Day of each calendar quarter during which
an assignment has become effective pursuant to this clause (b)(A) a new
Schedule I giving effect to all such assignments effected during such
quarter and will promptly provide same to the Borrower and each of the
Lenders. To the extent that an assignment of all or any portion of a
Lender's rights and obligations hereunder would, at the time of such
assignment, result in increased payment obligations under Section 2.9,
4.5 or 4.10 from those being charged by the respective assigning Lender
prior to such assignment, then the Borrower shall not be obligated to
pay such increased amounts (although the Borrower shall be obligated to
pay any other increased amounts of the type described above resulting
from changes after the date of the respective assignment). The Borrower
agrees to indemnify the Payments Administrator from and against any and
all losses, claims, damages and liabilities of whatsoever nature which
may be imposed on, asserted against or incurred by the Payments
Administrator in performing its duties under this Section 11.6 other
than those resulting from the Payments Administrator's willful
misconduct or gross negligence.
(B) Participations. Each Lender may transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder pursuant to this clause (b)(B) to any Eligible
Transferee, provided that (i) such Lender shall remain a "Lender" for
all purposes of this Credit Agreement and the transferee of such
participation shall not constitute a Lender hereunder, (ii) no
participant under any such participation shall have rights to approve
any amendment to or waiver of this Credit Agreement or any other Credit
Document except to the extent such amendment or waiver would (x) extend
the final scheduled maturity of any of the Loans or the Commitments in
which such participant is participating (it being understood that a
waiver of a mandatory reduction in the Total Commitments or the waiver
of the application of any prepayment to the Loans shall not constitute
the extension of the final scheduled maturity of any Loan or
Commitment), (y) reduce the interest rate (other than as a result of
waiving the applicability of any post-default increases in interest
rates) or Fees applicable to any of the Revolving Loans, Commitments or
Letters of Credit or postpone the payment or reduce the amount thereof
or (z) release all or substantially all of the Collateral (except as
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expressly provided in the Credit Documents) and (iii) the Borrower, the
Agents and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under this Credit Agreement. In the case of any such participation, the
participant shall not have any rights under this Credit Agreement or any
of the other Credit Documents (the participant's rights against the
granting Lender in respect of such participation to be those set forth
in the agreement with such Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation, provided that such participant
shall be entitled to receive additional amounts under Sections 2.9,
2.10, 4.5 and 4.10 on the same basis as if it were a Lender to the
extent that the Lender granting such participation would be entitled to
such benefits if the participation had not been made. In addition, each
agreement creating any participation must include an agreement by the
participant to be bound by the provisions of Section 11.7 of this Credit
Agreement.
(c) Notwithstanding any other provisions of this Section 11.6, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) If any Lender becomes a Defaulting Lender, or upon the
occurrence of any event giving rise to the operation of Section 2.9, 4.3(c)(ii)
or 4.10 with respect to such Lender (and not other Lenders generally), the
Borrower shall have the right, with the consents of the Administrative Agent and
the Issuing Bank (which consents shall not be unreasonably withheld) if no
Default or Event of Default then exists, to replace such Lender (the "Replaced
Lender"), either in whole or, if such Lender is both a Revolving Credit Lender
and a Term Loan Lender, with respect to its Revolving Credit Commitment (and
related Obligations) only or its Term Loan Outstandings (and related Term Loan
Commitment) only, in each case at the option of the Borrower, with one or more
Eligible Transferees (collectively, the "Replacement Lender"), provided that (i)
at the time of any replacement pursuant to this Section 11.6(d), the Replacement
Lender shall enter into one or more Assignment and Assumption Agreements
pursuant to Section 11.6(b)(A) (and with all fees payable pursuant to said
Section 11.6(b)(A) to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire (x) the Revolving Credit Commitment and related
outstanding Revolving Loans of, and participations in Letters of Credit by, the
Replaced Lender, in instances where a Revolving Credit Lender is being replaced,
and (y) the Term Loan Commitment (if same remains in effect) and the outstanding
Term Loans of the Replaced Lender, in instances where a Term Loan Lender is
being replaced and, in each case in connection therewith, shall pay to (x) the
Replaced Lender in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Lender (or the Revolving Loans or Term Loans, as the case may be,
of the Replaced Lender if only such Loans are being acquired pursuant to the
respective replacement), (B) in the case of any replacement of a Revolving
Credit Lender, an amount equal to all drawings under Letters of Credit that have
been funded by (and not reimbursed to) such Replaced Lender, together with all
then unpaid interest with respect thereto at such time, (C) an amount equal to
the increased costs incurred by the Borrower and owing to the Replaced Lender
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(or, if the respective Replaced Lender is both a Revolving Credit Lender and a
Term Loan Lender, and is only being replaced with respect to a single such
Tranche, the respective increased costs owing with respect thereto) pursuant to
Sections 2.9 and 4.10 and (D) an amount equal to all accrued, but theretofore
unpaid, Fees owing to the Replaced Lender (or, if the respective Replaced Lender
is both a Revolving Credit Lender and a Term Loan Lender, and is only being
replaced with respect to a single such Tranche, the Fees owing with respect to
such Tranche) pursuant to Article 4 and (y) in the case of any replacement of a
Revolving Credit Lender, the Issuing Bank the amount of all unreimbursed
drawings under Letters of Credit attributable to such Replaced Lender and (ii)
all obligations of the Borrower owing to the Replaced Lender (other than (x)
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid and (y) if
the respective Replaced Lender is both a Revolving Credit Lender and a Term Loan
Lender and is only being replaced with respect to a single such Tranche,
obligations relating to the Tranche with respect to which such Lender is not
being replaced) shall be paid in full by the Borrower to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements the payment of amounts referred to in
clauses (i) and (ii) above the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder
(unless such Lender was both a Revolving Credit Lender and a Term Loan Lender
hereunder, and was only replaced with respect to a single such Tranche), except
with respect to indemnification provisions under this Credit Agreement, which
shall survive as to such Replaced Lender.
(e) Each Lender party to this Credit Agreement on the Restatement
Effective Date hereby represents, and each Person that becomes a Lender pursuant
to an assignment permitted by the preceding clause (b)(A) will upon its becoming
party to this Credit Agreement represent, that it is an Eligible Transferee
which makes or acquires loans in the ordinary course of its business and that it
will make or acquire the Loans for its own account in the ordinary course of
such business, provided that subject to the preceding clauses (a) through (d),
the disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.
11.7. Confidentiality. Subject to Section 11.6, the Lenders shall
hold all non-public information obtained pursuant to the requirements of this
Credit Agreement which has been identified as such by Holdings or the Borrower
in accordance with such Lenders' customary procedure for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure to its Affiliates, employees,
auditors, advisors, or counsel or as reasonably required by any bona fide actual
or potential transferee or participant in connection with the contemplated
transfer of any Loans or participation therein (so long as such transferee or
participant agrees to be bound by the provisions of this Section 11.7) or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Lender shall use its reasonable best efforts
(in accordance with customary banking procedures) to notify Holdings or the
Borrower of any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Lender by such governmental agency) for
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disclosure of any such non-public information prior to disclosure of such
information, and provided further that in no event shall any Lender be obligated
or required to return any materials furnished by Holdings, the Borrower or any
of their respective Subsidiaries.
11.8. Indemnification. (a) Each of Holdings and the Borrower
shall, jointly and severally, and hereby agrees to jointly and severally,
indemnify, defend and hold harmless each Agent, each Issuing Bank and each of
the Lenders and their respective directors, officers, agents and employees (the
"Indemnitee") from and against (x) any and all losses, claims, damages,
liabilities or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from the gross negligence or
willful misconduct of the respective Indemnitee) arising out of or by reason of
any litigations, investigations, claims or proceedings which arise out of or are
in any way related to (i) this Credit Agreement, the other Credit Documents or
the transactions contemplated thereby, (ii) the issuance of the Letters of
Credit, (iii) any actual or proposed use by the Borrower of the proceeds of the
Loans or (iv) the Agents' or the Lenders' entering into this Credit Agreement,
the other Credit Documents or any other agreements and documents relating
hereto, including, without limitation, amounts paid in any settlement agreed to
by Holdings or the Borrower, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection with any
of the foregoing (whether or not such lender is a party thereto) and (y) any
such losses, claims (including Environmental Claims), damages, liabilities,
deficiencies, judgments, fees and disbursements (including reasonable attorneys'
and consultants' fees and disbursements) or expenses incurred in connection with
any removal, remedial or other action taken by Borrower or any of the Lenders
(except to the extent resulting from the gross negligence or willful misconduct
of the respective Indemnitee) in connection with compliance by Holdings, the
Borrower or any of their respective Subsidiaries, or any of their respective
properties, with any Environmental Laws or the actual or alleged presence of
Hazardous Materials on any property of the Borrower.
(b) If and to the extent that the Obligations of either Holdings
or the Borrower under this Section 11.8 are unenforceable for any reason, each
of Holdings and the Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of such Obligations which is permissible under
applicable law. Each of Holdings' and the Borrower's Obligations hereunder shall
survive any termination of this Credit Agreement and the other Credit Documents
and the payment in full of the Obligations, and are in addition to, and not in
substitution of, any other of their Obligations set forth in this Credit
Agreement.
(c) In addition, each of Holdings and the Borrower shall, upon
demand, pay to each Agent and any Lender all costs and expenses (including the
reasonable fees and disbursements of counsel and other professionals) paid or
incurred by such Agent or such Lender in (i) enforcing or defending its rights
under or in respect of this Credit Agreement, the other Credit Documents or any
other document or instrument now or hereafter executed and delivered in
connection herewith, (ii) in collecting the Loans, (iii) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (iv) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
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11.9. Entire Agreement; Successors and Assigns. This Credit
Agreement and the other Credit Documents constitute the entire agreement among
Holdings, the Borrower, the Agents and the Lenders (although certain additional
agreements between the Lenders only are contained in the Lender Intercreditor
Agreement), supersedes any prior agreements among them, and shall bind and
benefit Holdings, the Borrower, the Agents and the Lenders and their respective
successors and permitted assigns.
11.10. Amendment or Waiver. Neither this Credit Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties thereto and the Required
Lenders, provided that no such change, waiver, discharge or termination shall,
without the consent of each Lender (other than a Defaulting Lender) affected
thereby, (i) extend the final scheduled maturity of any Revolving Loan or
Revolving Note (it being understood that any waiver of the application of any
prepayment or the method of application of any prepayment to the Revolving Loans
or any mandatory reduction to the Total Commitments shall not constitute an
extension of the final maturity date of such Revolving Loans), or reduce the
rate (other than as a result of waiving the applicability of any post-default
increases in interest rates) or extend the time of payment of interest or Fees
thereon, or reduce the amount thereof, or increase the Commitment of any Lender
over the amount thereof then in effect (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase in the available portion of any Commitment of any Lender, and that an
increase in the available portion of any Commitment of any Lender shall not
constitute an increase in the Commitment of such Lender), (ii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents), (iii) amend, modify or waive any provision of this Section 11.10,
(iv) reduce the percentage specified in the definition of Required Lenders or
change the percentage of holders of Commitments or the aggregate unpaid
principal amount of the Revolving Loans which shall be required for the Lenders
for any of them to take action under this Credit Agreement or (v) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under any Credit Document. No provision of Article 3 or 10 may be amended
without the consent of each Issuing Bank or the Agent, respectively.
11.11. Nonliability of Agents and Lenders. The relationship
between Holdings, the Borrower and their respective Subsidiaries, on the one
hand, and the Lenders and the Agents, on the other hand, shall be solely that of
debtors and creditors. None of the Agents or any Lender shall have any fiduciary
responsibilities to Holdings, the Borrower, or any of their respective
Subsidiaries. None of the Agents or any Lender undertakes any responsibility to
Holdings, the Borrower, or any of their respective Subsidiaries to review or
inform Holdings, the Borrower, or any of their respective Subsidiaries of any
matter in connection with any phase of the business or operations of Holdings,
the Borrower, or any of their respective Subsidiaries.
11.12. Independent Nature of Lenders' Rights. The amounts payable
at any time hereunder to each Lender under such Lender's Note or Notes shall be
a separate and independent debt.
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11.13. Counterparts. This Credit Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
11.14. Effectiveness. This Credit Agreement shall become
effective on the date (the "Restatement Effective Date") on which (i) Holdings,
the Borrower, the Required Lenders (as defined in the Original Credit Agreement
and determined immediately before the occurrence of the Restatement Effective
Date and without giving effect thereto), the Revolving Credit Lenders furnishing
the incremental Revolving Credit Commitments from those as in effect before
giving effect to the Restatement Effective Date, the Term Loan Lenders, and each
Agent listed on the signature pages hereof shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same (including by way of facsimile transmission) to the Administrative Agent
and (ii) the conditions contained in Sections 5.1 and 5.2 are met to the
satisfaction of the Agents and the Required Lenders (determined immediately
after the occurrence of the Restatement Effective Date). Unless the
Administrative Agent has received actual notice from any Lender that the
conditions contained in Sections 5.1 and 5.2 have not been met, upon the
satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon the Administrative Agent's good faith determination
that the conditions described in clause (ii) of the immediately preceding
sentence have been met, then the Restatement Effective Date shall have been
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto had not been met. The Administrative Agent will
give the Borrower and each Lender prompt written notice of the occurrence of the
Restatement Effective Date.
11.15. Headings Descriptive. The headings of the several sections
and subsections of this Credit Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Credit Agreement.
11.16. Maximum Rate. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement or in any other Credit Document,
the Borrower, the Agents and the Lenders hereby agree that all agreements among
them under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly limited
so that in no contingency or event whatsoever shall the amount paid, or agreed
to be paid, to the Agents or any Lender for the use, forbearance, or detention
of the money loaned to the Borrower and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance and
Lender should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding hereunder or
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on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the Borrower. All sums paid or agreed to be paid to
the Agents or any Lender for the use, forbearance, or detention of the
Obligations and other Indebtedness of the Borrower to the Agents or any Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Indebtedness until payment
in full so that the actual rate of interest on account of all such Indebtedness
does not exceed the Highest Lawful Rate throughout the entire term of such
Indebtedness. The terms and provisions of this Section 11.16 shall control every
other provision of this Credit Agreement and all agreements among the Borrower,
the Agents and the Lenders.
11.17. Right of Setoff. In addition to and not in limitation of
all rights of offset that any Lender or the Issuing Bank may have under
applicable law, each Lender and the Issuing Bank shall, upon the occurrence of
any Event of Default and whether or not such Lender or such Issuing Bank has
made any demand or the Obligations of any Credit Party are matured, have the
right, upon prior notice to Holdings or the Borrower, to appropriate and apply
to the payment of the Obligations of Holdings or the Borrower or any of their
respective Subsidiaries all deposits (general or special, time or demand,
provisional or final) then or thereafter held by and other Indebtedness or
property then or thereafter owing by such Lender or such Issuing Bank,
including, without limitation, any and all amounts in the BT Account, the
Concentration Account or the Disbursement Account. Each Lender or the Issuing
Bank exercising such rights shall notify the Administrative Agent thereof and
any amount received as a result of the exercise of such rights shall be
reallocated among the Lenders and the Issuing Bank as set forth in Section 2.10
hereof; provided, however, that failure of the Borrower to receive such notice
shall not impair any Lender's or the Issuing Bank's rights hereunder.
11.18. Other Credit Documents. The Lenders hereby authorize the
Administrative Agent and the Collateral Agent to enter into the various Credit
Documents (or amendments thereto) attached as exhibits to this Credit Agreement
on their behalf, and acknowledge and agree that they are subject to the terms of
the Intercreditor Agreement and the Lender Intercreditor Agreement.
11.19. Certain Provisions Regarding Perfection of Security
Interests. Notwithstanding anything to the contrary contained in this Credit
Agreement or any of the other Credit Documents, the Lenders acknowledge and
agree that, except to the extent that further actions are required to be taken
in accordance with the terms of Section 7.13 of this Credit Agreement, (i) with
respect to Non-Certificated Units from time to time held by the Unit Subsidiary,
certificates of title have not been issued with respect thereto and,
accordingly, no notation of a security interest has been made under the titling
statutes of any State in connection therewith and (ii) with respect to Units (as
defined in the Security Agreement) from time to time leased to customers,
"fixture filings" will not be made under the provisions of the Uniform
Commercial Code as in effect in the relevant State, both because of the
administrative difficulty of ascertaining whether any such Unit is or becomes a
fixture and the inability of the Borrower and its Subsidiaries to provide the
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relevant information which would be required to make such filings.
Notwithstanding the last sentence of Section 7.13, if the Borrower or any of its
Subsidiaries becomes aware that a Certificate of Title is required to be issued
with respect to any Non-Certificated Unit under applicable state law, the
Borrower shall take all steps as may be necessary so that a certificate of title
is issued with respect thereto, on which the security interest of the Collateral
Agent is noted. Furthermore, in the event the Administrative Agent or the
Required Lenders (or, after the Revolving Credit Termination Date, the Requisite
Lenders) reasonably believes that Certificates of Title may be required to be
issued in connection with Non-Certificated Units located in any State, the
Borrower shall promptly (and in any event within 30 days after its receipt of
the respective request) following a request by the Administrative Agent or the
Required Lenders (or, after the Revolving Credit Termination Date, the Requisite
Lenders), cause special counsel or special counsels designated by it (who shall
be reasonably acceptable to the Administrative Agent or the Required Lenders
(or, after the Revolving Credit Termination Date, the Requisite Lenders)) to
issue, with respect to the laws of a requested State or States, an opinion in
form reasonably satisfactory to the Administrative Agent and the Required
Lenders (or, after the Revolving Credit Termination Date, the Requisite Lenders)
as to whether Certificates of Title are required to be issued with respect to
any Non-Certificated Units under the laws of such State or States and, whether
based thereon or upon the advice of their own counsel, if at any time the
Administrative Agent or the Required Lenders (or, after the Revolving Credit
Termination Date, the Requisite Lenders) inform the Borrower that they in good
faith believe that Certificates of Title are required to be issued with respect
to any Non-Certificated Unit under applicable state law and further request that
the actions described in this sentence be taken, then the Borrower shall take
all steps as may be necessary so that, within 90 days from the date of the
respective request, a certificate of title is issued with respect thereto, on
which the security interest of the Collateral Agent is noted; provided that
unless an Event of Default has occurred and is continuing, the Administrative
Agent or the Required Lenders (or, after the Revolving Credit Termination Date,
the Requisite Lenders) shall not, in any event, request an opinion with respect
to any one State more than once in a calendar year. So long as Sections 7.18(a)
and 8.11 of this Credit Agreement are complied with, the provisions of this
Credit Agreement and the other Credit Documents shall be deemed modified to the
extent necessary to permit the foregoing (and so that no violation of this
Credit Agreement or the other Credit Documents exists or shall exist as a result
of the actions permitted to be taken (or not taken) in accordance with the
provisions of preceding clauses (i) and (ii) of the first sentence of this
Section 11.19 unless and until (and then to the extent) required to be taken in
accordance with the two preceding sentences) (including, without limitation, all
conditions precedent, representations, warranties, covenants and other
agreements herein and therein).
11.20. Agreement among Signing R/C Lenders for Benefit of Term
Loan Lenders. Notwithstanding anything to the contrary contained in any Credit
Document or any other agreement, each Revolving Credit Lender which (x) was
party to the Original Credit Agreement and executed and delivered a counterpart
of this amended and restated Credit Agreement on or before the Restatement
Effective Date and (y) each Revolving Credit Lender which originally became a
party hereto on the Restatement Effective Date (and the successors and assigns
of each Lender referenced in preceding clauses (x) and (y))(each of the
foregoing Lenders and their respective successors and assigns are herein called
"Signing R/C Lenders") hereby agrees, for the benefit of each of the Term Loan
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Lenders, and to induce the Term Loan Lenders to enter into this Credit
Agreement, as follows:
(a) such Signing R/C Lender (and its successors and assigns)
shall not vote in favor of any amendment or waiver to this Credit
Agreement or any other Credit Document unless (or any such vote given by
it shall be conditioned upon, and shall not become effective unless) the
Requisite Lenders also have approved such amendment, modification or
waiver;
(b) in addition to the foregoing requirements, such Signing R/C
Lender (and its successors and assigns) shall not vote in favor of any
amendment, modification or waiver of this Credit Agreement which has any
of the effects specified in clauses (i) through (ii) below, in each case
unless such Signing R/C Lender's vote in favor of such matter shall be
conditioned upon (and shall not become effective unless) the Majority
Term Loan Lenders also have approved such matter:
(i) except for releases as a result of sales or
dispositions of Collateral as permitted by the Credit Agreement
as in effect from time to time (and releases after all Term Loans
and related Obligations have been repaid in full), and except for
sales or dispositions of Collateral as a result of any exercise
of remedies pursuant to the Collateral Documents, release any
Liens in favor of the Collateral Agent on any Collateral (except
that such releases may be effected without the consent of the
Majority Term Loan Lenders if (in each case based on
certifications from the Borrower) no Event of Default is in
existence and the aggregate fair market value of Collateral so
released does not exceed $10,000,000 during any period of twelve
consecutive calendar months and does not exceed $25,000,000 in
the aggregate since the Restatement Effective Date); or
(ii) modify any of the provisions of Section 2.5
(excluding clause (a) thereof) in a manner which is adverse to
the Term Loan Lenders as a class (it being understood and agreed
that the consent of the Majority Term Loan Lenders shall not be
required in connection with the waiver by the Required Lenders
(with the consent of the Requisite Lenders) of any mandatory
prepayment otherwise required pursuant to Sections 2.5(j), (k) or
(l), so long as any amounts required to be so applied are applied
to the outstanding Term Loans and to reduce the Revolving Credit
Commitments on the basis contemplated in Section 2.5 as
originally in effect or as modified in accordance with the
provisions of this clause (b)(ii));
(c) in addition to the foregoing requirements, such Signing R/C
Lender (and its successors and assigns) shall not vote in favor of any
amendment, modification or waiver to the provisions of Section 2.5(a) of
this Credit Agreement or the definition of Supermajority Term Loan
Lenders contained herein, in each case unless such Signing R/C Lender's
vote in favor of such matter shall be conditioned upon (and shall not
become effective unless) the Supermajority Term Loan Lenders have also
approved such matter; and
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(d) in addition to the foregoing requirements, such Signing R/C
Lender (and its successors and assigns) shall not vote in favor of any
amendment, modification or waiver of this Credit Agreement or any other
Credit Document which has any of the effects specified in clauses (i)
through (iv) below, in each case unless such Signing R/C Lender's vote
in favor of such matter shall be conditioned upon (and shall not become
effective unless) 100% of the Term Loan Lenders have also approved such
matter:
(i) extend the final scheduled maturity of any Term Loan
or Term Note (it being understood that any waiver of the
application of any prepayment or the method of application of any
prepayment of Term Loans or any mandatory reduction to the Term
Loan Commitments shall not constitute an extension of the final
maturity date of such Term Loan), or reduce the rate (other than
as a result of waiving the applicability of any post-default
increases in interest rates) or extend the time of payment of
interest or Fees thereon, or reduce the amount thereof, or
increase the Commitments of any Term Loan Lender over the amount
thereof then in effect (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Term
Loan Commitments shall not constitute an increase in the
available portion of any Commitment of any Term Loan Lender, and
that an increase in the available portion of any Term Loan
Commitment of any Term Loan Lender shall not constitute an
increase in the Term Loan Commitment of such Term Loan Lender);
(ii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents);
(iii) amend, modify or waive any provision of this Section
11.20; or
(iv) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Credit Agreement.
The foregoing provisions of this Section 11.20 have been entered
into by the Signing R/C Lenders for the benefit of the Term Loan Lenders. If
this Credit Agreement is, on or prior to the Restatement Effective Date,
executed and delivered by 100% of the Lenders with Revolving Credit Commitments
hereunder, then the provisions of this Section 11.20 shall be deemed modified so
that, as a condition to any amendment, modification or waiver described in
preceding clauses (a) through (d), the specified consents of the Requisite
Lenders, Majority Term Loan Lenders, Supermajority Term Loan Lenders or 100% of
the Term Loan Lenders, as the case may be, shall be directly required as a
condition to the amendments, modifications or waivers set forth above, rather
than constituting an agreement solely on the part of the Signing R/C Lenders for
the benefit of the Term Loan Lenders. The provisions of this Section 11.20 shall
cease to be of force or effect at such time, if any, as all Term Loans have been
repaid in full and all Obligations with respect thereto (excluding surviving
indemnity obligations) have also been repaid.
11.21. Post Closing Actions. Notwithstanding anything to the
contrary contained
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in this Credit Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:
(a) Mortgage Amendments; etc. The Borrower was not required to
satisfy the conditions precedent set forth in Section 5.1(y) on the Restatement
Effective Date. Such conditions precedent shall be satisfied in full not later
than the 30th day after the Restatement Effective Date. By such date, the
Borrower shall have taken all actions specified in Section 5.1(y) to the
satisfaction of the Administrative Agent.
(b) Unit Certificates. With respect to Certificated Units of SMI
and its Subsidiaries acquired pursuant to the Acquisition only, the Borrower and
its Subsidiaries were not required to satisfy the condition precedent set forth
in Section 5.1(d)(C) on the Restatement Effective Date. Such condition precedent
shall be satisfied in full not later than the 90th day after the Restatement
Effective Date. By such date, the Borrower shall have provided evidence that,
with respect to all Certificated Units of SMI and its Subsidiaries, either (x) a
notation of the security interest of the Collateral Agent has been made on the
certificate of title with respect thereto which notation shall, under applicable
state law, perfect the Collateral Agent's security interest therein or (y) an
unqualified opinion of counsel satisfactory to the Administrative Agent to the
effect that such notation of a security interest on the relevant certificate of
title under applicable state law is not required to perfect the security
interests therein created pursuant to the Security Agreement.
(c) Automobiles and Trucks. The Borrower was not required to take
steps necessary to perfect the security interests purported to be created by the
Security Agreement in automobiles and trucks. The Collateral Agent or the
Required Lenders at any time may, but shall not be required to, request that the
Borrower and/or any of its Subsidiaries take any and all actions with respect to
such automobiles and/or trucks necessary to create a first priority perfected
lien of the Collateral Agent on any automobiles or trucks pledged pursuant to
the Security Agreement.
(d) UCC Filings; Filings with respect to Intellectual Property;
etc. (i) SMI and its Subsidiaries were not required to have filed (or cause to
have filed) on or prior to the Restatement Effective Date Financing Statements
(Form UCC-1) or any filings with the United States Patent and Trademark Office
or the United States Copyright Office necessary to perfect the security interest
purported to be created by the Security Agreement. Not later then the tenth day
after the Restatement Effective Date, SMI and its Subsidiaries shall have filed
(or cause to have filed) all of such Financing Statements (Form UCC-1) and any
filings with the United States Patent and Trademark Office or the United States
Copyright Office necessary to perfect the security interest purported to be
created by the Security Agreement.
(ii) On or prior to the 45th day after the Restatement Effective
Date, each of Holdings and the Borrower shall have taken (or caused to have been
taken) all necessary action (or other action as may be reasonably requested by
the Administrative Agent) to evidence the repayment of all Indebtedness of SMI
and its Subsidiaries and any Indebtedness (including, without limitation, the
Senior Secured Notes) of Holdings or any of its Subsidiaries repaid on or
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prior to the Restatement Effective Date and the release of all security
interests and Liens on the assets of Holdings, the Borrower, SMI or any of their
respective Subsidiaries granted in connection with such Indebtedness, such
evidence to be in form and substance reasonably satisfactory to the
Administrative Agent. Without limiting the foregoing, on or prior to the 45th
day after the Restatement Effective Date, there shall have been delivered (i)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the appropriate equivalent) was filed with respect to Holdings, the
Borrower, SMI or any of their respective Subsidiaries in connection with the
security interests created with respect to such Indebtedness and the
documentation related thereto, (ii) terminations or assignments of any security
interest in, or Lien on, any patents, trademarks, copyrights, or similar
interests of Holdings, the Borrower, SMI or any of their respective Subsidiaries
on which filings, if any, have been made and (iii) terminations of all
mortgages, leasehold mortgages and deeds of trust, if any, created with respect
to property of, Holdings, the Borrower, SMI or any of their respective
Subsidiaries, in each case, to secure the obligations relating to such
Indebtedness, all of which shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(e) Collateral Examination Report. The Borrower was not required
to deliver the collateral examination report specified in clause (i) of Section
5.1(u) on the Restatement Effective Date. Such collateral examination report, in
form and substance reasonably satisfactory to the Agents, shall be delivered to
the Agents within 120 days after the Restatement Effective Date.
(f) Transfer of Assets to Unit Subsidiary; Master Lease
Agreement; etc. On the Restatement Effective Date, SMI was not required to
satisfy the conditions precedent set forth in Section 5.1(cc) relating to (x)
the transfer by SMI of its Non-Qualified Units to the Unit Subsidiary as a
capital contribution thereto and (y) the entering by SMI into a Master Lease
Agreement with the Unit Subsidiary (pursuant to which the Non-Qualified Units
from time to time held by the Unit Subsidiary shall be leased to SMI). Such
conditions precedent shall be satisfied in full not later than the 60th day
after the Restatement Effective Date. By such date, the Borrower shall have
taken, or shall have caused SMI to take, all actions specified in Section
5.1(cc) to the satisfaction of the Administrative Agent (it being understood and
agreed that SMI may enter into a separate Master Lease Agreement with the Unit
Subsidiary or, in lieu thereof, may become a party to the existing Master Lease
Agreement by and between the Borrower and the Unit Subsidiary).
All provisions of this Credit Agreement and the other Credit
Documents (including, without limitation, all conditions precedent,
representations, warranties, covenants and other agreements herein and therein)
shall be deemed modified to the extent necessary to effect the foregoing (and to
permit the taking of the actions described above within the time periods, or in
the case of preceding clause (c) to the extent, required above, rather than as
otherwise provided in the Credit Documents); provided, that (x) to the extent
any representation and warranty would not be true because the foregoing actions
were not taken on the Restatement Effective Date, the respective representation
and warranty shall be required to be true and correct in all material respects
at the time the respective action is taken (or was required to be taken) in
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accordance with the foregoing provisions of this Section 11.21 and (y) all
representations and warranties relating to the Collateral Documents shall be
required to be true immediately after the actions required to be taken by this
Section 11.21 have been taken (or were required to be taken). The acceptance of
the benefits of each Credit Event shall constitute a representation, warranty
and covenant by the Borrowers to each of the Lenders that the actions required
pursuant to this Section 11.21 will be, or have been, taken within the relevant
time periods referred to in this Section 11.21 and that, at such time, all
representations and warranties contained in this Credit Agreement and the other
Credit Documents shall then be true and correct without any modification
pursuant to this Section 11.21, the parties hereto acknowledge and agree that
the failure to take any of the actions required above, within the relevant time
periods required above, shall give rise to an immediate Event of Default
pursuant to this Credit Agreement.
11.22. Intercreditor Agreement; Priorities Among Various Holders
of Obligations; etc. (a) The Lenders acknowledge and agree that an Intercreditor
Agreement in the form of Exhibit N (as modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof, the "Intercreditor
Agreement") was previously entered into in connection with the Original Credit
Agreement and that same may remain effective in accordance with the terms
thereof.
(b) As more fully provided in (and subject to the express
provisions of) the various Collateral Documents and the Lender Intercreditor
Agreement, it is acknowledged and agreed that all proceeds of Collateral applied
in accordance with the various Collateral Documents are required to be applied,
as between the various holders of Obligations (as used in this Section 11.22,
the term "Obligations" shall have the meaning provided in the Lender
Intercreditor Agreement): (i) first, to the payment of fees, expenses and
indemnities and any other Obligations due and payable to the Collateral Agent,
(ii) second, to the payment of Fees, Expenses and other Obligations due and
payable to the Administrative Agent, (iii) third, to the payment of Fees,
Expenses and any other Obligations due and payable to the Issuing Bank, (iv)
fourth, to the payment of interest due on the Revolving Loans and Letter of
Credit Obligations and any Fees or other regularly accruing fees due and payable
to the Revolving Credit Lenders (in their capacities as such) under any of the
Credit Documents, (v) fifth, to the payment of principal on the Revolving Loans
and drawn and undrawn amounts relating to outstanding Letter of Credit
Obligations, (vi) sixth, to the payment of any other Obligations due and payable
to the Revolving Credit Lenders (in their capacities as such) under any of the
Credit Documents, (vii) seventh, to the payment of any then due and owing
Obligations arising under any Interest Rate Agreement secured pursuant to the
Collateral Documents, (viii) eighth, to the payment of interest due on the Term
Loans and any Fees or other regularly accruing fees due and payable to the Term
Loan Lenders (in their capacities as such) under any of the Credit Documents,
(ix) ninth, to the payment of principal on the Term Loans and (x) tenth, to the
payment of any other Obligations due and payable to the Term Loan Lenders (in
their capacities as such) under any of the Credit Documents.
11.23. No Novation. Each of Holdings, the Borrower, the Agents
and the Lenders acknowledge and agree, for avoidance of any doubt, that (i) this
Credit Agreement amends and restates the Original Credit Agreement, (ii) the
Obligations outstanding under the
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Original Credit Agreement have not been extinguished, continue without
interruption, and have not been discharged by this Credit Agreement
(notwithstanding that all Revolving Loans under the Original Credit Agreement
which are outstanding on the Restatement Effective Date shall be repaid in full
on the Restatement Effective Date and new Revolving Loans under this Credit
Agreement shall be incurred on the Restatement Effective Date), (iii) the
Obligations outstanding under the Original Credit Agreement are part of the
Obligations under this Credit Agreement, (iv) the obligation of the Borrower to
repay the Obligations outstanding under the Original Credit Agreement are
evidenced by the Notes under this Credit Agreement, which Notes supersede and
replace in their entirety the Notes under the Original Credit Agreement and (v)
this Credit Agreement (and the extensions of credit made hereunder) and the
other Credit Documents are not intended to, and shall not, result in a novation
of the Obligations outstanding under the Original Credit Agreement (or the
extensions of credit made thereunder).
ARTICLE 12.
Holdings Secured Guaranty
12.1. The Holdings Secured Guaranty. In order to induce the
Agents, the Issuing Bank and the Lenders to enter into this Credit Agreement and
to extend credit hereunder and in recognition of the direct benefits to be
received by Holdings from the proceeds of the Loans and the issuance of the
Letters of Credit, Holdings hereby agrees with the Agents, the Issuing Bank and
the Lenders as follows: Holdings hereby unconditionally and irrevocably
guarantees the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all Obligations of the Borrower to the
Agents, the Issuing Bank and the Lenders hereunder. If any or all of the
Obligations of the Borrower to the Agents, the Issuing Bank and the Lenders
becomes due and payable hereunder, Holdings unconditionally promises to pay such
Obligations to the Agents, the Issuing Bank and the Lenders, or order, on
demand, together with any and all reasonable expenses which may be incurred by
the Agents, the Issuing Bank or the Lenders in collecting any of the
Obligations. This guaranty constitutes a guaranty of payment and not of
collection, and applies to all Obligations of the Borrower arising in connection
with this Credit Agreement and the other Credit Documents, in each case,
heretofore, now, or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated, determined or
undetermined, whether or not such Obligations are from time to time reduced, or
extinguished and thereafter increased or incurred, whether the Borrower may be
liable individually or jointly with others, whether or not recovery upon such
Obligations may be or hereafter become barred by any statute of limitations, and
whether or not such Obligations may be or hereafter become otherwise
unenforceable.
12.2. Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all Obligations of the Borrower to
the Agents, the Issuing Bank and the Lenders whether or not due or payable by
the Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 9.1(e), and unconditionally and irrevocably promises to pay
all such Obligations to the Agents, the Issuing Bank and the Lenders, or order,
on demand, in lawful money of the United States.
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12.3. Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Obligations of the Borrower whether executed by Holdings, any other guarantor or
by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agents, the Issuing Bank or the Lenders on the Obligations which such Agents,
the Issuing Bank or such Lender repay the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
12.4. Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
Holdings whether or not action is brought against any other guarantor or the
Borrower and whether or not any other guarantor or the Borrower be joined in any
such action or actions. Holdings waives, to the fullest extent permitted by law,
the benefit of any statute of limitations affecting its liability hereunder or
the enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall, to the
fullest extent permitted by law, operate to toll the statute of limitations as
to Holdings.
12.5. Authorization. Holdings authorizes the Agents, the Issuing
Bank and the Lenders without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) subject to the prior agreement of the Borrower (to the extent
required by the Credit Agreement), change the manner, place or terms of
payment of, and/or change or extend the time of payment of, renew,
increase, accelerate or alter, any of the Obligations (including any
increase or decrease in the rate of interest thereon), any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the Holdings Secured Guaranty herein made shall apply to
the Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Obligations and
sell, exchange, release, surrender, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Obligations
or any liabilities (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
the Borrower
-143-
or other obligors;
(e) settle or compromise any of the Obligations, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to its creditors other than the
Agents, the Issuing Bank and the Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Agents, the Issuing
Bank and the Lenders regardless of what liability or liabilities of
Holdings or the Borrower remain unpaid; and/or
(g) consent to or waive any breach of, or any act, omission or
default under, this Credit Agreement or any of the instruments or
agreements referred to herein, or otherwise, with the agreement of the
Borrower, amend, modify or supplement this Credit Agreement or any of
such other instruments or agreements.
12.6. Reliance. It is not necessary for the Agents, the Issuing
Bank or the Lenders to inquire into the capacity or powers of the Borrower or
its Subsidiaries or the officers, directors, partners or agent acting or
purporting to act on its behalf, and any Obligations made or created in reliance
upon the professed exercise of such powers shall be guaranteed hereunder.
12.7. Subordination. Any Obligations of the Borrower now or
hereafter owing to Holdings is hereby subordinated in right of payment to the
Obligations of the Borrower owing to the Agents, the Issuing Bank and the
Lenders; provided that payment may be made by the Borrower on any such
Obligations owing to Holdings so long as the same is not prohibited by this
Credit Agreement; and provided further, that if the Administrative Agent so
requests at a time when an Event of Default exists, all such Obligations of the
Borrower to Holdings shall be collected, enforced and received by Holdings as
trustee for the Agents, the Issuing Bank and the Lenders and be paid over to the
Agents, the Issuing Bank and the Lenders on account of the Obligations of the
Borrower to the Agents, the Issuing Bank and the Lenders, but without affecting
or impairing in any manner the liability of Holdings under the other provisions
of this Holdings Secured Guaranty. Prior to the transfer by Holdings of any note
or negotiable instrument evidencing any Obligations of the Borrower to Holdings,
Holdings shall ▇▇▇▇ such note or negotiable instrument with a legend that the
same is subject to this subordination.
12.8. Waiver. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Agents, the
Issuing Bank or the Lenders to (i) proceed against the Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from the Borrower, any other guarantor or any other party or (iii) pursue any
other remedy in the Agents', the Issuing Bank's or the Lenders' power
whatsoever. Holdings waives any defense based on or arising out of any defense
of the Borrower, any other guarantor or any other party other than payment in
full of the Obligations, including, without limitation, any defense based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower
-144-
other than payment in full of the Obligations. The Agents, the Issuing Bank and
the Lenders may, at their election, foreclose on any security held by the
Agents, the Issuing Bank, the Collateral Agent or the Lenders by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Agents, the Issuing Bank and the
Lenders may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of Holdings hereunder
except to the extent the Obligations has been paid. Holdings waives, to the
fullest extent permitted by law, any defense arising out of any such election by
the Agents, the Issuing Bank and the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Holdings against any Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Holdings
Secured Guaranty, and notices of the existence, creation or incurring of new or
additional Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Agents, the Issuing Bank and the Lenders shall
have no duty to advise Holdings of information known to them regarding such
circumstances or risks.
12.9. Limitation on Enforcement. The Agents, the Issuing Bank and
the Lenders agree that this Holdings Secured Guaranty may be enforced only by
the action of the Administrative Agent, in each case acting upon the
instructions of the Required Lenders or the Requisite Lenders and that the
Issuing Bank and each Lender shall not have any right individually to seek to
enforce or to enforce this Holdings Secured Guaranty, it being understood and
agreed that such rights and remedies may be exercised by the Administrative
Agent for the benefit of the Agents, the Issuing Bank and the Lenders upon the
terms of this Credit Agreement. The Agents, the Issuing Bank and the Lenders
further agree that this Holdings Secured Guaranty may not be enforced against
any Affiliate, director, officer, employee or stockholder of Holdings.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Credit Agreement as of the date
first above written.
SCOTSMAN HOLDINGS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: President
▇▇▇▇▇▇▇▇ SCOTSMAN, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: President
BANKERS TRUST COMPANY,
as Issuing Bank
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
BT COMMERCIAL CORPORATION,
Individually and as Administrative Agent and
Co-Syndication Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
NATIONSBANK, N.A.,
Individually and as Co-Syndication Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
Individually and as Documentation Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Authorized Signatory
BANKBOSTON, N.A
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Authorized Signatory
THE CIT GROUP/BUSINESS CREDIT, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Assistant Vice President
CONGRESS FINANCIAL CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Assistant Vice President
CRESCENT/MACH I PARTNERS, L.P.
by: TCW Asset Management Company
Its Investment Manager
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
DEBT STATEGIES FUND III, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Authorized Signatory
DIME COMMERCIAL CORP.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
FLEET BANK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
FREEMONT FINANCIAL CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President & Manager
GREEN TREE FINANCIAL SERVICING CORPORATION
By /s/ C.A. Gouskos
--------------------------------
Title: Senior Vice President
▇▇▇▇▇▇ FINANCIAL, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Vice President
IBJ ▇▇▇▇▇▇▇▇ BUSINESS CREDIT CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
LASALLE NATIONAL BANK
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
MERCANTILE SAFE DEPOSIT AND TRUST COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Vice President
NATIONAL BANK OF CANADA, A
CANADIAN CHARTERED BANK
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
NATIONAL CITY COMMERICAL FINANCE, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Vice President
OAK HILL SECURITIES FUND, L.P.
By:Oak Hill Securities GenPar, L.P. its General
Partner
By:Oak Hill Securities MGP, Inc., its General
Partner
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Vice President
SANWA BUSINESS CREDIT CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Authorized Signatory
SOCIETE GENERALE
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Director
SUMMIT COMMERCIAL/GIBRALTAR CORP.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Executive Vice President
TRANSAMERICA BUSINESS CREDIT CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION, formerly known as
First Bank National Association
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
▇▇▇▇▇ FARGO BANK, N.A.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Relationship Manager
TABLE OF CONTENTS
Page
----
ARTICLE 1.
Definitions...................................................................1
1.1. General Definitions............................................................1
1.2. Accounting Terms and Determinations...........................................36
1.3. Other Defined Terms...........................................................37
ARTICLE 2.
Amount and Terms of Credit...................................................37
2.1. The Commitments...............................................................37
2.2. Determination of Borrowing Base for Revolving Loans; etc......................38
2.3. Borrowing Mechanics...........................................................39
2.4. Settlements Among the Payments Administrator and the Lenders..................42
2.5. Mandatory and Voluntary Payments: Mandatory and Voluntary Reduction of
Commitments..................................................................45
2.6. Payments and Computations.....................................................53
2.7. Maintenance of Account........................................................54
2.8. Statement of Account..........................................................55
2.9. Taxes.........................................................................55
2.10. Sharing of Payments...........................................................57
ARTICLE 3.
Letters of Credit............................................................58
3.1. Issuance of Letters of Credit.................................................58
3.2. Terms of Letters of Credit....................................................59
3.3. Revolving Credit Lenders'Participation........................................59
3.4. Notice of Issuance............................................................59
3.5. Payment of Amount Drawn Under Letters of Credit...............................60
3.6. Payment by Revolving Credit Lenders...........................................60
3.7. Nature of Issuing Bank's Duties...............................................61
3.8. Obligations Absolute..........................................................61
(i)
ARTICLE 4.
Interest, Fees and Expenses..................................................62
4.1. Interest on Eurodollar Rate Loans.............................................62
4.2. Interest on Base Rate Loans...................................................63
4.3. Notice of Continuation and Notice of Conversion...............................63
4.4. Interest After Default........................................................64
4.5. Reimbursement of Expenses.....................................................65
4.6. Unused Line Fee...............................................................65
4.7. Letter of Credit Fees.........................................................65
4.8. Other Fees and Expenses.......................................................66
4.9. Authorization to Charge Account...............................................66
4.10. Indemnification in Certain Events............................................66
4.11. Calculations.................................................................67
4.12. Change of Applicable Lending Office..........................................67
ARTICLE 5.
Conditions Precedent.........................................................68
5.1. Conditions to Initial Loans and Letters of Credit.............................68
(a) Execution of Agreement; Notes...........................................68
(b) Officer's Certificate...................................................68
(c) Opinions of Counsel.....................................................68
(d) Security Agreement......................................................68
(e) Collateral Access Agreements............................................69
(f) Collection Bank Agreements; Concentration Account Agreement.............70
(g) Borrowing Base Certificate..............................................70
(h) Equity Financing........................................................70
(i) Consummation of Acquisition.............................................71
(j) Indebtedness...................................................................71
(k) Approvals...............................................................71
(l) Material Adverse Change, etc............................................72
(m) Litigation.....................................................................72
(n) Corporate Proceedings..........................................................72
(o) Plans; Collective Bargaining Agreements; Existing Indebtedness
Agreements; Shareholders'Agreements; Management Agreements;
Employment Agreements; Tax Sharing Agreements; Material Contracts.....73
(p) Solvency Certificate....................................................74
(q) Projections; etc........................................................75
(r) Insurance Policies......................................................75
(s) Consent Letter..........................................................75
(t) Payment of Fees.........................................................75
(u) Collateral Examination and Appraisal....................................75
(ii)
(v) Environmental Reports...................................................75
(w) Subsidiaries Guaranty...................................................75
(x) Pledge Agreement........................................................76
(z) Deposit Account Agreement...............................................76
(aa) Bailee Agreement.......................................................76
(bb) Custodian Agreement....................................................77
(cc) Unit Subsidiary; Transfer of Assets Thereto; Master Lease
Agreements; etc.......................................................77
(dd) Original Credit Agreement; etc.........................................77
5.2. Conditions to all Credit Events...............................................78
ARTICLE 6.
Representations and Warranties...............................................78
6.1. Corporate Status..............................................................79
6.2. Corporate Power and Authority.................................................79
6.3. No Violation..................................................................80
6.4. Litigation....................................................................80
6.5. Use of Proceeds...............................................................80
6.6. Governmental Approvals........................................................80
6.7. Investment Company Act........................................................80
6.8. Public Utility Holding Company Act............................................80
6.9. True and Complete Disclosure..................................................80
6.10. Financial Condition; Financial Statements....................................81
6.11. Locations of Offices, Records, Inventory and Rental Equipment................81
6.12. Fictitious Business Names....................................................82
6.13. Security Interests...........................................................82
6.14. Tax Returns and Payments.....................................................82
6.15. Compliance with ERISA........................................................83
6.16. Subsidiaries.................................................................84
6.17. Intellectual Property; etc...................................................84
6.18. Compliance with Statutes, etc................................................84
6.19. Properties...................................................................85
6.20. Labor Relations; Collective Bargaining Agreements............................85
6.21. Restrictions on Subsidiaries.................................................86
6.22. Status of Accounts...........................................................86
6.23. Material Contracts...........................................................86
6.24. Existing Indebtedness and Operating Leases...................................86
6.25. Consummation of Acquisition; Representations and Warranties in
Acquisition Agreement........................................................87
6.26. Guarantee of Certain Notes; Subordinated Guarantor Senior Indebtedness.......87
6.27. Custodians...................................................................87
6.28. Year 2000....................................................................87
(iii)
ARTICLE 7.
Affirmative Covenants........................................................88
7.1. Financial Information.........................................................88
7.2. Real Estate Appraisals........................................................92
7.3. Corporate Franchises..........................................................92
7.4. Compliance with Statutes, etc.................................................93
7.5. ERISA.........................................................................94
7.6. Good Repair...................................................................95
7.7. Books and Records.............................................................95
7.8. Collateral Records............................................................96
7.9. Security Interests............................................................96
7.10. Insurance; Casualty Loss.....................................................96
7.11. Taxes........................................................................97
7.12. End of Fiscal Years; Fiscal Quarters.........................................98
7.13. Further Assurances...........................................................98
7.14. Maintenance of Separateness..................................................98
7.15. Collateral Access Agreements.................................................99
7.16. New Subsidiaries.............................................................99
7.17. Permitted Acquisitions......................................................100
7.18. Unit Subsidiary; Provisions Relating to Units; etc..........................101
ARTICLE 8.
Negative Covenants..........................................................101
8.1. Consolidation, Merger, Sale or Purchase of Assets, etc.......................101
8.2. Liens........................................................................104
8.3. Indebtedness.................................................................106
8.4. Capital Expenditures.........................................................107
8.5. Investments..................................................................108
8.6. Dividends, etc...............................................................110
8.7. Transactions with Affiliates.................................................111
8.8. Changes in Business..........................................................112
8.9. Interest Coverage Ratio......................................................113
8.10. Utilization.................................................................113
8.11. Creation of Subsidiaries....................................................113
8.12. Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Governing Documents, Preferred Stock and Certain Other
Agreements; etc.............................................................114
8.13. Issuance of Stock...........................................................114
8.14. Limitation on Restrictions Affecting Subsidiaries...........................115
8.15. No Additional Bank Accounts.................................................115
8.16. No Excess Cash..............................................................116
8.17. Account Terms...............................................................116
(iv)
8.18. Permitted Preferred Stock...................................................116
8.19. Unit Subsidiary.............................................................116
ARTICLE 9.
Events of Default and Remedies..............................................117
9.1. Events of Default............................................................117
ARTICLE 10.
The Agents..................................................................120
10.1. Appointment.................................................................120
10.2. Nature of Duties of Agents..................................................121
10.3. Lack of Reliance on Agents..................................................121
10.4. Certain Rights of the Administrative Agent..................................121
10.5. Reliance by Administrative Agent............................................122
10.6. Indemnification of Agents...................................................122
10.7. The Agents in their Individual Capacities...................................122
10.8. Holders of Notes............................................................123
10.9. Resignation of Agents; Successor Administrative Agent; etc..................123
10.10. Collateral Matters.........................................................124
10.11. Actions with Respect to Defaults...........................................125
10.12. Delivery of Information....................................................125
10.13. Execution and Delivery of Lender Intercreditor Agreement...................125
ARTICLE 11.
Miscellaneous...............................................................126
11.1. Submission to Jurisdiction; Waivers.........................................126
11.2. Waiver of Jury Trial........................................................127
11.3. Governing Law...............................................................127
11.4. Delays: Partial Exercise of Remedies........................................127
11.5. Notices.....................................................................127
11.6. Benefit of Agreement........................................................127
11.7. Confidentiality.............................................................131
11.8. Indemnification.............................................................132
11.9. Entire Agreement; Successors and Assigns....................................133
11.10. Amendment or Waiver........................................................133
11.11. Nonliability of Agents and Lenders.........................................133
11.12. Independent Nature of Lenders'Rights.......................................133
11.13. Counterparts...............................................................134
11.14. Effectiveness..............................................................134
11.15. Headings Descriptive.......................................................134
11.16. Maximum Rate...............................................................134
(v)
11.17. Right of Setoff............................................................135
11.18. Other Credit Documents.....................................................135
11.19. Certain Provisions Regarding Perfection of Security Interests..............135
11.20. Agreement among Signing R/C Lenders for Benefit of Term Loan Lenders.......136
11.21. Post Closing Actions.......................................................138
ARTICLE 12.
Holdings Secured Guaranty...................................................142
12.1. The Holdings Secured Guaranty...............................................142
12.2. Bankruptcy..................................................................142
12.3. Nature of Liability.........................................................143
12.4. Independent Obligation......................................................143
12.5. Authorization...............................................................143
12.6. Reliance....................................................................144
12.7. Subordination...............................................................144
12.8. Waiver......................................................................144
12.9. Limitation on Enforcement...................................................145
(vi)