AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of September 26, 1996
respecting a loan
of up to $38,000,000
among
PLM EQUIPMENT GROWTH FUND V
TRADER VESSEL LIMITED PARTNERSHIP
TRADER VESSEL INC.
CALIFORNIA VESSEL LIMITED PARTNERSHIP
CALIFORNIA VESSEL INC.
COLUMBUS VESSEL LIMITED PARTNERSHIP
COLUMBUS VESSEL INC.
REDCAR INVESTMENTS LIMITED
as Companies
and
CHRISTIANIA BANK OG KREDITKASSE
INTERNATIONALE NEDERLANDEN LEASE STRUCTURED FINANCE B.V.
AND SUCH OTHER BANKS AND FINANCIAL INSTITUTIONS
AS MAY HEREAFTER BE NAMED HEREIN
as Lenders
and
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH
as Agent and Security Trustee
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
INDEX
CLAUSE PAGE
1 LOAN, PURPOSE 2
2 DEFINITIONS AND INTERPRETATION 2
3 INTEREST AND INTEREST PERIODS 10
4 REPAYMENT AND PREPAYMENT 11
5 CONDITIONS PRECEDENT 12
6 REPRESENTATIONS AND WARRANTIES 16
7 COVENANTS 19
8 SECURITY TRUSTEE 27
9 EVENTS OF DEFAULT 41
10 FEES AND EXPENSES 46
11 PAYMENTS AND CALCULATIONS 46
12 NO COUNTERCLAIM, TAXATION 47
13 CHANGES IN CIRCUMSTANCES 47
14 FUNDING LOSSES 49
15 SECURITY 50
16 COMMUNICATIONS 50
17 ASSIGNMENTS 51
18 MISCELLANEOUS 51
19 LAW AND JURISDICTION 52
20 RIGHTS OF CONTRIBUTION 53
21 NONRECOURSE 53
22 RELEASE OF CERTAIN COMPANIES 54
(ii)
SCHEDULE 1 THE LENDERS
SCHEDULE 2 LIENS
SCHEDULE 3 APPROVED LIST OF APPRAISERS
APPENDIX A FORM OF PROMISSORY NOTE
APPENDIX B FORM OF LIBERIAN MORTGAGE
APPENDIX C FORM OF DEED OF COVENANTS
APPENDIX D [Intentionally omitted.]
APPENDIX E FORM OF SECURITY AGREEMENT
APPENDIX F FORM OF ASSIGNMENT OF CHARTER
APPENDIX G FORM OF PLEDGE AGREEMENT
APPENDIX H FORM OF AIRCRAFT MORTGAGE
APPENDIX I FORM OF BENEFICIAL INTEREST SECURITY AGREEMENT
APPENDIX J FORM OF COMPLIANCE CERTIFICATE
APPENDIX K FORM OF ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS
APPENDIX L FORM OF NOTICE AND ACKNOWLEDGMENT OF MORTGAGE
-1-
THIS AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement") dated as of September
26, 1996
BY AND AMONG
(1) PLM EQUIPMENT GROWTH FUND V, a California limited partnership
(hereinafter called "EGF V");
(2) TRADER VESSEL LIMITED PARTNERSHIP, a California limited partnership
(hereinafter called "Trader");
(3) TRADER VESSEL INC., a California corporation (hereinafter called
"TVI");
(4) CALIFORNIA VESSEL LIMITED PARTNERSHIP, a California limited
partnership (hereinafter called "California");
(5) CALIFORNIA VESSEL INC., a Wyoming corporation (hereinafter called
"CVI");
(6) COLUMBUS VESSEL LIMITED PARTNERSHIP, a California limited partnership
(hereinafter called "Columbus");
(7) COLUMBUS VESSEL INC., a Wyoming corporation (hereinafter called
"COVI");
(8) REDCAR INVESTMENTS LIMITED, a Hong Kong company (hereinafter called
"Redcar", and together with EGF V, Trader, TVI, California, CVI,
Columbus and COVI, as joint and several borrowers, hereinafter called
the "Companies");
(9) The LENDERS listed on Schedule 1 hereto (hereinafter called the
"Lenders"); and -------
(10) CHRISTIANIA BANK OG KREDITKASSE, New York Branch ("CBK"), as agent
and security trustee (hereinafter called "Agent" or "Security
Trustee").
RECITALS
(A) The Lenders made available to the Companies a loan facility of up to
Thirty Eight Million Dollars ($38,000,000) pursuant to, upon and
subject to the terms and conditions of the Loan Agreement dated as of
November 8, 1991, as amended by an Addendum No. 1 dated as of April
27, 1992 (as so amended, the "Original Loan") as evidenced by a
Secured Joint and Several Promissory Note of the Companies dated
November 14, 1991 as endorsed by Endorsement to Secured Promissory
Note dated as of April 27, 1992 executed by Redcar Investments
Limited.
(B) Pursuant to an Assignment of Cash Collateral dated May 30, 1996
executed by EGF V in favor of the Agent, the Lenders released their
first preferred mortgage on DUAL RIG 86, and EGF V granted to the
Agent a security interest in a $10,750,000 cash collateral deposit.
(C) The parties hereto desire to amend certain covenants and other
provisions contained in the Original Loan Agreement; to add certain
additional obligors; to pledge additional equipment (which is owned
by the Owner Trustee for the benefit of EGF V pursuant to the Trust
Agreement) to the Agent and the Lenders to secure the repayment of
the Loan and the obligation of the Companies under this Agreement,
the Note and the Security Documents; to release Balboa Marine Limited
Partnership, a California limited partnership ("Balboa"), Balboa
Marine Inc., a California corporation ("BMI"), Divisadero ------ ---
Vessel Limited Partnership, a California limited partnership
("Divisadero"), Divisadero Vessel Inc., a ---------- California
corporation ("DVI"), Ashbury Street Limited Partnership, a California
limited partnership --- ("Ashbury") and Ashbury Street Inc., a
California corporation ("ASI") from the obligations under the
--------- --- Original Loan Agreement; and to restate the Original
Loan Agreement as set forth herein.
NOW THEREFORE the parties hereto agree that, upon satisfaction of the
conditions set forth in Section 5, the Original Loan Agreement shall be amended
and restated to read in its entirety as follows:
1. LOAN, PURPOSE
1.01 Subject to the terms of this Agreement and in reliance on the
representations and warranties of the Companies set out in Clause
6.01 of the Original Loan Agreement, the Lenders made available to
the Companies on a joint and several basis a loan facility having an
aggregate principal amount of up to $38,000,000 for the purposes of
financing the acquisition of additional equipment for EGF V's
equipment portfolio and to provide working capital for the Companies,
the entire principal amount of which is outstanding on the date
hereof.
2. DEFINITIONS AND INTERPRETATION
2.01 In this Agreement, the words, expressions and other provisions
specified below shall, except where the context otherwise requires,
have the meanings and effect prescribed below.
"Act" has the meaning specified in Clause 8.04 hereof;
"Agent" means Christiania Bank og Kreditkasse, New York branch,
acting in its capacity as agent for the Lenders under this Agreement
and includes (a) any other branch or office through which the Agent
may be acting from time to time and (b) where the context so admits,
the Agent's successors and assigns;
"Aircraft" means (i) Aircraft 1, Aircraft 2, Aircraft 3, Aircraft 4,
Aircraft 5, Aircraft 6 and (ii) such other aircraft as the Companies
may hereafter mortgage as security for the obligations of the
Companies under this Agreement, the Note and the Security Documents,
or any of them as the context requires, as the same are further
described in the respective Aircraft Mortgages;
"Aircraft 1" means the Canadian registered Boeing 737-200 (msn.
22257), as the same is further described in the relevant Aircraft
Mortgage;
"Aircraft 2" means the Canadian registered Boeing 737-200 (msn.
22264), as the same is further described in the relevant Aircraft
Mortgage;
"Aircraft 3" means the Canadian registered DHC-8-102 (msn. 190), as
the same is further described in the relevant Aircraft Mortgage;
"Aircraft 4" means the U.S. registered ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ DC-9-32 (msn.
48112), as the same is further described in the relevant Aircraft
Mortgage;
"Aircraft 5" means the U.S. registered De Havilland DHC-8-102 (msn.
016), as the same is further described in the relevant Aircraft
Mortgage;
"Aircraft 6" means the U.S. registered De Havilland DHC-8-102 (msn.
019), as the same is further described in the relevant Aircraft
Mortgage;
"Aircraft Mortgages" means (i) each first priority Aircraft Mortgage
and Security Agreement executed by the Owner Trustee in favor of the
Security Trustee in respect of Aircraft 4, Aircraft 5 and Aircraft 6,
(ii) each first priority Aircraft Mortgage and Security Agreement
executed by the Owner Trustee in favor of the Security Trustee in
respect of Aircraft 1, Aircraft 2 and Aircraft 3 and (iii) any other
aircraft mortgage in respect of Aircraft executed in favor of the
Security Trustee by the owner of such Aircraft or any of them as the
context requires, each in form and substance satisfactory to the
Agent, as the same may be amended, supplemented or modified from time
to time;
"Approved List" means the approved list of sale and purchase brokers
attached hereto as Schedule 3;
"Approved Manager" means IMI or any other company which the Agent
may, in its reasonable discretion, approve from time to time as the
manager of the Vessels or any other Equipment;
"Approved Management Agreement" means the agreement between EGF V and
the Approved Manager providing for the complete maintenance,
operation, repair, certification and upkeep of the Vessels or any
other Equipment;
"Assignment of Limited Partnership Interests" means (i) the
assignments executed or to be executed in favor of the Security
Trustee by EGF V for the limited partnership interests in ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇, respectively, and (ii) such other assignment of limited
partnership interests executed in favor of the Security Trustee as
security for the obligations of the Companies under this Agreement,
the Notes and the Security Documents, each in form and substance
satisfactory to the Agent, as the same may be amended, supplemented
or modified from time to time;
"Beneficial Interest Security Agreement" means the security agreement
executed or to be executed by the Security Trustee, the Owner Trustee
and EGF V in respect of its beneficial interest in the Aircraft
pursuant to the Trust Agreement, in form and substance satisfactory
to the Agent, as the same may be amended, supplemented or modified
from time to time;
"Business Day" means a day on which banks are open for the
transaction of business of the nature required by this Agreement in
the place or places from time to time specified;
"California" means California Vessel Limited Partnership, a
California limited partnership having its principal offices at ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Cash Collateral Account" means the cash collateral account no.
▇▇▇-▇▇▇-▇▇▇▇ in the name of the Companies maintained by the Security
Trustee and under the dominion and control of the Security Trustee,
as further described in Clause 7.04;
"Cash Equivalents" means any of the following, to the extent owned by
the Companies free and clear of all Security Interests and having a
maturity not greater than 360 days (or such other period as is
specified) from the date of issuance thereof: (a) direct obligations
of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States; (b)
certificates of deposit or time deposits with (i) Christiania Bank og
Kreditkasse or (ii) any commercial bank that (x) is organized under
the laws of the United States or any State thereof or any member
country of the Organization for Economic Cooperation and Development
and (y) has combined capital and surplus of at least $300,000,000 and
whose debt is rated A by Standard and Poors, provided such
certificates of deposit or time deposits described in this clause (b)
will not in the aggregate exceed $20,000,000 and do not in any
individual case have a maturity in excess of 180 days, (c) commercial
paper having a maturity not to exceed 180 days in an aggregate amount
of not more than $20,000,000 per issuer outstanding at any time,
issued by Christiania Bank og Kreditkasse or any corporation
organized under the laws of any State of the United States and rated
at least " Prime-1 " (or the then equivalent grade) by ▇▇▇▇▇'▇
Investors Services, Inc. or " A- I " (or the then equivalent grade)
by Standard & Poor's Ratings Group or an equivalent rating or higher
from at least one nationally recognized rating agency; (d) repurchase
obligations with a term of not more than 30 days for securities of
the types listed in clause (a) with a bank meeting the qualification
described in clause (b); or (e) shares of money market mutual or
similar funds having assets in excess of $100,000,000 and which
invest exclusively in assets satisfying the requirements of clauses
(a) through (d) of this definition;
"CBK" means Christiania Bank og Kreditkasse, New York Branch;
"Classification Society" shall mean Det norske Veritas with respect
to M/T ▇▇▇▇▇ TRADER, American Bureau of Shipping with respect to M/V
CALIFORNIA, and Lloyd's Register of Shipping with respect to M/T
COLUMBUS or such other classification society as is selected by the
Companies with the consent of the Agent;
"CLVI" means ▇▇▇▇▇▇▇ Vessel, Inc., a Wyoming corporation having its
principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ Vessel Limited Partnership, a California
limited partnership having its principal offices at ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Columbus" means Columbus Vessel Limited Partnership, a California
limited partnership having its principal offices at ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Companies" means each of EGF V, Trader, TVI, California, CVI,
Columbus, COVI and Redcar, as such list may be from time to time
amended;
"Containers" means those refrigerated and dry marine containers
listed in Schedule 1 to Appendix E;
"COVI" means Columbus Vessel Inc., a Wyoming corporation having its
principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"CVI" means California Vessel Inc., a Wyoming corporation having its
principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Deeds of Covenants" means the Deeds of Covenants supplemental to the
Mortgages executed in favor of the Security Trustee by (i) Redcar on
M/V CALIFORNIA and (ii) Columbus on M/T COLUMBUS, and such other
deeds of covenants supplemental to a Mortgage executed in favor of
the Security Trustee by the mortgagor in respect of such Mortgage,
each in form and substance satisfactory to the Agent, as the same may
be amended, supplemented or modified from time to time;
"Default" means an event or occurrence that with the giving of notice
or lapse of time or both would constitute an Event of Default;
"Dollars" and "$" means the lawful currency for the time being of the
United States of America;
"Drawdown Date" means the date upon which the Companies requested the
drawdown of the Loan pursuant to Clause 2 of the Original Loan
Agreement, or (as the context requires) the date on which the Loan
was actually drawn down thereunder;
"EGF V" means PLM Equipment Growth Fund V, a California limited
partnership having its principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇;
"Equipment" means all aircraft, aircraft engines, drilling rigs,
vessels, railcars, truck trailers, truck tractors, chassis and
containers owned directly or beneficially by EGF V or a subsidiary or
affiliate of EGF V, including any Company other than EGF V;
"Estate" has the meaning specified in Clause 8.02 hereof;
"Event of Default" means any one of the events listed in Clause 9.01;
"FSI" means PLM Financial Services, Inc., a Delaware corporation
having its principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"IMI" means PLM Investment Management, Inc., a California corporation
with its principal place of business at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Indebtedness" has the meaning specified in Clause 8.02, together
with such other amounts as may be owing to the Security Trustee by
any of the Companies under the Security Documents;
"Indenture" means the trust indenture created by Clause 8 of this
Agreement and the Security Documents;
"Insurance Assignments" means the assignments executed or to be
executed in favor of the Security Trustee by (i) Trader for the
insurances of M/T TRADER; (ii) Redcar for the insurances of M/V
CALIFORNIA, (iii) Columbus for the insurances of M/T COLUMBUS and
(iv) EGF V for the insurances on the Containers, and such other
assignment of insurances in respect of any other Vessel, Aircraft or
other Equipment executed in favor of the Security Trustee by the
owner of such Vessel or Aircraft, each in form and substance
satisfactory to the Agent, as the same may be amended, supplemented
or modified from time to time;
"Interest Period" means a period of either one (1), three (3) or six
(6) months as determined pursuant to Clause 3;
"Interest Rate Agreements" means any agreements entered into from
time to time between any Lender and the Companies or any of them
providing for the hedging of interest rate risks; provided, the
Companies shall first offer to the Agent the opportunity to provide
such hedging of interest rate risks;
"Lenders" mean the Lenders listed on Schedule 1 hereto, as the same
may be amended from time to time, and their successors and assigns;
"LIBOR" means (i) the rate per annum equal to the rate quoted by the
Agent as appearing on the Telerate Page 3750 at or about 11:00 A.M.
(London time) for the applicable Interest Period on the second
Business Day prior to the commencement of such Interest Period or
(ii) if such rate does not appear on the Telerate Page 3750, the rate
at which deposits in Dollars in an amount approximately equal to the
Loan (or any relevant part thereof) are offered to the Agent in the
London Interbank Dollar Market at or about 11:00 a.m. (London time)
for the applicable Interest Period on the second Business Day prior
to the commencement of such Interest Period for a period equal to
such Interest Period;
"Loan" means the aggregate principal amount of all borrowings by the
Companies under this Agreement or (as the context requires) the
aggregate principal amount thereof for the time being advanced and
outstanding under this Agreement;
"Majority Lenders" means the Lenders owning at least 51% of the
Indebtedness;
"Margin" means one and two-tenths percent (1.20%) per annum, plus any
applicable margin imposed on the Companies or the Lenders as a result
of the operation of Regulation D (Code of Federal Regulations, Title
12, Chapter II, Part 204) or any successor or replacement regulation
as in effect from time to time;
"▇▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇▇ Vessel Limited Partnership, a
California limited partnership having its principal offices at ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Mortgages" means (a) the First Preferred Liberian ship mortgages
executed in favor of the Security Trustee by Trader on M/T TRADER,
(b) the Statutory First Priority Bahamian mortgages executed in favor
of the Security Trustee by Columbus on M/T COLUMBUS, (c) the First
Priority Hong Kong Ship Mortgage executed in favor of the Security
Trustee by Redcar on M/V CALIFORNIA, (d) the Aircraft Mortgages, and
such other mortgage in respect of a Vessel or an Aircraft executed in
favor of the Security Trustee by the owner of such Vessel or
Aircraft, as the case may be, each in form and substance satisfactory
to the Agent, as the same may be amended, supplemented or modified
from time to time;
"M/T COLUMBUS" means the Bahamian flag product tanker named COLUMBUS,
as the same is further described in the relevant Mortgage;
"M/T TRADER" means the Liberian flag chemical tanker named TRADER
(formerly known as ▇▇▇▇▇ TRADER), as the same is further described in
the relevant Mortgage;
"M/V CALIFORNIA" means the Hong Kong flag bulk carrier named
CALIFORNIA, as the same is further described in the relevant
Mortgage;
"M/V ▇▇▇▇▇▇▇" means the Bahamian flag oil tanker named ▇▇▇▇▇▇▇, duly
documented under the laws and flag of the Bahamas, official number
713619;
"M/V PACIFIC SPLENDOR" means the Bahamian flag bulk carrier named
PACIFIC SPLENDOR, duly documented under the laws and flag of the
Bahamas, official number 706810;
"MVI" means ▇▇▇▇▇▇▇▇▇▇ Vessel, Inc., a Wyoming corporation having its
principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"New Security Documents" means (i) the Aircraft Mortgages, (ii) the
amendments to the Mortgage delivered or to be delivered pursuant to
Clause 5.01 (c), (iii) the Pledge Agreement, (iv) the Assignment of
Limited Partnership Interests, and (v) the Beneficial Interest
Security Agreements;
"Note" means the Secured Promissory Note evidencing the Loan, in
substantially the form of Appendix A and any amended and restated
Secured Promissory Note evidencing the Loan;
"Owner Trustee" means First Security Bank of Utah, National
Association, as owner trustee pursuant to the Trust Agreement (or any
successor owner trustee);
"Permitted Liens" means (i) liens in favor of the Lenders, the Agent
or the Security Trustee, (ii) with respect to the Vessels and the
Aircraft, the meaning for such term set forth in the respective
Mortgages and (iii) with respect to all other Equipment (a) liens
incident to expenses of current operations incurred in the ordinary
course of business of EGF V; (b) liens set forth on Schedule 2
hereto, (c) purchase money liens in favor of the Warehousing Agent
securing amounts borrowed by EGF V and outstanding under the
Warehousing Agreement provided that such liens are released within
180 days of the day they were created, (d) liens imposed by any
governmental authority for taxes, assessments or charges not yet due
(after giving effect to any applicable grace period) or which are
being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of
the Companies in accordance with generally accepted accounting
principals, (e) liens securing claims which are completely covered by
insurance and the deductible applicable thereto, so long as there has
not been any action by the lienholder to enforce such lien and (f)
judgment or other similar liens provided that there shall be no
period of more than 20 consecutive days (or such longer appeal period
as may be provided by local court procedural rules) during which a
stay of enforcement of the related judgment shall not be in effect;
"Person" means any individual, corporation (including a business
trust), company, voluntary association, partnership, joint venture or
other entity, trust, incorporated organization or government (or any
agency, instrumentality or political subdivision thereof);
"Pledge Agreement" means the pledge agreements executed or to be
executed in favor of the Security Trustee by EGF V in respect of the
shares of each of the CLVI and MVI;
"Pledged Equipment" means Equipment that is subject to a first
priority lien in favor of the Security Trustee, the Agent or the
Lenders and which secures the obligations of the Companies under this
Agreement, the Note and the Security Documents;
"Pledged Shares" means the shares of CLVI and MVI, respectively,
pledged by EGF V to the Security Trustee for the benefit of the
Lenders pursuant to the Pledge Agreement;
"Qualified Assets" means the three (3) Boeing model 737-200 aircraft
msns. 21003, 21008 and 21009 and registration marks "PP-VMH",
"PP-VMM" and "PP-VMN", respectively;
"Redcar" means Redcar Investments Limited, a Hong Kong company having
its principal offices at 702 Tower One Admiralty Centre, ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇;
"Repayment Date" means each of the dates determined pursuant to
Clause 4.01;
"Repurchase Units" means each unit representing a limited partnership
interest in EGF V which has been repurchased by EGF V from the holder
thereof;
"Request" means a request set forth in a written instrument signed by
an officer or attorney-in-fact of EGF V on behalf of the Companies;
"Security Agreement" means the security agreement executed in favor
of the Security Trustee by EGF V with respect to the Containers and
related collateral, in form and substance satisfactory to the Agent,
as the same may be amended, supplemented or modified from time to
time;
"Security Documents" means (a) the Mortgages, the Deed of Covenants,
the Insurance Assignments, the Security Agreement, the Pledge
Agreement, the Assignment of Limited Partnership Interests, the
Beneficial Interest Security Agreements, any Interest Rate
Agreements, any assignments of charters, leases or accounts entered
into pursuant hereto and (where the context so permits) this
Agreement and (b) any other agreement or document that may be
executed at any time by the Companies or any other person as security
for all or any part of the Loan, interest thereon or any other moneys
payable to the Lenders under or in connection with this Agreement,
the Note and/or any of the documents to which these definitions
refer;
"Security Interest" means a mortgage, pledge, lien, hypothecation,
encumbrance, assignment, trust arrangement, title retention or other
security interest or other arrangement of any kind having the effect
of conferring security;
"Security Period" means the period commencing on the Drawdown Date
and terminating on the date upon which all moneys payable or to
become payable at any time and from time to time pursuant to the
terms of this Agreement, the Note and/or any of the Security
Documents shall have been paid and discharged in full;
"Security Trustee" means CBK in its capacity as trustee hereunder
until a successor Security Trustee shall have become such under the
applicable provisions of Clause 8 hereof, and thereafter such
successor Security Trustee;
"Taxes" includes all present and future income, corporation or
value-added taxes and all stamp and other taxes and levies, imposts,
deductions, duties, charges and withholdings whatsoever together with
interest thereon and penalties with respect thereto, if any, and
charges, fees or other amounts made on or in respect thereof other
than (and references to "Taxation" shall be construed accordingly);
(i) taxes on, based on or measured by the net income of the
Lenders imposed by the United States of America or the
State of New York or any political subdivision of either
thereof;
(ii) any withholding of United States federal income tax which
would not have been imposed had the payee been entitled to
provide and had it timely provided to the Companies a duly
completed and signed Form 4224 of the United States
Internal Revenue Service (the "IRS") --- entitling the
payee to a complete exemption from such withholding or a
certification that the payee is a corporation or
partnership established under the laws of the United States
or a State thereof and having its principal office located
in the United States (or such successor form(s) as shall be
adopted from time to time by the relevant United States
taxing authorities);
(iii) any withholding of any tax to the extent such withholding
would not have been imposed had the payee been entitled to
provide and had it timely provided to the Companies a duly
completed and signed Form 1001 of the IRS (or such
successor form(s) as shall be adopted from time to time by
the relevant United States taxing authorities) entitling
the payee to an exemption from or reduction of the rate of
such withholding; and
(iv) any tax which would not have been so imposed but for the
failure of the Agent or any Lender, as applicable, to
comply with any certification, identification or other
similar requirement under United States income tax laws or
regulations (including backup withholding) to establish
entitlement to exemption from such tax;
"Trader" means Trader Vessel Limited Partnership, a California
limited partnership having its principal offices at ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Trust Agreement" means the Trust Agreement dated as of October 16,
1989, as amended by a First Amendment to Trust Agreement dated as of
May 11, 1990, a Trust Agreement Amendment dated as of May 8, 1995,
and a Trust Agreement Amendment dated as of September 26, 1996,
between the Owner Trustee and EGF V, as the same may be amended,
supplemented or modified from time to time);
"TVI" means Trader Vessel Inc., a California corporation having its
principal offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
"Total Loss", in relation to any of the Vessels or any of the
Aircraft, shall have the meaning ascribed to such term in the
respective Mortgages;
"Valuation" means the market value of each of the Vessels, the
Aircraft and Containers determined at the relevant time by means of a
valuation made pursuant to Clause 7.03. Valuation shall be made with
or without physical inspection of the Vessels, the Aircraft and
Containers (as the Agent may require), on the basis of a sale for
prompt delivery for cash at arm's length on normal commercial terms
as between a willing seller and a willing buyer, and shall be with
charter lease or existing contract of employment for Vessels or
Aircraft, as the case may be, as to which sale is subject to a
charter or lease, otherwise free of any existing charter, lease or
other contract of employment. The Companies agree to supply to the
Agent, and to any such brokers, such information concerning the
Vessels, the Aircraft or the Containers, as the case may be, and
their condition as such brokers may require for the purpose of making
such valuation;
"Vessels" means (a)(i) the Liberian flag chemical tanker M/T TRADER,
(ii) the Hong Kong flag bulk carrier M/V CALIFORNIA and (iii) the
Bahamian flag product tanker M/T COLUMBUS and (b) such other vessels
as the Companies may hereafter mortgage as security for the
obligations of the Companies under this Agreement, the Note and the
Security Documents, or any of them as the context requires, as the
same are further described in the Mortgages;
"Warehousing Agent" means First Union National Bank of North
Carolina, as agent under the Warehousing Agreement (or any successor
agent);
"Warehousing Agreement" means the Second Amended and Restated
Warehousing Credit Agreement dated May 31, 1996 among PLM Equipment
Growth Fund III, PLM Equipment Growth Fund IV, EGF V, PLM Equipment
Growth Fund VI, PLM Equipment Growth & Income Fund VII, Professional
Lease Management Income Fund I, L.L.C., FSI, First Union National
Bank of North Carolina and the other lenders party thereto and the
Warehousing Agent (as the same may be amended, supplemented or
modified from time to time).
Words importing the singular number only shall include the plural and
vice versa. Words importing persons shall include companies, firms,
corporations and their respective successors and assigns.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted U.S. accounting
principles consistently applied and all financial data submitted
pursuant to this Agreement shall be prepared in accordance with such
principles.
3. INTEREST AND INTEREST PERIODS
3.01 Subject to the terms of this Agreement, the Companies shall specify
which Interest Period they choose to apply to the Loan.
3.02 The Companies shall jointly and severally pay accrued interest on the
outstanding amount of the Loan at a rate per annum equal to LIBOR
plus the Margin in arrears on the last day of such Interest Period,
provided that in the case of Interest Periods of six (6) months,
accrued interest shall be paid at the end of three (3) months and at
the last day of such Interest Period.
3.03 The duration of each Interest Period shall be one (1) month, three
(3) months or six (6) months as notified by the Companies to the
Agent in writing by 11:00 A.M. New York time at least three (3)
Business Days prior to the commencement of such Interest Period,
provided that:
(a) if the Companies fail to select an Interest Period as
provided in this Clause 3.03, the Borrowers shall be deemed
to have selected an Interest Period of three months;
(b) the selection of Interest Periods under this Clause 3.03
shall be made in such manner as to ensure that an Interest
Period expires on each Repayment Date in respect of an
amount of the Loan at least equal to the repayment
installment which is then due to be repaid under Clauses
4.01 or 4.02 on such Repayment Date; and
(c) the Agent, in its sole and absolute discretion, is
satisfied that deposits in Dollars for a period equal to
such Interest Period will be available to the Agent in the
London Interbank Dollar Market at the commencement of such
Interest Period and, if the Agent is not so satisfied, such
Interest Period shall be of such duration as the Agent and
the Companies shall agree (or, in the absence of such
agreement, as the Agent shall specify).
3.04 In the event that the Agent does not receive on the due date any sum
due under this Agreement, the Note or any of the Security Documents
to which any of the Companies is a party (or any agreement entered
into by the Companies in connection herewith or therewith), the
Companies shall jointly and severally pay to the Agent on demand
interest on such sum from and including the due date therefor to the
date of actual payment (as well after as before judgment) at the rate
per annum determined by the Agent to be: (a) if such sum is principal
of the Loan or interest thereon calculated on the basis of two
percent (2%) above the higher of the rates set out at (i) and (ii)
below and (b) if such sum is other than such principal, two percent
(2%) above the rate set out in (ii) below:
(i) the rate (inclusive of the Margin) applicable to such
overdue principal immediately prior to the due date (and in
any event only for the unexpired part of any Interest
Period relative to such overdue principal); and
(ii) the Margin plus the rate per annum at which deposits in
Dollars in an amount equal to such overdue amount are
offered to the Agent by leading banks in the London
Interbank Dollar Market on call or for successive periods
of any duration up to three months, as the Agent may
determine from time to time. Such interest rate shall be
determined on the commencement of each such period. If the
Agent determines that Dollar deposits are not being made
available to it by leading banks in the London Interbank
Dollar Market in the ordinary course of business, such
interest rate shall be determined by reference to the cost
of funds to the Agent from such other sources as the Agent
may from time to time determine.
Any such interest which is not paid when due shall be compounded at
the end of each such Interest Period or other period as the case may
be (both before and after any notice of demand by the Agent under
Clause 9.02).
4. REPAYMENT AND PREPAYMENT
4.01 The Companies shall jointly and severally repay the Loan in twenty
consecutive quarterly installments commencing on February 12, 1997
whereof the first four installments shall be in the amount of
$1,500,000 and the remaining sixteen installments shall be in the
amount of $2,000,000. In no event shall the Loan be repaid later than
December 12, 2001.
4.02 The Companies may prepay without penalty the whole or any part of the
Loan on the last day of any Interest Period relating thereto,
provided that:
(a) the Agent shall have received from the Companies not less
than five (5) days' prior irrevocable written notice of its
intention to make such prepayment which specifies the
amount and date on which such prepayment is to be made;
(b) the amount of any such partial prepayment shall be not less
than $1,000,000. Should the Companies wish to make a
prepayment in an amount in excess of $1,000,000, such
additional prepayment shall be made in increments of
$1,000,000;
(c) no amount prepaid under this Clause 4.02 may be reborrowed;
(d) each prepayment under this Clause 4.02 shall be made
together with accrued interest on the amount prepaid and
all other sums payable thereon under the terms of this
Agreement; and
(e) each partial prepayment of the Loan shall be applied pro
rata against the remaining installments of the Loan.
4.03 After December 31, 1997, the Companies shall prepay the Loan as
follows:
(a) In respect of each fiscal quarter of EGF V, the Companies
shall prepay the Loan in an amount equal to the sum of (i)
the excess of the aggregate cash balances of the Companies
(not including amounts on deposit in the Cash Collateral
Account) over $20,000,000 (as measured at the end of each
such fiscal quarter and disclosed on the reports delivered
to the Agent pursuant to Clause 7.01(a)(ii) of this
Agreement) plus (ii) an amount equal to 60% of the
aggregate proceeds from the sale of any Equipment during
such fiscal quarter;
(b) After December 31, 1997, any and all amounts on deposit in
the Cash Collateral Account shall be applied on the next
succeeding Repayment Date as a prepayment of the Loan;
(c) no amount prepaid under this Clause 4.03 may be reborrowed;
(d) each prepayment under this Clause 4.03 shall be made on the
Repayment Date next succeeding the end of the fiscal
quarter for which the prepayment was calculated together
with accrued interest on the amount prepaid and all other
sums payable thereon under the terms of this Agreement;
(e) each partial prepayment of the Loan shall be applied pro
rata against the remaining installments of the Loan.
5. CONDITIONS
5.01 Conditions Precedent. The effectiveness of this Agreement is
expressly conditioned upon receipt by the Agent of the following
documents and evidence, in all respects in form and substance
satisfactory to the Agent and its legal advisers:
(a) the Notes, substantially in the form of Appendix A;
(b) the first priority Aircraft Mortgages on each of the
Aircraft, in form and substance satisfactory to the Agent
(and notice in the form of APPENDIX L shall have been given
to each of the lessees thereunder);
(c) an amendment to the First Preferred Liberian Mortgage on
M/T TRADER, in form and substance satisfactory to the
Agent;
(d) an Assignment of Charter relating to the Time Charter Party
between Trader and Chembulk Trading Inc. in respect of M/T
TRADER, with notice to Chembulk Trading Inc., in form and
substance satisfactory to the Agent;
(e) [Intentionally omitted];
(f) [Intentionally omitted];
(g) Letter from relevant Companies reaffirming the first
priority Insurance Assignment for the insurances on each of
the Vessels and on the Containers, in form and substance
satisfactory to the Agent;
(h) the Pledge Agreement in respect of (i) the shares of CLVI
and MVI, respectively, together with certificates
representing the Pledged Shares referred to therein
accompanied by undated stock powers executed in blank and
an irrevocable proxy to vote the Pledged Shares, in form
and substance satisfactory to the Agent;
(i) the Assignment of Limited Partnership Interests in respect
of EGF V's limited partnership interest in ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇, respectively, in form and substance
satisfactory to the Agent;
(j) copies of the Agreement and Articles of Limited
Partnership, as amended, and forms LP-1 and as applicable,
LP-2 issued by the appropriate authority of the State of
California, for each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇;
(k) certificates of each of FSI, TVI, CVI, COVI, each in its
capacity as general partner of EGF V, Trader, California
and Columbus, respectively, certifying that there have been
no amendments or modifications to the Agreement and
Articles of Limited Partnership, Form LP-1 or Form LP-2, as
applicable, of each such limited partnership since the last
date that certified copies of such documents were delivered
to the Agent;
(l) copies of the Certificates of Status issued by the
appropriate authority of the State of California for each
of EGF V, Trader, California, Columbus, Clement and
▇▇▇▇▇▇▇▇▇▇;
(m) Certificate of the Secretary or Assistant Secretary of CLVI
and MVI as to (i) Articles of Incorporation and By-Laws
(and all amendments thereto) and (ii) authorized and issued
share capital;
(n) certificates of the Secretary or Assistant Secretary of
each of FSI, TVI, CVI, COVI and Redcar certifying that
there have been no amendments or modifications to the
Articles of Incorporation and By-Laws of each such
corporation since the last date that certified copies of
such documents were delivered to the Agent;
(o) certificates of good standing issued by the appropriate
authority of the jurisdiction of incorporation of each of
FSI, TVI, CVI, COVI, Redcar, CLVI and MVI;
(p) copies of resolutions duly adopted by the board of
directors and shareholders of each of TVI, CVI, COVI and
Redcar evidencing approval of the making and performance of
this Agreement and the New Security Documents to which each
is a party and authorizing appropriate officers or
attorneys to execute the same and to sign all notices
required to be given hereunder or thereunder on their
behalf, or other evidence of such approvals and
authorizations as shall be acceptable to the Agent;
(q) copies of resolutions duly adopted by the board of
directors of each of FSI, TVI, CVI and COVI, each in its
capacity as general partner of EGF V, Trader, California
and Columbus, respectively, evidencing approval of the
making and performance of this Agreement and the New
Security Documents to which each such limited partnership
is a party and authorizing appropriate officers or
attorneys to execute the same and to sign all notices
required to be given hereunder or thereunder on its behalf,
or other evidence of such approvals and authorizations as
shall be acceptable to the Agent;
(r) the original of any power of attorney issued in favor of
any person executing this Agreement, the Notes or any of
the New Security Documents on behalf of the Companies;
(s) a list specifying the directors and officers of each of the
Companies (together with their specimen signatures) and
specifying the authorized and issued share capital of each
of FSI, TVI, CVI, COVI, Redcar, CLVI and MVI;
(t) copies of all governmental and other consents, licenses,
approvals and authorizations as may be necessary to
authorize the performance by the Companies of their
respective obligations under the terms of this Agreement,
the Notes and the New Security Documents to which each is a
party;
(u) the Beneficial Interest Security Agreement, in form and
substance satisfactory to the Agent;
(v) a favorable opinion from an independent insurance
consultant acceptable to the Lenders as to compliance of
insurances with the terms of the Aircraft Mortgages on each
of the Aircraft;
(w) such further evidence as the Agent may require as to
placement of insurances on each of the Aircraft in
compliance with the terms of the Aircraft Mortgages on each
of the Aircraft and of this Agreement;
(x) all items and documents required to be delivered pursuant
to the New Security Documents, including (but without
limitation) all notices and acknowledgements pursuant to
the Insurance Assignments, and UCC financing statements;
(y) evidence satisfactory to the Agent that:
(i) each of the Aircraft is duly permanently
registered in the name of the Owner Trustee and
prior to the registration of the Aircraft
Mortgages is free and clear of recorded liens,
mortgages and charges;
(ii) each Aircraft has been issued a Certificate of
Airworthiness and a Certificate of Registration,
issued by the appropriate office of the U.S.
Federal Aviation Administration or the Canadian
Aviation Authority;
(iii) each of the Aircraft Mortgages has been duly
recorded against the respective Aircraft as a
valid first priority aircraft mortgage in
accordance with the laws of the United States and
Canada, as the case may be.
(z) evidence that CBK has received an amendment fee, as
separately agreed between the Companies and CBK;
(aa) appraisals of each of the Aircraft satisfactory to the
Agent;
(bb) a Certificate from an officer of each of the Companies
representing that no Default or Event of Default shall have
occurred and be continuing;
(cc) IRS Form 1001 or 4224, as appropriate, from each of the
Lenders;
(dd) the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, General Counsel to the
Companies in form and substance satisfactory to the Agent;
(ee) the opinion of Messrs. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., Bahamian
Counsel to the Lenders, in form and substance satisfactory
to the Agent;
(ff) the opinion of MacCleod, Dicksen, special Canadian counsel
to the Lenders on matters of Canadian law regarding the
Aircraft Mortgages in form and substance satisfactory to
the Agent;
(gg) the opinion of (i) Messrs. ▇▇▇ ▇▇▇▇▇▇▇, counsel to the
Owner Trustee and (ii) Messrs. Deacons ▇▇▇▇▇▇ & ▇▇▇▇▇,
special Hong Kong counsel to the Lenders, in each case in
form and substance satisfactory to the Agent;
(hh) the opinion of Messrs. ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, in such
form as the Agent shall specify;
(ii) a certificate by an officer acting on behalf of the Owner
Trustee respecting any amounts due and owing under each
current lease with respect to each respective Aircraft,
together with a copy of each such lease and any guarantees
for performance thereof, in a form satisfactory to the
Agent;
(jj) a consent of the charterer in respect of the M/T TRADER to
the amendment of the Mortgage covering such Vessel, in a
form satisfactory to the Agent;
(kk) a copy of (i) the Trust Agreement (with all amendments
thereto) and (ii) the Warehousing Agreement;
(ll) a Certificate of an officer of FSI as general partner of
EGF V certifying that (i) the equity of EGF V consists of
9,169,019 units as of September 15, 1996 and (ii) EGF V is
the legal and beneficial owner of (A) the sole limited
partnership interest in each of Trader, California and
Columbus and (B) 50% of the limited partnership interest in
each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇;
(mm) a Certificate of the Owner Trustee with respect to (i)
execution of the Aircraft Mortgages, the Beneficial
Interest Security Agreement and the Trust Agreement and
(ii) incumbency and specimen signatures of appropriate
officers, in form and substance satisfactory to the Agent;
Each of the documents specified in sub-clauses (j), (l), (m), (p),
(q), (r), (s) with respect to the leases (ii) above, and (kk) shall
be certified as a true and up-to-date copy by an officer of the
relevant Company or Companies, as the case may be.
5.02 Conditions Subsequent. The effectiveness of this Agreement is
expressly subject to the condition subsequent that the Agent shall
have received within 30 days of the date of this Agreement a Notice
and Acknowledgment of Mortgage (substantially in the form of Appendix
L) duly acknowledged by each lessee of an Aircraft with respect to
the respective Aircraft Mortgages, in all respects in form and
substance satisfactory to the Agent and its legal advisers.
6. REPRESENTATIONS AND WARRANTIES
6.01 The Companies hereby represent and warrant to the Lenders and to each
of them severally that:
(a) each of FSI, TVI, CVI, COVI, Redcar, CLVI and MVI is a
company duly organized and validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation and is qualified to do business in all
jurisdictions where the conduct of its business so
necessitates;
(b) each of EGF V, Trader, California, Columbus, Clement and
▇▇▇▇▇▇▇▇▇▇ is a limited partnership duly organized and
existing and in good standing under the laws of California
and is qualified to do business in all jurisdictions where
the conduct of its business so necessitates;
(c) each of the Companies has full power and authority to (i)
own and operate its Equipment and to carry on its business
as presently conducted or proposed to be conducted, (ii)
execute, deliver and perform under this Agreement, the Note
and the Security Documents to which it is a party, (iii)
borrow under this Agreement, (iv) execute and perform under
any Approved Management Agreement to which it is a party
and (v) comply with the provisions of, and perform all its
obligations under, this Agreement, the Note and the
Security Documents to which it is a party;
(d) each of the Companies has complied with all statutory,
regulatory and other requirements relative to the ownership
and (in all material respects) the operation of each of the
Vessels, Containers, the Aircraft and other Equipment and
the making and performance of this Agreement;
(e) (i) the Companies have taken all necessary actions to
authorize the execution, delivery and performance of this
Agreement and the Security Documents to which each such
Company is a party and the borrowing and giving of security
contemplated hereby, and (ii) this Agreement, the Note and
the Security Documents to which each such Company is a
party, constitute or, as the case may be, will, upon
execution and delivery thereof (and, where applicable,
registration thereof as provided for in this Agreement and
the Security Documents), constitute legal, valid and
binding obligations of such Companies enforceable against
such Companies in accordance with their respective terms
except to the extent limited by applicable bankruptcy,
insolvency and reorganization laws and other similar laws
affecting the rights of creditors generally; and to the
extent that enforcement is subject to general principles of
equity (including but not limited to all matters of public
policy) regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(f) the making and performance by each of the Companies of this
Agreement, the Note and the Security Documents to which the
Companies are a party, do not, and will not during the
Security Period, violate in any respect (i) the
constitutional documents of such Companies, or in any
material respect (ii) any law or regulation of any
governmental or official authority or body, or (iii) any
agreement, contract or other undertaking to which any of
such Companies is a party or which is binding on any of
such Companies or any of its assets;
(g) all consents, licenses, approvals and authorizations
(including, without limitation, any approvals of the
Bahamian, Liberian and Canadian governmental authorities)
required in connection with the entry into, performance,
validity and enforceability of this Agreement and the
Security Documents have been obtained and are in full force
and effect;
(h) save for such registrations and filings contemplated by
this Agreement and the Security Documents and the filing of
required extensions under the Uniform Commercial Code, it
is not necessary for the legality, validity, enforceability
or admissibility in evidence of this Agreement, the Note or
the Security Documents that any of them or any document
relating thereto be registered, filed, recorded or enrolled
with any court or authority in any relevant jurisdiction or
that any stamp, registration or similar Taxes be paid on or
in relation to this Agreement or any of the Security
Documents;
(i) except as set forth in the most recent Form 10-K and Form
10-Q reports referred to in Clause 6.01(k), no action,
suit, proceeding, litigation or dispute against any of the
Companies is currently pending or, to the knowledge of the
Companies, threatened, nor is there outstanding any
judgment or award given or basis for any judgment or award
against any of the Companies before any court, tribunal,
board of arbitration or other body which, in either case,
could or might result in any material adverse change in the
business or condition (financial or otherwise) of such
Companies;
(j) none of the Companies or FSI is in default in the
performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any
agreement to which it is a party, which default might have
a material adverse effect on the business, properties,
assets, operations or condition (financial or otherwise) of
EGF V and the Companies taken as a whole or (ii) any
agreement or instrument evidencing or governing
indebtedness for borrowed money, and no Event of Default
(or event which, with the giving of notice and/or lapse of
time or other applicable condition might constitute an
Event of Default) has occurred and is continuing and no
such Event of Default (or such event) will result from the
making and performance by the Companies of this Agreement,
the Note and the Security Documents to which any of the
Companies is or will be a party;
(k) the Companies have made available to the Agent copies of
the EGF V consolidated annual report on Form 10-K for the
fiscal year ended December 31, 1995 and quarterly reports
on Form 10-Q for the first and second quarters of 1996. The
financial statements contained in the annual report on Form
10-K, including the schedules and notes thereto, and the
condensed financial statements contained in the quarterly
reports, fairly present (in the case of quarterly reports
on an unaudited basis), in accordance with generally
accepted accounting principles (in the case of quarterly
reports, to the extent such principles have been
established with respect to quarterly reporting), the
financial condition and results of operations of EGF V and
its consolidated subsidiaries as of the respective dates
thereof and for the periods covered by such financial
statements. All such financial statements have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved, except as otherwise stated in the preceding
sentence or in the notes thereto. Since June 30, 1996 there
has been no material adverse change in the financial
condition of EGF V and its consolidated subsidiaries and,
except as otherwise disclosed to the Agent in writing,
neither EGF V nor any of its consolidated subsidiaries has
incurred any liabilities which are material to EGF V and
its consolidated subsidiaries as a whole otherwise than in
the ordinary course of business.
(l) all financial and other information furnished by or on
behalf of each of the Companies in connection with the
negotiation of this Agreement, or in the most recent Form
10K and Form 10-Q reports filed with the Securities and
Exchange Commission and referred to in Clause 6.01(k) is
true and accurate in all material respects and there are no
other material facts or matters the omission of which would
have made any statement or information contained therein
misleading;
(m) all payments made or to be made by the Companies under or
pursuant to this Agreement and the Security Documents to
which any of the Companies is a party may be made free and
clear of, and without deduction or withholding for or in
account of, any Taxes;
(n) the chief place of business of the Companies is located at
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇
and the corporate documents and records concerning the
transactions contemplated hereby, are kept only at such
offices;
(o) the provisions of the Employee Retirement Income Security
Act of 1974, as amended, are not applicable to any of the
Companies;
(p) none of the proceeds of the Loan will be used to purchase
or carry margin stock within the meanings of Regulations G,
T, U and X of the Board of Governors of the Federal Reserve
System. None of the Companies is engaged in the business of
extending credit for the purpose of purchasing or carrying
margin stock within the meaning of Regulations G, T, U or X
of the Board of Governors of the Federal Reserve System;
(q) none of the Companies is an "investment company" or a
company "controlled" by an "investment company" (as each of
such terms is defined or used in the Investment Company Act
of 1940, as amended); and
(r) prior to the date hereof, none of the Companies has
incurred any material indebtedness except as explicitly set
forth in the most recent Form 10-K and Form 10-Q reports
referred to in clause 6.01(k) or as disclosed in writing to
the Agent.
(s) The authorized capital stock of CLVI consists of 1000
shares of common stock, no par value, and of MVI consists
of 1000 shares of common stock, no par value. All of the
capital stock of each of CLVI and MVI is outstanding, has
been validly issued, is fully paid and non-assessable and
fifty percent (50%) of the capital stock of each such
company is owned beneficially and of record by EGF V free
and clear of all Liens.
(t) EGF V owns, directly or indirectly, 50% of the limited
partnership interests in each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇.
(u) The M/V ▇▇▇▇▇▇▇ is duly documented in the absolute and
unencumbered ownership of ▇▇▇▇▇▇▇ under the laws and flag
of the Bahamas. The M/V PACIFIC SPLENDOR is duly documented
in the absolute and unencumbered ownership of ▇▇▇▇▇▇▇▇▇▇
under the laws and flag of the Bahamas.
6.02 The Companies hereby further represent and warrant to the Lenders and
to each of them severally that:
(a) The Aircraft are duly documented in the absolute and
unencumbered ownership of the Owner Trustee under the laws
and flag of the United States and Canada, as the case may
be, free and clear of all Security Interests other than
Permitted Liens;
(b) The Aircraft are operationally airworthy and have been
issued Certificates of Airworthiness by the jurisdiction in
which the Aircraft are respectively registered;
(c) The Aircraft comply with all relevant laws, regulations and
requirements (including environmental laws, statutory or
otherwise) as are applicable to (i) aircraft documented
under the laws of such flag, as applicable, and (ii)
aircraft engaged in a trade similar to that performed by
the Aircraft, respectively;
(d) The Aircraft are insured in accordance with the provisions
of this Agreement and the respective Aircraft Mortgages and
the requirements herein and therein for insurances have
been complied with.
7. COVENANTS
7.01 The Companies hereby covenant and agree that, as and from the date of
this Agreement and throughout the Security Period, they will comply
in full with the following covenants and undertakings:
(a) each of the Companies will send (or procure that there is
sent) to the Agent:
(i) as soon as possible, but in no event later than
one hundred twenty (120) days after the end of
each fiscal year of EGF V, the EGF V consolidated
audited annual or other published accounts of all
financial statements as required by law, such
financial statements to be prepared in accordance
with generally accepted accounting principles
consistently applied and certified as to their
correctness by KPMG Peat Marwick or other
independent accounting firm of national
reputation;
(ii) as soon as possible, but in no event later than
sixty (60) days after the end of each fiscal
quarter of each financial year of EGF V, the EGF
V quarterly consolidated financial statements as
at the end of such period and for the period then
ending, such statements to be prepared in
accordance with generally accepted accounting
principles consistently applied and certified as
to their correctness by the chief financial
officer or controller of FSI, together with a
certificate by an officer of each of the
Companies (substantially in the form of Appendix
J hereto) confirming (i) that the representations
and warranties stated in Clause 6.01 and 6.02 are
true and correct on and as of the date of such
certificate as if made on such date, (ii) that no
Default or Event of Default has occurred and is
continuing and (iii) that EGF V and the other
Companies have complied with all of the covenants
contained in Clause 7 (setting forth in
reasonable detail the calculations required to
establish that such covenants were complied with
on the date of such financial statements) and
furnished to the Agent copies of any new charters
and/or leases entered into with respect of any of
the Vessels or the Aircraft, respectively with an
indicated duration in excess of six months;
(iii) as soon as possible but in no event later than
sixty (60) days after the end of each fiscal
quarter in each fiscal year of EGF V, EGF V's
valuation (as set forth in the certificate
referred to in sub-clause (ii) of this Clause
7.01) of the fair market value of the Vessels,
Containers, Aircraft and other Equipment,
together with a list of the Equipment indicating
all sales of Equipment, the purchase of
additional Equipment and any Equipment that has
become a Total Loss and identifying each charter
or lease in effect with respect to each Vessel
and Aircraft, respectively;
(iv) copies of all reports filed with the Securities
and Exchange Commission and all other public
reports furnished to the limited partners of EGF
V or any of its subsidiaries;
(v) promptly after the same is instituted (or, to the
knowledge of the Companies, threatened), details
of any litigation, arbitration or administrative
proceedings against or involving any of the
Companies, the Approved Manager, or any of the
Vessels, Aircraft or Containers or Equipment
which is likely to have a material adverse effect
on the financial condition of the Companies taken
as a whole, the operation of any Vessel, the
operation of any Aircraft or the operation of the
Equipment taken as a whole;
(vi) copies of all reports relating to the Aircraft
that are required to be filed by any governmental
agency of the jurisdiction in which each such
Aircraft is registered and/or operated.
(vii) from time to time, and promptly upon demand, such
additional financial or other information
relating to the Companies, the Equipment and/or
any relevant subsidiary or affiliate of the
Companies as may be reasonably requested by the
Agent.
(b) each of the Companies will notify the Agent of any Event of
Default (or event which, with the giving of notice and/or
lapse of time or other applicable condition, would
constitute an Event of Default) forthwith upon the
occurrence thereof;
(c) each of the Companies and FSI will maintain its corporate
existence or existence as a limited partnership, as the
case may be, and, in the case of Trader, its qualification
as a foreign maritime entity under Liberian law, and shall
remain duly organized and validly existing and in good
standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and will
obtain and promptly renew from time to time, and will
promptly furnish certified copies to the Agent of, all such
authorizations, approvals, consents and licenses as may be
required under any applicable law or regulation to enable
the Companies to perform their respective obligations under
this Agreement, the Note and the Security Documents to
which any such Company is a party or required for the
validity or enforceability of this Agreement, the Note and
the Security Documents or required to enable the relevant
Companies to continue to own and operate the respective
Vessels, Aircraft and Containers and the Companies shall
comply with the terms of the same;
(d) each of the Companies will promptly and in any event within
five days notify the Agent in writing of any change or
development which would materially adversely affect the
assets, properties, liabilities, business results or
operations or financial or other condition of the Companies
taken as a whole or threaten the validity, enforceability
or performance of this Agreement, the Note or the Security
Documents, and the Companies will permit the Agent or its
authorized representatives at reasonable times to inspect
and copy the books, records, accounts, logs and discuss
with the Companies their affairs, finances and business
plan;
(e) each of the Companies will comply in all material respects
with all applicable statutes, regulations and orders of and
applicable restrictions (including, without limitation, all
applicable environmental laws) of any governmental
authority of any jurisdiction applicable to the Companies;
(f) each of the Companies will obtain and promptly renew from
time to time, all authorizations, approvals, consents and
licenses required under any applicable law or licenses
required under any applicable law or regulation with
respect to this Agreement, the Note and the Security
Documents;
(g) the Companies will procure that EGF V and its consolidated
subsidiaries shall maintain the following financial ratios:
1. The ratio of net cash provided by operating
activities (defined as net income before
extraordinary items plus interest expense plus
depreciation and amortization plus cash from
unconsolidated special purpose entities plus loss
on sale of assets or minus gains on sale of
assets) to interest expenses shall at all times
be at least 3:1.
2. The ratio of total liabilities (minus the balance
in the Cash Collateral Account) to total
value-adjusted assets (defined as unrestricted
cash and Cash Equivalents plus the fair market
value of all Equipment) shall be no greater than
0.4:1.
3. The combined market value of the Pledged
Equipment (as determined pursuant to Clause
7.03(c)) shall at all times be equal to or
greater than 135% of the excess of (x) the
outstanding principal amount of the Loan over (y)
the aggregate amount of cash on deposit in the
Cash Collateral Account.
(h) each of the Companies shall insure or cause to be insured
and keep insured, with financially sound and reputable
insurers, so much of the properties of each such Company
and its subsidiaries in such amounts and against such risks
as are usually and customarily insured against by companies
in a similar business with respect to properties of a
similar character;
(i) each of the Companies will send (or procure that there is
sent) to the Agent a survey or drydock or inspection report
on each Vessel by the Approved Manager or its agent no less
often than once every 2 years;
(j) each of the Companies will send (or procure that there is
sent) to the Agent copies of all survey or inspection
reports delivered or required to be delivered pursuant to
the leases in respect of each Aircraft; provided, that if
any such lease does not require the periodic delivery of
reports relating to the use, operation and maintenance of
the Aircraft, then the Companies will send (or procure that
there is sent) to the Agent (no less often than once every
2 years commencing on the Closing Date) such information
relating to the use, operation and maintenance of the
Aircraft as the Agent may request;
(k) the Companies will procure that the sum of regular
dividends paid and other regular distributions of assets or
profits declared for a calendar year and payable to any
partner or shareholder of the Companies plus Repurchase
Units for each such calendar year shall not exceed the
lower of (x) $20,000,000 and (y) the net cash provided by
operating activities (defined as net income before
extraordinary items plus interest expense plus depreciation
and amortization plus cash from unconsolidated special
purpose entities plus loss on sale of assets or minus gains
on sale of assets) during such year; provided, that
notwithstanding the foregoing (and subject to Clauses 4.03
and 7.03), so long as (i) no Default shall have occurred
and be continuing and (ii) the Companies have made the
deposit required to be made into the Cash Collateral
Account pursuant to Clause 7.03(a)(iii)(A) and (B), after
December 31, 1997 the Companies may pay special dividends
and make other special distributions of assets or profits
so long as the sum of all such special distributions for
each calendar year does not exceed 40% of the aggregate
proceeds from the sale of any Equipment during such fiscal
year;
(l) for so long as any amount remains outstanding under this
Agreement, the Note or any of the Security Documents, EGF V
shall maintain a diversified portfolio of Equipment;
(m) EGF V shall at all times own, beneficially and of record,
at least (i) 50% of the issued and outstanding stock of
each of CLVI and MVI and (ii) 49.5% of the limited
partnership interests in each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇.
(n) If (i) any Company intends to acquire an asset for a
purchase price greater than $2,000,000 or (ii) any Company
intends to acquire an asset for a purchase price less than
$2,000,000 while a Default shall have occurred and be
continuing, the Companies shall give the Agent 5 Business
Days notice of such intended acquisition and upon the
request of the Agent (which request shall be made within 5
Business Days of the receipt of such notice), the Companies
shall procure that such acquiring Company deliver such
documents, certificates and instruments, and take all such
actions, as the Agent deems necessary so as to create a
fully perfected first priority lien in such acquired asset
in favor of the Security Trustee; provided that with
respect to the acquisition of any Qualified Assets (x) the
Companies shall not be required to notify the Agent of such
acquisition pursuant to sub-clause (i) hereof unless and
until an Event of Default shall have occurred and (y) the
Companies shall not be required to grant the Security
Trustee a first priority mortgage lien on any Qualified
Assets (but nothing herein shall be deemed to limit the
obligation of the Companies to grant the Security Trustee a
first priority lien in any other interest, beneficial or
otherwise, in the Qualified Assets or in the earnings or
insurances relating thereto);
(o) Upon the occurrence of a Default, the Companies shall
deliver all such documents, certificates and instruments,
and shall take all such actions, as the Agent may request
in order to create a fully perfected first priority lien in
favor of the Security Trustee in any assets of the
Companies that are at such time free and clear of all
Security Interests and that are not Pledged Equipment;
(p) The Aircraft shall not be used for any purpose or in any
manner not fully covered by the insurances relating
thereto, or outside any geographical limit imposed by such
insurances, or for any illegal purpose or in any illegal
manner.
(q) The Aircraft shall be maintained in the absolute and
unencumbered ownership of the Owner Trustee, free and clear
of all Security Interests other than Permitted Liens;
(r) Each of the Companies shall comply in all respects with all
applicable statues, regulations and orders of any
governmental authority of any jurisdiction applicable to
the Aircraft or the operation thereof and shall at all
times maintain in full force and effect all necessary
certificates, licenses, permits and authorizations required
for the use and operation of the Aircraft;
(s) The Aircraft shall be maintained in good and efficient
repair, condition and appearance consistent with first
class aircraft ownership and management practices and
operationally airworthy in all respects, ordinary wear and
tear excepted;
(t) The Companies shall cause the Warehousing Agreement to be
amended (no later than the Commitment Termination Date (as
defined in the Warehousing Agreement)) to reflect the
amendment and restatement of the Original Loan Agreement
pursuant to this Agreement and to reflect the granting of
Security Interests by the Companies in the Collateral
pursuant to the Security Documents.
7.02 Each of the Companies further undertakes that it will not, as and
from the date of this Agreement and throughout the Security Period,
without the prior written consent of the Agent:
(a) conduct any business or activity other than the ownership,
chartering, leasing and operation of the Equipment; or
(b) if an Event of Default shall have occurred and be
continuing, or if an Event of Default would occur as a
consequence of the declaration or payment of a dividend or
distribution, declare or pay any dividend or make any other
distribution of its assets or profits to any partner or
shareholder; or
(c) repay any loans (other than intercompany advances in the
ordinary course of business) made by any general partner or
limited partner to any limited partnership or any other
loans advanced to any Company by any person, or make any
loans or advances to any person, except that (i) each
Company may lend to and borrow from another Company,
provided that such loans shall be subordinated to the Loan
and any lending Company shall enter into a subordination
undertaking in form and substance satisfactory to the Agent
with respect to any such loan and (ii) EGF V may repay
amounts outstanding under the Warehousing Agreement; or
(d) except for indebtedness evidenced by this Agreement, the
Note and the Security Documents, and except for any other
indebtedness contemplated in this Agreement or any Security
Document, incur or agree to incur or issue any
indebtedness, extend any guarantees (other than for
performance by another Company as owner under any charter
of a Vessel or any lease of an Aircraft), or make any other
commitments with respect thereto; provided that EGF V may
borrow up to a maximum outstanding amount at any one time
of $10,000,000 under the Warehousing Agreement so long as
such borrowings are repaid within 180 days of the day such
borrowings are made; or
(e) create, assume or permit to exist any Security Interest or
encumbrance upon any of its properties or Equipment except
Permitted Liens; or
(f) consolidate or amalgamate with, or merge into, any other
entity other than EGF V or a subsidiary of EGF V; or
(g) employ a manager of any of the Vessels or the Aircraft
other than the Approved Manager; or
(h) except as contemplated by this Agreement or in accordance
with Clause 7.03, sell, convey, transfer, lease, or
otherwise dispose of (i) Pledged Equipment or (ii) all or a
substantial part of its assets (whether by one transaction
or a series of transactions and whether related or not); or
(i) change the location of its principal place of business on
less than thirty (30) days written notice to the Agent; or
(j) amend, supplement or modify, or permit the amendment,
supplementation or modification of, any of the Agreement
and Articles of Limited Partnership of EGF V, Trader,
California, Columbus, Clement or ▇▇▇▇▇▇▇▇▇▇;
(k) so long as the Pledge Agreement is in effect, amend,
supplement or modify, or permit the amendment,
supplementation or modification of, the Articles of
Incorporation and By-laws of CLVI and MVI;
(l) except under terms agreed to by the Agent, enter into any
charter, contract of affreightment, lease or similar
agreement with respect to any of the Vessels or Aircraft
which contains any prohibition on Vessel or Aircraft sale
without the prior consent of the charterer or lessee, as
the case may be, unless such sale provision is subject to
rights which the Security Trustee has in the event of
default under the relevant Mortgage; or
(m) enter into any charter, contract of affreightment, lease or
similar agreement with respect to any Vessel or Aircraft
which (i) has an indicated duration in excess of six (6)
months or (ii) at the time such contract is entered into
materially adversely affects the collateral value of any
Vessel or Aircraft or the legal position of the Lenders;
provided, that the Companies may enter into any such
charter, contract of affreightment, lease or similar
agreement which is on substantially the same terms
(including relevant assignments and consents), with rates
subject to market conditions, as those previously accepted
by the Agent.
7.03 (a) The Companies shall be entitled to dispose of any
portion of the Pledged Equipment provided that (i) prior to
such disposition no Default or Event of Default shall have
occurred and be then continuing, (ii) the disposition
occurs in an arm's-length transaction at fair market value
for cash consideration and (iii) with respect to the
disposition of:
(A) Pledged Equipment other than Containers, (I) the
Agent shall have received prior written notice of
the intention of the Companies to effect such
disposition and (II) after December 31, 1997, 60%
of the proceeds of such disposition (or 100% of
the proceeds in the event that a Default or an
Event of Default would occur as a consequence of
such disposition) are deposited into the Cash
Collateral Account within 5 days of such
disposition; and
(B) Containers, the Companies shall deliver to the
Agent within 45 days of the end of each fiscal
quarter of each financial year of EGF V a report
showing (x) the details of the disposition of any
Containers for such quarterly period and (y)
after December 31, 1997, confirmation of the
deposit into the Cash Collateral Account of 60%
of the proceeds (or 100% of the proceeds in the
event that a Default or Event of Default would
occur as a consequence of such disposition)
within 45 days of the end of such quarterly
period.
(b) Notwithstanding anything to the contrary in the Security
Documents, should the Companies be entitled to dispose of
any Pledged Equipment in accordance with Clause 7.03(a),
the Agent shall release the security interest in such
assets and shall release the corresponding Company from its
obligations under the relevant Security Documents.
(c) Each of the Companies jointly and severally agrees that if,
and so often as, the Companies are not in compliance with
Clause 7.01(g)(3), they will, within (x) sixty (60) days,
in the case of subclause (i) below, and (y) thirty (30)
days, in the case of subclause (ii) below, of being
notified by the Agent of such requirement (which
notification shall be conclusive and binding on the
Companies) or becoming aware of such non-compliance:
(i) provide the Lenders with, or procure the
provision to the Lenders of, such additional
Pledged Equipment as shall be acceptable to the
Lenders to bring the Companies into compliance
with Clause 7.01(g)(3), which additional Pledged
Equipment shall consist of such assets, and be
mortgaged to the Agent by such documentation and
be entered into between such parties as the Agent
may approve or require (and, if the Companies do
not make proposals satisfactory to the Agent in
relation to such additional Pledged Equipment
within ten (10) days of the date of the
notification by the Agent to the Companies as
aforesaid, shall be deemed to have elected to
prepay in accordance with (ii) below); or
(ii) prepay (in accordance with Clauses 4.02 except
that such prepayment shall be made on the next
succeeding Repayment Date) such part of the Loan
(together with accrued interest thereon) as will
ensure that the Companies comply with Clause
7.01(g)(3). If the prepayment shall not occur on
the last day of an Interest Period, the Companies
will pay to the Agent for the account of the
Lenders such amounts as the Agent may certify as
necessary to compensate the Lenders for any loss
or expense on account of funds borrowed,
contracted for or utilized in order to fund the
Loan.
(d) On or prior to December 31, 1997, the Companies may request
that amounts held on deposit in the Cash Collateral Account
be released to them to be applied towards the purchase of
additional Pledged Equipment provided that (x) such
additional Pledged Equipment takes such form, is
constituted by such documentation and is entered into
between such parties as the Agent may approve or require
and is otherwise satisfactory to the Agent and (y) after
the purchase of such additional Pledged Equipment, the
Companies are either in compliance with Clause 7.01(g)(3)
or they comply with Clause 7.03(c);
(e) For the purposes of Clause 7.01(g)(3) and 7.03(a), the
market value of the Vessels, Aircraft and Containers shall
be determined as follows: (1) EGF V shall provide to the
Agent its internal Valuations at the intervals provided
herein and at such additional times as the Agent may
reasonably request. (2) At any such time as the Agent may
reasonably request, the Companies shall furnish to the
Agent a Valuation made by the appraisers in respect of each
category of Equipment appointed by the Agent from the
Approved List (which Valuation shall be at the expense of
the Companies with respect to the first such Valuation and
thereafter shall be for the account of the party specified
in subclause (c)(4) below). The Agent and the Companies
agree to accept any Valuation made by such appraisers
appointed as aforesaid as conclusive evidence of the market
value of the Vessels, Aircraft or Containers, as the case
may be, at the date of such Valuation. (3) If an
independent Valuation is obtained as provided in subclause
(2) above, the cost of such Valuation shall be for the
account of the Agent if the Valuation provided by the
appraisers establishes that the Companies are in compliance
with Clause 7.01(g)(3). If, however, the appraisers'
Valuation establishes that the Companies are not in
compliance with Clause 7.01(g)(3), the cost of such
appraisers' Valuation shall be for the account of the
Companies.
(f) For the purpose of Clause 7.03 (c) and (d), the market
value of any additional security provided or to be provided
to the Lenders shall be reasonably determined by the Agent
through reference to well established and generally
accepted markets, indexes and exchanges for such additional
security.
(g) In connection with any additional security provided in
accordance with Clause 7.03 (c) or (d), the Lenders shall
be entitled to receive certified copies of such documents
of the kinds to which sub-clauses (a), (b), (c), (d), (e),
(f), (g), (h), (i), (j), (k), (l), (m), (n) and (u)
(inclusive) of Clause 5.01 refer which apply to the type of
security provided and such favorable legal opinions as the
Agent shall reasonably require.
7.04 The Companies shall at all times maintain at the offices of CBK the
Cash Collateral Account in the name of the Companies and under the
sole dominion and control of the Security Trustee, which account
shall be a special interest-bearing account and the accrued interest
shall be payable to the Companies. Each of the Companies hereby
grants to the Security Trustee a security interest in all monies and
property from time to time in the Cash Collateral Account and the
proceeds thereof. The balance from time to time in the Cash
Collateral Account shall constitute part of the collateral hereunder
and shall not constitute payment of the Loan until applied as
provided in Clause 4.03.
8. SECURITY TRUSTEE AND AGENT
8.01 Recital. Each of the Companies has authorized the execution and
delivery of this Clause 8 pursuant to which the Security Trustee will
act as the Mortgagee of each of the Vessels and Aircraft, as Security
Trustee and secured party with respect to the Containers, as Assignee
and secured party with respect to the insurances of the Vessels,
Aircraft and Containers, as Pledgee, Assignee and secured party with
respect to the Pledged Shares and the limited partnership interests
in ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇, as secured party with respect to the
beneficial interest in the Trust Agreement, and as secured party with
respect to any proceeds thereof.
8.02 Granting Clause. To secure the payment of all sums of money from time
to time owing to the Lenders under this Agreement, the Note and the
Security Documents in the maximum principal amount of $38,000,000
plus any amounts due under the Interest Rate Agreements and accrued
interest thereon and all other amounts owing to the Lenders or the
Security Trustee pursuant to this Agreement, the Note and the
Security Documents ("Indebtedness"), and the performance of the
covenants of the Companies herein and therein contained, and in
consideration of the premises and of the covenants herein contained
and of the extensions of credit by the Lenders, and of the sum of One
Dollar paid to the Companies by the Security Trustee at or before the
delivery hereof, the receipt whereof is hereby acknowledged, the
Security Trustee does hereby declare that it will hold as such
trustee in trust for the benefit of the Lenders, from and after the
execution and delivery thereof, all of its right, title and interest
as mortgagee in, to and under each of the Mortgages, its right, title
and interest as Assignee and secured party under the Insurance
Assignment, its right, title and interest as Pledgee, Assignee and
secured party under the Pledge Agreement, the Assignment of Limited
Partnership Interests and the Beneficial Interest Security Agreement
and its right, title and interest as Security Trustee and secured
party under the Security Agreement.
The right, title and interest of the Security Trustee in and to the
property, rights and privileges described above, from and after the
execution and delivery thereof, and all property hereafter
specifically subjected to the lien of the indenture created hereby
and by the Security Documents by any amendment hereto or thereto are
herein collectively called the "Estate".
TO HAVE AND TO HOLD the Estate unto the Security Trustee and its
successors and assigns forever.
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit
and security of the Lenders and their respective successors and
assigns without any priority of any one over any other.
UPON CONDITION that, unless and until an Event of Default under this
Agreement shall have occurred and be continuing, the respective
Company having title to each Vessel and Aircraft shall be permitted,
to the exclusion of the Security Trustee, to possess and use each
Vessel and Aircraft and EGF V shall be permitted to possess and use
the Containers.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that all property
subject or to become subject hereto is to be held, subject to the
further covenants, conditions, uses and trusts hereinafter set forth,
and each of the Companies, for itself and its successors and assigns,
hereby covenants and agrees to and with the Security Trustee and its
successors in said trust, for the equal and proportionate benefit and
security of the Lenders as hereinafter set forth.
8.03 Appointment of Agent.
Each Lender hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement, the Notes and the Security Documents as are delegated to
the Agent by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto (including, without limitation,
the power to determine whether the Companies will be required to
grant a Security Interest in any of their assets where the provisions
of this Agreement provide for the Agent to make such determination).
As to any matters not expressly provided for by this Agreement, the
Notes or the Security Documents (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be
required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however,
that the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this
Agreement or applicable law. The Agent agrees to give to each Lender
prompt notice of each notice and other report given to it by the
Companies pursuant to the terms of this Agreement.
8.04. Acts of Lenders.
Any request, demand, direction, consent, notice, waiver or other
action provided by this Agreement to be given or taken by Lenders may
be embodied in and evidenced by one or any number of concurrent
written instruments of substantially similar tenor signed by such
Lenders in person or by an agent duly appointed in writing, and such
action shall become effective when such instrument or instruments are
delivered to the Security Trustee. Such a written instrument (and the
action embodied therein and evidenced thereby) is herein sometimes
referred to as the "Act" of the Lenders party to such instrument or
instruments. Proof of the execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose
of this Agreement and shall be conclusive in favor of the Security
Trustee or of the Companies if made in the manner provided in this
Clause 8.04.
The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds,
certifying that the person signing such instrument or writing
acknowledged to him the execution thereof.
Any request, demand, authorization, direction, notice, consent,
waiver or other action by a Lender shall bind any subsequent assignee
of such Lender.
8.05. Notices, etc., to Agent, Security Trustee and the Companies.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Lenders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with,
(1) the Agent or the Security Trustee by any Lender or by the
Companies shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Security Trustee
as provided in Clause 16 hereof,
(2) the Companies by any Lender or by the Security Trustee shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Companies as provided in Clause 16
hereof.
8.06 Notice to Lenders; Waiver.
Where this Indenture provides for notice to Lenders of any event,
such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, postage prepaid, by
certified or registered mail, return receipt requested, telexed or
telefaxed to each Lender in care of the Agent, not later than the
latest date, and not earlier than the earliest date, prescribed for
the giving of such notice.
Where this Agreement provides for notice in any manner, such notice
may be waived in writing by the person entitled to receive such
notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Lenders shall be
filed with the Security Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance
upon such waiver.
8.07 Satisfaction and Discharge of Indenture; Release of Estate.
When all payments to the Lenders in respect of the Loan or otherwise
due under this Agreement, the Note and any Security Documents shall
have been made, the Security Trustee shall release the Estate from
the lien of the indenture created by this Clause 8 and the Security
Documents and neither the Security Trustee nor the Lenders shall have
any further interest in or other right with respect to the Estate.
Notwithstanding the satisfaction and discharge of the indenture
created by this Clause 8 and the Security Documents, the obligations
of the Companies to the Security Trustee under Clause 8.23 hereof
shall survive.
8.08 Power of Sale; Suits for Enforcement.
(a) In case one or more Events of Default under this Agreement or the
Security Documents shall have occurred and shall not have been
remedied, the Security Trustee and/or the Agent (as the case may be),
personally or by agents, with or without entry, upon the written
instructions of the Majority Lenders, exercise such rights and
remedies as are provided in the Agreement and the Security Documents.
8.09 Security Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to any of the Companies or the
property of any of them, the Security Trustee (irrespective of
whether the sums owing to the Lenders under this Agreement, the Note
and the Security Documents shall then be due and payable in
accordance with this Agreement, the Note or the Security Documents or
otherwise) shall be entitled and empowered to intervene in such
proceeding or otherwise and shall be entitled, upon the written
instructions of the Majority Lenders,
(a) to file and prove a claim for the whole amount of the sums owing
and unpaid under the Agreement, the Note and the Security Documents
and interest thereon and to file such other papers or documents as
may be necessary or advisable to have the claims of the Security
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Security Trustee, its
agents and counsel) and of the Lenders allowed in such judicial
proceeding; any claim filed by the Security Trustee shall expressly
preserve all rights and remedies of each Lender in the Estate, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby
authorized by each Lender to make such payments to the Security
Trustee, and if the Security Trustee shall consent to the making of
such payments directly to such Lender, to pay to the Security Trustee
any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Security Trustee, its agents and
counsel, and any other amounts due the Security Trustee under Clause
8.23 hereof.
Nothing herein contained shall be deemed to authorize the Security
Trustee to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the sums owing under the Agreement or the Note
or the rights of any Lender, or to authorize the Security Trustee to
vote in respect of the claim of any Lender in any such proceeding,
except upon the written instructions of such Lender.
8.10 Indenture Trustee May Enforce Claims.
All rights of action and claims under this Agreement, the Note, the
Mortgages, the Beneficial Interest Security Agreement, the Insurance
Assignments, the Pledge Agreement, the Assignment of Limited
Partnership Interests, the Security Agreement or any other Security
Document, may be prosecuted and enforced by the Security Trustee in
its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Security
Trustee, its agents and counsel, be for the ratable benefit of the
Lenders.
8.11 Restoration of Rights and Remedies.
If the Security Trustee or any Lender has instituted any proceeding
to enforce any right or remedy or in the exercise of any power under
this Clause 8 or any of the Security Documents by foreclosure, entry
or otherwise and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to the Security
Trustee or to such Lender, then and in every such case the relevant
Company or Companies, the Security Trustee and the Lenders shall,
subject to any determination in such proceeding, be restored
severally and respectively to their former positions and rights
hereunder, including the position and rights of the Security Trustee
with respect to the Estate, and thereafter all rights, powers and
remedies of the Security Trustee and the Lenders shall continue as
though no such proceeding had been instituted.
8.12 Rights and Remedies Cumulative.
No right, power or remedy herein conferred upon or reserved to the
Security Trustee or to the Lenders is intended to be exclusive of any
other right, power or remedy. Every right, power and remedy shall, to
the extent permitted by law, be cumulative and in addition to every
other right, power and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise and may be exercised from
time to time and as often and in such order as may be deemed
expedient by the Security Trustee or the Lenders. The exercise of any
right, power or remedy shall not be construed as a waiver of the
right to exercise at the same time or thereafter any other right,
power or remedy.
8.13 Delay or Omission not Waiver.
No delay or omission of the Security Trustee, the Agent or of any
Lender to exercise any right, power or remedy accruing upon any Event
of Default shall impair any such right, power or remedy or constitute
a waiver of any such Event of Default or an acquiescence therein.
Every right, power and remedy given by this Agreement or by law to
the Security Trustee, the Agent or the Lenders may be exercised from
time to time, and as often as may be deemed expedient, by the
Security Trustee, the Agent or by the Lenders, as the case may be.
8.14 Control by Lenders.
The Majority Lenders have the right, during the continuance of an
Event of Default:
(a) to require the Security Trustee to proceed to enforce this
Agreement, the Note and the Security Documents either by judicial
proceedings for the enforcement of the payment of such unpaid sums
and the foreclosure of the Mortgages, enforcement under the
Beneficial Interest Security Agreement, the Insurance Assignments,
Pledge Agreement, the Assignment of Limited Partnership Interests and
Security Agreement and the sale of the Estate or, at the election of
the Security Trustee, by the exercise of the power of entry and/or
sale conferred by the relevant Security Document, and
(b) to direct the time, method and place of conducting any proceeding
for any remedy available to the Security Trustee or exercising any
trust or power conferred on the Security Trustee; provided that
(i) such direction shall not be in conflict with any
rule of law or with the provisions of the
Security Documents or this Agreement, and
(ii) the Security Trustee may take any other action
deemed proper by the Security Trustee which is
not inconsistent with such direction.
8.15 Waiver of Appraisement, etc., Laws.
Each of the Companies hereby covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage
of, any appraisement, valuation, stay, extension or redemption law
wherever enacted, now or at any time hereafter in force, to prevent
or hinder the enforcement of the indenture created by this Clause 8
or the Security Documents or the absolute sale of the Estate, or any
part thereof, or the possession thereof by any purchaser at any sale
under the Security Documents; and each such Company, for itself and
all who may claim under it, so far as it now or hereafter lawfully
may, hereby waives the benefit of all such laws. Each such Company,
for itself and all who may claim under it, waives, to the extent
lawful, all right to have the property in the Estate marshalled upon
any foreclosure hereof, and agrees that any court having jurisdiction
to foreclose this Indenture may order the sale of the Estate as an
entirety.
If any law in this Clause 8.15 referred to and now in force, of which
the Owner or its successors might take advantage despite this Clause
8.15, shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to constitute any part of the contract
herein contained or to preclude the application of this Clause 8.15.
8.16 Acceptance of Trusts.
CBK hereby accepts the trusts imposed upon it as Security Trustee by
this Agreement, and the Security Trustee covenants and agrees to
perform the same as herein expressed and agrees to receive and
disburse all monies constituting part of the Estate in accordance
with the terms hereof.
8.17 Certain Duties and Responsibilities of the Security Trustee.
(a) Except during the continuance of an Event of Default,
(i) the Security Trustee undertakes to perform such duties and only
such duties as are specifically set forth herein and in the Security
Documents, and no implied covenants or obligations shall be read into
this Agreement or the Security Documents against the Security
Trustee, and the Security Trustee agrees that it will not manage,
control, use, sell, dispose of or otherwise deal with the Estate,
except as required by the terms of the Security Documents and as
otherwise provided herein; and
(ii) in the absence of bad faith on its part, the Security Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Security Trustee and conforming to the
requirements of this Agreement; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Security Trustee, the
Security Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Agreement.
(b) In case an Event of Default has occurred and is continuing, the
Security Trustee shall exercise such of the rights and powers vested
in it by this Agreement and the Security Documents, and shall use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Agreement shall be construed to relieve the
Security Trustee from liability for its own grossly negligent action,
its own grossly negligent failure to act, or its own willful
misconduct, except that
(i) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Clause 8.17;
(ii) the Security Trustee shall not be liable for any error of
judgment made in good faith by a director, officer, agent
or employee of the Security Trustee, unless it shall be
proved that the Security Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Security Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Majority Lenders
relating to the time, method and place of conducting any
proceeding for any remedy available to the Security
Trustee, or exercising any trust or power conferred upon
the Security Trustee, under this Indenture; and
(iv) no provision of this Agreement shall require the Security
Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights
or powers.
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of
or affording protection to the Security Trustee shall be subject to
the provisions of this Section 8.17.
8.18 Notice of Default.
As promptly as possible after an officer of the Security Trustee
shall obtain actual knowledge of any default hereunder, the Security
Trustee shall transmit by mail, telefax or telex notice of such
default to the Lenders, unless such default shall have been cured or
waived. For the purpose of this Section 8.18, the term "default"
means any event which is an Event of Default.
8.19 Certain Rights of Security Trustee and the Agent.
Except as otherwise provided in Section 8.17 hereof:
(a) the Security Trustee and the Agent may rely upon and shall be
protected in acting or refraining from acting in reliance upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond or other paper or
document reasonably believed by it to be genuine and to have been
signed or presented by the proper person or persons;
(b) any request or direction of the Companies mentioned herein shall
be sufficiently evidenced by a certificate or request signed by an
officer or director of EGF V or its general partner or a duly
authorized attorney-in-fact for EGF V;
(c) whenever in the administration of the indenture or the
obligations created by this Agreement and the Security Documents, the
Security Trustee or the Agent, as the case may be, shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Security Trustee or
the Agent (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon a certificate
signed by an officer or director of any of the Companies or a duly
authorized attorney-in-fact for such Company or Companies;
(d) the Security Trustee and the Agent may consult with counsel and
the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) neither the Security Trustee nor the Agent shall be under any
obligation to exercise any of the rights or powers vested in it or in
the Lenders by this Agreement or the Security Documents at the
request or direction of any of the Lenders, unless such Lenders shall
have offered to the Security Trustee or the Agent, as the case may
be, reasonable security or indemnity (including the advancement of
funds) against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) neither the Security Trustee nor the Agent shall be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond or other paper or document, but the
Security Trustee or the Agent, as the case may be, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit;
(g) the Security Trustee may execute any of the trusts, and the
Security Trustee and the Agent may execute any of the powers
hereunder or perform any duties hereunder, either directly or by or
through agents or attorneys; and
(h) neither the Security Trustee nor the Agent shall be personally
liable, in case of entry by it upon the Estate, for debts contracted
or liabilities or damages incurred in the management or operation of
the Estate.
8.20 Security Trustee not Responsible for Recitals; Warranty.
Neither the Security Trustee nor the Agent makes any representation
as to the value or condition of the Estate or any part thereof, as to
the title of any of the Companies thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of
any security at any time pledged or deposited with the Security
Trustee or the Agent hereunder. Neither the Security Trustee nor the
Agent shall have any responsibility with respect to the recording,
re-recording, filing or re-filing, under the laws of any
jurisdiction, of this Indenture or any other document or statement
that may be required or permitted to be recorded, re-recorded, filed
or re-filed under any such laws to perfect or protect the security
interests created by or pursuant to Clause 8.02 of this Agreement.
Neither the Security Trustee nor the Agent (i) makes any warranty or
representation to any Lender and shall not be responsible to any
Lender for any statements, warranties, or representations (whether
written or oral) made in or in connection with this Agreement, the
Notes or the Security Documents; (ii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement, the Notes or
the Security Documents on the part of the Companies or to inspect the
property (including the books and records) of the Companies.
8.21 Capacity in Which Acting.
CBK as Security Trustee and Agent, is acting hereunder not in its
individual capacity but solely as trustee and agent, respectively,
except as otherwise expressly provided herein, and all persons having
any claim against the Security Trustee and/or the Agent by reason of
the transactions contemplated hereby shall look only to the Estate
for payment or satisfaction and neither the Security Trustee nor the
Agent shall not be accountable under any circumstances in its
individual capacity, except for its own wilful misconduct or gross
negligence.
With respect to the Loan and the Note issued to it, CBK shall have
the same rights and powers under this Agreement, the Note and the
Security Documents as any other Lender and may exercise the same as
though it were not the Security Trustee and the Agent, respectively,
and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include CBK hereunder in its individual capacity. CBK and
its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, the Companies
and any of the Companies' subsidiaries and any Person who may do
business with or own securities of the Companies or any such
subsidiary, all as if CBK were not the Security Trustee and the
Agent, respectively, and without any duty to account therefor to the
Lenders.
8.22 Funds May be Held by Security Trustee.
Subject to Clause 8.34 hereof, any monies held by the Security
Trustee hereunder as part of the Estate may, until paid out by the
Security Trustee as herein provided, be carried by the Security
Trustee on deposit with itself, and neither the Security Trustee nor
the Agent shall have any liability for interest upon any such monies.
8.23 Compensation and Reimbursement.
The Companies hereby jointly and severally agree:
(a) except as otherwise expressly provided herein, to reimburse the
Security Trustee and the Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Security
Trustee or the Agent, as the case may be, in accordance with any
provision of this Agreement and the Security Documents (including the
reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its gross negligence or willful misconduct; and
(b) to indemnify each of the Security Trustee and the Agent (in its
individual capacity and as trustee or agent, respectively, and
including its successors, assigns, officers, directors, agents and
servants) for, and to hold it harmless against, any loss, liability
or expense incurred without gross negligence or willful misconduct on
its part, arising out of or in connection with the acceptance or
administration of the indenture or agency created by this Agreement
and the Security Documents, including, but not limited to, the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder, and any loss, liability, expense or claim arising
out of its possession, management, control use or operation of the
Estate.
As security for the performance of the obligations of the Companies
under this Clause 8.23, the Security Trustee and the Agent shall be
secured under this Indenture and Agreement by a lien on the Estate
prior to the lien thereon of the Lenders, and for the payment of such
expense, reimbursements and indemnity the Security Trustee shall have
the right to use and apply any moneys held by it hereunder in the
Estate.
The indemnity contained in this Clause 8.23 shall survive the
termination of this Agreement and the Security Documents.
8.24 Corporate Trustee Required; Eligibility.
There shall at all times be a Security Trustee hereunder which shall
be CBK or any other corporation organized and doing business under
the laws of the United States of America or of any State or of any
foreign government recognized by the Securities and Exchange
Commission pursuant to Sections 406-408 of the Trust Indenture Reform
Act of 1990, 15 USC ss.77jjj, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $150,000, subject to supervision or examination by Federal or
State authority, and any other applicable law or regulation. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purpose of this Clause 8.24, the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Security Trustee
shall cease to be eligible in accordance with the provisions of this
Clause 8.24, it shall resign immediately in the manner and with the
effect hereinafter specified herein.
8.25 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Security Trustee or the Agent
and no appointment of a successor Security Trustee or Agent pursuant
to this Clause 8.25 shall become effective until the acceptance of
appointment by the successor Security Trustee or Agent, as the case
may be, under Clause 8.26 hereof. Until such acceptance the Security
Trustee or Agent, as the case may be, shall continue to carry out its
duties hereunder.
(b) The Security Trustee and the Agent may resign at any time by
giving written notice thereof to the Companies and the Lenders. If an
instrument of acceptance by a successor Security Trustee or Agent
shall not have been delivered to the Companies and the Security
Trustee or Agent, as the case may be, within 30 days after the giving
of such notice of resignation, the resigning Security Trustee or
Agent may petition any court of competent jurisdiction for the
appointment of a successor Security Trustee or Agent, as the case may
be.
(c) Each of the Security Trustee and the Agent may be removed at any
time by Act of the Majority Lenders, delivered to the Security
Trustee or the Agent, as the case may be, and to the Companies.
(d) If at any time:
(i) the Security Trustee shall cease to be eligible under
Clause 8.24 hereof and shall fail to resign after written
request therefor by any such Lender, or
(ii) the Security Trustee or the Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a
receiver of the Security Trustee or the Agent or of their
respective properties shall be appointed, or any public
officer shall take charge or control of the Security
Trustee or the Agent or of their respective properties or
affairs for the purpose of rehabilitation, conservation or
liquidation, any Lender may petition any court of competent
jurisdiction for the removal of the Security Trustee or the
Agent, as the case may be, and the appointment of a
successor Security Trustee or Agent, as the case may be.
(e) If the Security Trustee or the Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office
of Security Trustee or the Agent for any cause, the Majority Lenders
shall promptly select a successor Security Trustee or Agent, as the
case may be, and the Companies shall appoint such selected person as
a successor Security Trustee or Agent, as the case may be. If no
successor Security Trustee or Agent shall have been so appointed by
the Lenders and the Companies and accepted appointment in the manner
hereinafter provided, the Security Trustee or Agent, as the case may
be, or any Lender for at least six months may, on behalf of itself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Security Trustee or
Agent, as the case may be.
(f) Each of the Security Trustee and the Agent shall give notice of
each resignation and each removal of the Security Trustee or Agent,
as the case may be, and each appointment of a successor Security
Trustee or Agent by mailing written notice of such event to the
Lenders. Each notice shall include the name of the successor Security
Trustee or Agent, as the case may be, and the address of its office
for purposes of Clause 8.05 hereof.
8.26 Acceptance of Appointment by Successor.
Every successor Security Trustee or Agent appointed hereunder shall
execute, acknowledge and deliver to the Companies and to the retiring
Security Trustee or Agent, as the case may be, an instrument
accepting such appointment, and thereupon the resignation or removal
of the retiring Security Trustee or Agent shall become effective and
such successor Security Trustee or Agent, without any further act
deed, or conveyance, shall become vested with all the estates,
properties, rights, powers, trusts and duties of the retiring
Security Trustee or Agent, as the case may be; but such retiring
Security Trustee or Agent shall, upon payment of its charges, execute
and deliver, together with the successor Security Trustee or Agent,
an amendment hereto, and such amendments to the Mortgages, the
Beneficial Interest Security Agreement, Insurance Assignments, Pledge
Agreement, the Assignment of Limited Partnership Interests and
Security Agreement, in due form, and in the required number of
counterparts, as may be required for recording, conveying and
transferring to such successor Security Trustee or Agent, as the case
may be, upon the trusts herein expressed all the estates, properties,
rights, powers and trusts of the retiring Security Trustee or Agent,
as the case may be, and shall duly assign, transfer and deliver to
such successor Security Trustee or Agent all property and money held
by such retiring Security Trustee or Agent, as the case may be,
hereunder. Upon request of any such successor Security Trustee or
Agent, the Companies shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor
Security Trustee or Agent all such estates, properties, rights,
powers and trusts.
No successor Security Trustee shall accept its appointment unless at
the time of such acceptance such successor Security Trustee shall be
qualified and eligible under Clause 8.24.
8.27 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Security Trustee may be merged or converted
or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Security Trustee
shall be a party, or any Person succeeding to all or substantially
all of the corporate trust business of the Security Trustee, shall be
the successor of the Security Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under Clause 8.24, without
the execution or filing of any paper or any further act on the part
of any of the parties hereto.
8.28 Amendments With Consent of the Security Trustee.
The Companies and the Security Trustee, at any time and from time to
time, may enter into any one or more amendments supplemental hereto
or amendments to the Security Documents, all in form satisfactory to
the Security Trustee, for the following purposes:
(a) to correct or amplify the description of any property at any time
subject to the lien of the indenture created by this Agreement and
the Security Documents or to subject to the lien of this Indenture
any additional property; or
(b) to evidence the succession of another Person to any of the
Companies, and the assumption by any such successor of the covenants
of the Companies herein and in the Security Documents contained; or
(c) to add to the covenants of the Companies for the benefit of the
Lenders, or to surrender any right or power or in the Security
Documents herein conferred upon the Companies; or
(d) to correct or supplement any defective or inconsistent provision
herein or to convey, transfer, assign, mortgage or pledge any
property to or with the indenture created by this Agreement and the
Security Documents; or
(e) to cure any ambiguity or to add or modify any other provisions
and agreements in this Agreement or any Security Document in any
manner which will not adversely affect the interests of the Lenders;
or
(f) to provide for the appointment of any successor Security Trustee
hereunder, in accordance with this Clause 8.
8.29 Amendments with Consent of Lenders (and Agent).
With the consent of the Majority Lenders, by Act of such Lenders
delivered to the Companies and the Security Trustee, the Companies
may, and the Security Trustee, subject to Section 8.30 hereof, shall
enter into an amendment supplemental hereto to add any provisions to
or change in any manner or eliminate any of the provisions of this
Agreement or the Security Documents or modify in any manner the
rights of the Lenders under this Agreement or the Security Documents
or to release property from the lien of this Indenture pursuant to
this Agreement and the Security Documents; provided that no such
amendment or waiver shall, without the consent of the all the Lenders
(and, if such amendment or waiver affects the rights and obligations
of the Agent, the Agent),
(a) change the maturity of the principal of, or any installment of
interest on, the Indebtedness or any portion thereof, or reduce the
principal amount thereof or the interest thereon, or change the place
of payment where, or the coin or currency in which, or the interest
thereon, is payable or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof, or
(b) create any security interest with respect to the Estate ranking
prior to, or on a parity with, the security interest created by this
Agreement and the Security Documents, or deprive any Lender of the
lien created by this Agreement and the Security Documents on the
Estate, except as expressly permitted herein or in any Security
Document, or
(c) change, modify or amend the definition of Majority Lenders, whose
consent is required for any such amendment or any waiver (of
compliance with certain provisions of this Indenture or of certain
defaults hereunder and their consequences) provided for herein or in
any Security Document, or
(d) modify any of the provisions of this Clause 8.29 or Clause 8.14
hereof, except to increase any percentage herein or therein or to
provide that certain other provisions of this Agreement or other
documents referred to herein cannot be modified or waived without the
consent of the Majority Lenders.
8.30 Documents Affecting Immunity or Indemnity.
If in the opinion of the Security Trustee or the Agent any document
required to be executed pursuant to the terms of Clause 8.29 hereof
affects any interest or right or duty or immunity or indemnity in
favor of the Security Trustee or the Agent under this Agreement or
any Security Document, the Security Trustee or the Agent, as the case
may be, may in its discretion decline to execute such document.
8.31 Execution of Amendments.
In executing, or accepting the additional trusts created by, any
amendment permitted by this Clause 8 or the modifications thereby of
the trusts created hereby, the Security Trustee and/or the Agent
shall be entitled to receive and (subject to Clause 8.17 hereof)
shall be fully protected in relying upon, an opinion of counsel
satisfactory to the Security Trustee or the Agent, as the case may
be, stating that the execution of such amendment is authorized or
permitted by this Agreement.
Promptly after the execution by the Companies and the Security
Trustee of any amendment, the Companies shall duly mail or deliver
otherwise a conformed copy of such amendment to the Agent (if
different from the Security Trustee). The validity of any such
amendment, however, shall not be impaired or affected by failure to
give such notice or by any defect therein.
8.32 Effect of Amendment.
Upon the execution of any amendment hereunder, this Agreement shall
be modified in accordance therewith, and such amendment shall form a
part of this Agreement for all purposes; and every Lender theretofore
or thereafter issued and delivered hereunder shall be bound thereby.
8.33 Indemnification by the Companies.
The Companies hereby jointly and severally covenant and agree that
the Estate shall be free of any lien, claim or encumbrance created by
any Company and not contemplated or permitted by the transactions
described in this Agreement or in the Security Documents arising as a
result of claims against any of the Companies not related to the
ownership of the Vessels, the Aircraft or the Containers and that it
will promptly take such action as may be necessary to duly discharge
any such lien, claim or encumbrance.
8.34 Cash Held by Security Trustee.
(a) All cash held by the Security Trustee hereunder or under any
Security Document shall be held as a special deposit in trust for the
purposes for which held.
(b) Cash held by the Security Trustee hereunder or under any Security
Document (i) need not be segregated; (ii) shall not be invested or
reinvested; and (iii) shall bear interest only as may be agreed by
the Companies and the Security Trustee.
8.35 Distribution of Payments Received After an Event of Default.
All payments received and amounts realized by the Security Trustee
after an Event of Default shall have occurred and be continuing, as
well as all payments or amounts then held or thereafter received by
the Security Trustee as part of the Estate while such Event of
Default shall be continuing, shall be distributed by the Security
Trustee in accordance with the Security Documents.
8.36 Distributions Withheld From the Companies.
Anything in this Agreement to the contrary notwithstanding, after a
director, officer, agent or employee of the Security Trustee shall
have actual knowledge of an Event of Default, all amounts which would
otherwise be distributable to the Companies shall be held by the
Security Trustee as part of the Estate and, if such an Event of
Default shall cease to be continuing before the time such amounts may
become distributable pursuant hereto, such amounts shall be
distributed to the Companies.
9. EVENTS OF DEFAULT
9.01 Each of the following events shall constitute an Event of Default
(whether such event shall occur or come about voluntarily or
involuntarily or by operation of law or regulation or pursuant to, or
in compliance with, any judgment, decree or order of any court or
other authority):
(a) any of the Companies or any other party to any of the
Security Documents (i) fails to pay on the due date any
principal due in respect of the Loan or the Note; or (ii)
default shall be made in the payment of interest due in
respect of the Loan or the Note, when and as the same shall
be due and payable, and such default shall continue in
respect thereof for three (3) Business Days; or (iii)
default shall be made in the payment of any other sum
payable pursuant to this Agreement, the Note or any of the
Security Documents, or any agreement entered into in
connection with this Agreement, the Note or any of the
Security Documents, when and as the same shall be due and
payable, and such default shall continue in respect thereof
for five (5) Business Days; or
(b) any of the Companies breaches any of the Covenants in
Clause 7.03; or
(c) any of the Companies defaults under, or in the due and
punctual observance and performance of, any other material
provision of this Agreement and where, in the reasonable
opinion of the Lenders, such default is capable of remedy,
such default is not remedied or the relevant Company or
Companies shall not have taken and be diligently pursuing
all necessary steps to remedy such default within 15 days
after written notice from the Lenders requesting action to
remedy the same; provided, that notwithstanding the
foregoing, any such default shall be remedied within 45
days after such written notice; or
(d) an Event of Default under any of the Mortgages or any other
of the Security Documents shall have occurred and be
continuing; or
(e) any representation or warranty made by the Companies or any
other party to any of the Security Documents, in or
pursuant to this Agreement or any of the Security Documents
or in any notice, certificate, instrument or statement
contemplated hereby or thereby or made or delivered
pursuant hereto or thereto is, or proves to be, untrue or
incorrect in any material respect when made or deemed to be
repeated; or
(f) (i) any material indebtedness of any of the Companies is
not paid when due or becomes prematurely payable or capable
of being prematurely declared payable as a consequence of a
default with respect thereto or any Security Interest over
any assets of any of the Companies is enforced or becomes
capable of being enforced; or (ii) any of the Companies
defaults in the payment of any obligation, whether direct
or contingent, for borrowed money or the acquisition of
capital equipment on a finance lease or title retention
basis or in the performance or observance of the material
terms of any instrument pursuant to which such obligation
was created or securing such obligation or providing for
any such acquisition or lease or (iii) a default occurs in
respect of any such obligation of any person, firm or
corporation, the payment or performance of which has been
guaranteed, directly or indirectly, by any of the
Companies; or
(g) (i) any preparatory or other steps are taken by any person
to convene a meeting of any of the Companies for the
purposes of considering or passing any resolution or
petition for the winding-up or dissolution of any of the
Companies (other than any Company that does not at that
time own, directly or indirectly, any assets), or (ii) a
petition is presented or an order is made or a resolution
is passed for the winding-up or dissolution of any of the
Companies (other than any Company that does not at that
time own, directly or indirectly, any assets), or (iii) any
of the Companies becomes insolvent or is deemed unable to
pay its debts within the meaning of the appropriate
bankruptcy laws or any of the Companies becomes unable to
pay its debts as they fall due, or (iv) any of the
Companies stops or threatens to stop making payments
generally or declares or threatens to declare a moratorium
or suspension of payments with respect to all or any part
of its debts or enters into any composition, scheme,
compromise or other arrangement with its creditors
generally (or any class of them), or (v) any preparatory or
other steps are taken by any person to appoint an
administrative or other receiver or similar official of any
of the Companies or any of its assets, or (vi) any meeting
of any of the Companies is convened or any other
preparatory or other steps are taken for the purpose of
considering an application for an administration order for
any of the Companies or such an administration order is
made by a court, or (vii) anything analogous to any of the
foregoing events occurs in any applicable jurisdiction; or
(h) a ▇▇▇▇▇▇▇▇, sheriff or other official takes possession of
the whole or any material part of the assets of any of the
Companies or a distress, execution or other process is
levied or enforced upon or sued out against the whole or a
material part of the assets of any of the Companies and
such taking or process is not released or terminated within
the time provided herein or in the Security Documents; or
(i) there shall occur a material adverse change in the
financial conditions, results of operations or financial
position of any of the Companies taken as a whole or any
event occurs which renders it unlawful or impossible for
(i) any of the Companies to perform or observe, or to
procure the performance or observance of, any of its
material obligations or undertakings contained in this
Agreement, the Note, or any of the Security Documents, or
(ii) the Lenders to exercise any of the material rights and
remedies conferred on the Lenders under this Agreement or
any of the Security Documents; or
(j) any authorization, approval, consent, license, exemption,
filing or registration or other requirement necessary to
enable any of the Companies to comply with any of its
material obligations or undertakings contained in this
Agreement, the Note or any of the Security Documents is
materially modified, revoked or withheld or does not remain
in full force and effect; or
(k) without the prior consent of the Agent, FSI shall (i) be
removed or resign from its position or otherwise fail to
continue as general partner of EGF V or (ii) sell,
transfer, exchange or otherwise dispose of all or any
portion of its general partnership interest in EGF V; or
(l) without the prior consent of the Agent, any of TVI, CVI or
COVI shall (i) be removed or resign from its position or
otherwise fail to continue as general partner of each of
Trader, California or Columbus, respectively or (ii) sell,
transfer, exchange or otherwise dispose of all or any
portion of its general partnership interest in each of
Trader, California or Columbus, respectively; or
(m) any of the Vessels or Aircraft shall become a Total Loss
and either (x) the Agent does not receive within 120 days
(or such longer period as the Agent may agree) following
the occurrence of such Total Loss, insurance proceeds
arising from such Total Loss in an amount not less than the
amount for which such Vessel or Aircraft, as the case may
be, is required to be insured under the relevant Mortgage
as at the date of the event or circumstances giving rise to
such Total Loss or any of the insurers shall disclaim
coverage with respect to such Total Loss or (y) the
Companies do not provide the Lenders with, or procure the
provision to the Lenders of, additional Pledged Equipment
in accordance with Clause 7.03(c)(i) of this Agreement. For
the purpose of this Clause 9.01(m), (i) an actual Total
Loss of such Vessel or Aircraft, as the case may be, shall
be deemed to have occurred at the date and time when such
Vessel or Aircraft, as the case may be, was lost but if the
date of the loss is unknown the actual Total Loss shall be
deemed to have occurred on the date on which such Vessel or
Aircraft, as the case may be, was last reported, (ii) a
constructive Total Loss shall be deemed to have occurred at
the date and time at which notice of abandonment of such
Vessel or Aircraft, as the case may be, is given to the
insurers of such Vessel or Aircraft and (iii) a
compromised, agreed or arranged Total Loss shall be deemed
to have occurred on the date of the relevant compromise,
agreement or arrangement; or
(n) for any reason whatsoever, any of the Vessels or Aircraft
ceases to be managed by the Approved Manager, in either
case on terms substantially in accordance with those
approved by the Agent; or
(o) the security constituted by any of the Security Documents
is materially imperilled or jeopardised; or
(p) this Agreement, the Note or any of the other Security
Documents ceases at any time to be the legal, valid and
binding obligations of any of the Companies or any other
party thereto (other than the Lenders); or
(q) any encumbrance other than one permitted hereunder or under
the Security Documents shall be created over any of the
assets or property of any of the Companies; or
(r) a final judgment against any of the Companies in an amount
greater than or equal to One Million Dollars ($1,000,000)
shall be rendered and, within thirty (30) days after entry
thereof, such judgment shall not have been discharged or
execution stayed or, within thirty days after the
expiration of any such stay, such judgment shall not have
been discharged.
9.02 Upon the occurrence of any other Event of Default:
(a) the Agent, by notice to the Companies, may terminate the
obligations of the Lenders under this Agreement, whereupon
the same shall be so terminated; and/or
(b) if it is an Event of Default specified in paragraph
(g)(iii)-(vi) of Clause 9.01, the Lender's obligations
hereunder shall automatically terminate and the unpaid
balance of the Loan and accrued interest thereon and all
other amounts payable under this Agreement, the Notes and
the Security Documents shall be immediately due and
payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived; and/or
(c) the Agent, by notice to the Companies, may declare the
Loan, accrued interest thereon and all other amounts
payable under this Agreement, the Note and the Security
Documents either immediately due and payable or payable on
demand, whereupon the Loan, accrued interest thereon and
all other amounts payable under this Agreement, the Note
and the Security Documents shall become immediately due and
payable or (as the case may be) payable on demand by the
Agent and in such event the Agent may also by notice to the
Companies require that the Companies refrain from declaring
or paying any dividend or making any other distribution of
assets or profits to any partner or shareholder; and/or
(d) the Agent may take any other action, exercise any other
right or pursue any other remedy conferred upon the Agent
by this Agreement and/or by all or any of the Security
Documents or by any applicable law or regulation as a
consequence of such Event of Default.
9.03 Upon the occurrence of an Event of Default, the Agent may apply all
moneys received by the Agent (including proceeds realized on the sale
or liquidation of any collateral security, insurance proceeds and
other moneys of any of the Companies or for the account of any of the
Companies the application of which has not elsewhere herein or in the
Security Documents been specifically provided for) as follows:
FIRST, to the payment or reimbursement of all the
reasonable costs of the Agent incurred or made in the
exercise, protection or pursuance by the Agent of its
rights or remedies under this Agreement, the Note or any
Security Document including, but not limited to, the
expenses of any sale or of any taking, attorneys' fees and
court costs, together with interest thereon as provided
herein and to provide adequate indemnity to the Agent
against security interests, liens, charges, encumbrances or
rights claiming priority over or equality with the Security
Interest or liens created under the Security Documents;
SECOND, to the payment of accrued interest on and principal
of the Loan and the Note whether due or not;
THIRD, to the payment of all other sums payable by the
Companies to the Lenders whether under this Agreement or
otherwise, including without limitation sums payable under
any Interest Rate Agreements between any of the Companies
and the Lenders, whether due or not, together with interest
thereon as provided herein and of all damages, liquidated
or otherwise; and
FOURTH, to the payment of any surplus thereafter remaining
to the Borrowers or to whomsoever may be entitled thereto.
9.04 the Agent may exercise any right of counterclaim, setoff, banker's
lien or otherwise which it may have with respect to moneys or other
property of the Companies held by the Agent.
9.05 the Agent may to the extent permitted by applicable law bring suit at
law, in equity, in admiralty or in any other appropriate proceeding
or forum for any purpose including, but not limited to (i) for the
specific performance of any covenant or agreement contained in any
Security Document; (ii) for any injunction against a violation of any
of the terms thereof; (iii) in aid of the exercise of any power
granted thereby or by law; or (iv) to recover judgment for any and
all amounts due on the Loan or the Note or under any Security
Document.
10. FEES AND EXPENSES
10.01 The Companies shall jointly and severally pay to the Agent:
(a) an amendment fee as separately agreed between the Companies
and CBK upon execution and delivery by the Agent of this
Agreement.
(b) an annual agency fee of $40,000 per annum payable quarterly
in advance.
10.02 The Companies shall reimburse the Agent promptly on demand for all
reasonable costs, fees and expenses (including, but not limited to,
legal fees and expenses and Valuations as provided herein) incurred
by the Agent or the Lenders in connection with:
(a) the negotiation, preparation and execution of this
Agreement and the Security Documents; and/or
(b) the maintaining, preserving or enforcing of, or attempting
to preserve or enforce, any of their rights under this
Agreement and the Security Documents (or any of them);
and/or
(c) any variation of, or amendment or supplement to, any of the
terms of this Agreement, the Note and the Security
Documents (or any of them); and/or
(d) any consent or waiver required from the Agent or the
Lenders arising from this Agreement, the Note and the
Security Documents (or any of them), and in each case,
regardless of whether the same is actually implemented,
completed or granted, as the case may be.
10.03 The Companies shall jointly and severally pay promptly all stamp,
documentary and other like duties and Taxes to which this Agreement,
the Note and the Security Documents (or any of them) may be subject
or give rise and shall indemnify the Agent and the Lenders on demand
against any and all liabilities with respect to or resulting from any
delay or omission on the part of the Companies to pay any such duties
or Taxes.
11. PAYMENTS AND CALCULATIONS
11.01 All payments to be made by the Companies to the Agent for the Lenders
under this Agreement, the Note and any of the Security Documents to
which the Companies are a party shall be made by not later than 11.00
a.m. (New York City time) on the due date in same day Dollar funds
settled through the New York Interbank Payments System (or in such
other Dollar funds and/or settled in such other manner as the Agent
shall specify as being customary at the time for the settlement of
transactions of the type contemplated by this Agreement) to the
Agent, or to such other account with such other bank as the Agent
shall from time to time notify to the Companies.
11.02 If any sum payable by the Companies under this Agreement, the Note or
any of the Security Documents to which any of the Companies is a
party shall become due on a day which is not a Business Day, the due
date therefor shall be extended to the next succeeding Business Day,
unless such Business Day falls in the next calendar month, in which
event such due date shall be the immediately preceding Business Day,
and interest shall be payable on such sum during any such extension
at the rate payable on the original due date.
11.03 The Agent shall maintain accounts showing the amounts from time to
time lent by the Lenders under this Agreement, and all other sums
owing by the Companies under this Agreement, the Note and the
Security Documents and all payments in respect thereof made by the
Companies from time to time. Such accounts, in the absence of
manifest error, shall be conclusive evidence as to any amounts from
time to time owing by the Companies under this Agreement, the Note
and the Security Documents.
11.04 All payments of interest, commitment fees and any other payments
hereunder of an annual or periodic nature shall accrue from
day-to-day and shall be calculated on the basis of the actual number
of days elapsed in a 360 day year.
12. NO COUNTERCLAIM, TAXATION
12.01 All payments to be made by or on behalf of the Companies to the Agent
pursuant to this Agreement, the Note and any of the Security
Documents to which any of the Companies is a party shall be made (a)
without set-off, counterclaim or condition whatsoever and (b) free
and clear of, and without deduction for or on account of, any present
or future Taxes unless the Company are required by law or regulation
to make any such payment subject to any Taxes.
12.02 In the event that any of the Companies is required by any law or
regulation to make any deduction or withholding on account of any
Taxes which arise as a consequence of any payment due under this
Agreement, the Note or any of the Security Documents to which any of
the Companies is a party, then:
(a) the Companies shall notify the Agent promptly as soon as
they become aware of such requirement;
(b) the Companies shall remit promptly the amount of such Taxes
to the appropriate taxation authority, and in any event
prior to the date on which penalties attach thereto;
(c) such payment shall be increased by such amount as may be
necessary to ensure that the Agent receives a net amount
which, after deducting or withholding such Taxes, is equal
to the full amount which the Agent would have received had
such payment not been subject to such Taxes; and
(d) the Companies shall indemnify the Lenders and the Agent
against any liability of the Lenders for such Taxes.
12.03 Not later than thirty days after each deduction or withholding of any
such Taxes, the Companies shall forward to the Lender evidence
satisfactory to the Agent that such Taxes have been remitted to the
appropriate taxation authority.
13. CHANGES IN CIRCUMSTANCES
13.01 In the event that by reason of:
(a) the introduction of, or any change in, any applicable law
or regulation, or any change in the interpretation or
application thereof; or
(b) compliance by the Lenders with any directive, request or
requirement (whether or not having the force of law) of any
central bank, government, or analogous monetary authority,
it becomes unlawful, prohibited or contrary to such directive,
request or requirement for the Lenders to maintain or give effect to
any of their obligations as contemplated by this Agreement, then the
Agent shall notify the Borrowers thereof and, if the Loan or any
portion thereof has been advanced by the Lenders, the Borrowers shall
consult with Agent to determine ways to avoid the effect of such
measures but if no such mechanism can be determined the Borrowers
shall prepay the Loan forthwith in accordance with the terms of this
Agreement and the obligations of the Lenders shall thereupon
terminate.
13.02 If the Agent shall reasonably conclude and certify to the Companies
that:
(a) the effect of any applicable law, regulation or regulatory
requirements, or the interpretation or application thereof,
or any change therein (including the imposition of Taxes on
payments hereunder, other than Taxes on the overall net
income of the Lenders); or
(b) the effect of complying with any applicable directive,
request or requirement (whether or not having the force of
law) of any central bank, governmental or analogous
monetary authority (including any type of liquidity, stock
or capital adequacy controls or other banking or monetary
controls or requirements which affects the manner in which
the Lenders allocate capital resources to their obligations
hereunder),
is to:
(i) increase the cost to the Lenders of making, funding or
maintaining their commitment hereunder or the Loan or being
a party to this Agreement; or
(ii) reduce the amount of any payment to the Agent for the
Lenders under this Agreement or the effective return to the
Lenders on their capital under this Agreement,
then, and in any such case, the Agent shall notify the Companies as
soon as practicable thereof and the Companies shall from time to
time, jointly and severally, pay to the Agent on demand such amounts
as the Agent shall reasonably specify to be necessary to compensate
the Lenders for such increased cost or such reduction.
13.03 If and each time that prior to any Interest Period the Agent shall
have determined in good faith that, by reason of circumstances (the
"Circumstances") affecting the London Interbank Dollar Market,
either:
(a) adequate and fair means do not exist for ascertaining the
rate of interest applicable to the Loan (or any part
thereof) during such Interest Period pursuant to Clause 3
hereof; or
(b) Dollars are not available to the Lender in order to fund
the Loan (or any part thereof) during such Interest Period,
then the Agent shall as soon as practicable give notice of such
determination to the Companies and, if such notice shall be given
prior to the advance of the Loan (or the relevant part thereof) by
the Lender, the right of the Borrowers to borrow hereunder shall be
suspended during the continuance of the Circumstances, provided,
however, that during the thirty days following such notice, the
Companies and the Agent shall negotiate in good faith in order to
arrive at an alternative interest rate or (as the case may be) an
alternative basis for the Lenders to fund or continue to fund the
Loan (or the relevant part thereof) during such Interest Period. If
within such thirty day period an alternative interest rate or (as the
case may be) an alternative basis to fund or to continue to fund the
Loan (or the relevant part thereof) is agreed upon, such alternative
interest rate or (as the case may be) such alternative basis shall
take effect in accordance with its terms. If the Companies and the
Agent fail to agree on such an alternative interest rate or (as the
case may be) alternative basis within such thirty day period and the
Circumstances are continuing at the end of such thirty day period,
then the Agent shall set an interest period and interest rate
representing the cost to the Lender of funding the Loan plus the
Margin in Dollars. If the Circumstances shall continue at the end of
such interest period, the procedure in this Clause 13.03 shall be
repeated. If the Companies shall not agree with such rate then the
Companies shall give not less than 15 Business Days' irrevocable
notice of prepayment to the Lender in which case the commitment of
the Lenders hereunder for the Loan (or the relevant part thereof)
shall thereupon be canceled and, if the Loan (or the relevant part
thereof) is outstanding, the Borrowers shall, jointly and severally,
prepay the Loan (or the relevant part thereof) on the first Business
Day after such period in accordance with the terms of this Agreement
and the obligations of the Lender shall thereupon terminate to such
extent.
14. FUNDING LOSSES
14.01 The Companies shall, jointly and severally, compensate the Lenders,
upon its written certification (which certification shall set forth
in reasonable detail the basis for demanding such amounts and the
calculation thereof and shall, absent manifest error, be final and
conclusive and binding upon all parties hereto), for all reasonable
costs, losses, expenses and liabilities (including, without
limitation, any loss, interest, expense, penalty or other amounts
paid or incurred by the Lenders arising from the liquidation or
re-employment of deposits or funds required by it to make or carry
the Loan), which the Lenders sustain:
(a) if any repayment or prepayment (including, without
limitation, payment after acceleration) of the Loan occurs
on a date which is not the last day of an Interest Period
applicable thereto;
(b) as the result of any default by any of the Borrowers in
repaying the Loan or any other amounts arising from the
Loan when required by the terms of this Agreement; or
(c) as the result of the occurrence and/or continuance of any
Event of Default (or event which, with the giving of notice
and/or lapse of time or other applicable condition, might
constitute an Event of Default) and/or the acceleration of
repayment of the Loan pursuant to Clause 9.02.
14.02 If, under any applicable law or regulation, and whether pursuant to a
judgment being made or registered against the Companies (or any of
them) or the liquidation of the Companies (or any of them) or for any
other reason, any payment due under or in connection with this
Agreement is made or fails to be satisfied in a currency (the
"payment currency") other than the currency in which such payment is
due under or in connection with this Agreement (the "contractual
currency"), then to the extent that the amount of such payment
actually received by the Agent, when converted into the contractual
currency at the rate of exchange, falls short of the amount due under
or in connection with this Agreement, the Companies, jointly and
severally and as a separate and independent obligation, shall
indemnify and hold harmless the Lenders against the amount of such
shortfall. For the purposes of this Clause 14.02, "rate of exchange"
means the rate at which the Lenders are able on or about the date of
such payment to purchase the contractual currency with the payment
currency and shall take into account any premium and other costs of
exchange with respect thereto.
15. SECURITY
15.01 The Companies hereby undertake with the Agent and the Lenders to
execute, deliver and perform the provisions of, and procure the
execution, delivery and performance by the other parties thereto
(other than the Agent or the Lenders) of, the Security Documents and
the provisions thereof at the times and in the manner provided in
this Agreement and in the Security Documents so that all such
documents shall both at the date of such execution and delivery and
at all times during the Security Period be valid and binding
obligations of the Companies and such other parties enforceable in
accordance with their respective terms.
16. COMMUNICATIONS
16.01 Except as otherwise provided for in this Agreement, all notices or
other communications arising from this Agreement to any party hereto
shall be in writing and shall be deemed to be duly given or made when
delivered (in the case of personal delivery or letter) and when
dispatched (in the case of telex or telefax) to such party addressed
to it at the address appearing below (or at such address as such
party may hereafter specify for such purpose to the other by notice
in writing):
(a) in the case of the Companies:
PLM Equipment Growth Fund V
c/o PLM Financial Services, Inc.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Controller and General Counsel
Telex: 34430
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) in the case of the Lenders:
At the respective addresses set forth on Schedule 1 as from
time to time amended
(c) in the case of the Agent and Security Trustee:
Christiania Bank og Kreditkasse,
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Loan Administration
Telex: 824-277 CBNY UF
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
A written notice includes a notice by telex or telefax. A notice or
other communication received on a non-working day or after business
hours in the place of receipt, shall be deemed to be served on the
next following working day in such place.
17. ASSIGNMENTS
17.01 This Agreement shall be binding upon and inure to the benefit of the
Agent, the Lenders, the Companies and their respective successors and
permitted assigns.
17.02 The Companies may not assign or transfer all or any part of their
rights and/or obligations under this Agreement.
17.03 The Lenders may assign, transfer, participate or syndicate (with the
Agent acting as agent), at no cost to the Companies, all or any part
of Lenders' rights or obligations under this Agreement, the Note and
the Security Documents or change its lending office, in any such
case, with the prior consent of EGF V, which consent shall not be
unreasonably withheld. Each such Lender shall notify the Companies
promptly following any such assignment or transfer or change of
lending office.
17.04 The Agent may disclose to any potential assignee or transferee of all
or any part of any Lender's rights or obligations under this
Agreement, the Note and the Security Documents or to any such
participant or any other person who may otherwise enter into
contractual relations with the Agent or any such Lender in relation
to this Agreement, the Note and the Security Documents, information
about this Agreement, the Note and/or the Security Documents (or any
of them) and the Companies and/or its related entities with the prior
consent of EGF V, which consent shall not be unreasonably withheld,
and on a confidential basis with respect to any nonpublic
information.
18. MISCELLANEOUS
18.01 No delay or omission on the part of the Agent or the Lenders in
exercising any right, power or remedy under this Agreement shall
impair such right, power or remedy or be construed as a waiver
thereof nor shall any single or partial exercise of any such right,
power or remedy preclude any further exercise thereof or the exercise
of any other right, power or remedy. The rights, powers and remedies
herein provided are cumulative and not exclusive of any rights,
powers and remedies provided by law and may be exercised from time to
time and as often as the Agent deems expedient.
18.02 Except as provided in, and subject to Clause 8, no waiver of any
provision of this Agreement or the Notes, or any consent or approval
to any departure by the Companies therefrom, shall be effective
unless the same shall be given in writing and signed by the Majority
Lenders and then only for the purpose and upon the terms for which it
is given.
18.03 If at any time any one or more of the provisions in this Agreement is
or becomes invalid, illegal or unenforceable in any respect under any
law or regulation, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be in any way
affected or impaired thereby.
18.04 The obligations of the Companies under this Agreement shall remain in
full force and effect until the Lenders shall have received all
amounts due or to become due to it hereunder and under the Security
Documents in accordance with the terms hereof and thereof. Without
prejudice to the foregoing, the obligations of the Companies under
Clauses 10, 12, 13.02 and 14 shall survive the repayment of the Loan.
18.05 The Clause and subclause headings herein and the Table of Contents
are for convenience only and shall not affect the construction
hereof.
19. LAW AND JURISDICTION
19.01 THIS AGREEMENT, THE NOTE AND THE SECURITY DOCUMENTS SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. EACH OF THE PARTIES HERETO, TO THE MAXIMUM EXTENT IT CAN
LEGALLY DO SO, HEREBY WAIVES ITS RIGHT TO A JURY TRIAL IN CONNECTION
WITH THIS AGREEMENT, THE NOTE AND THE SECURITY DOCUMENTS.
19.02 The Companies hereby irrevocably submit to the jurisdiction of the
courts of the State of New York and of the United States District
Court for the Southern District of New York in any action or
proceeding brought against any of them by the Lenders, the Agent or
the Security Trustee under this Agreement or any instrument delivered
hereunder and hereby irrevocably appoint CT Corporation System with a
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as their
attorney-in-fact and agent for service of summons or other legal
process thereon, which service may be made by serving a copy of any
summons or other legal process in any such action or proceeding on
such agent and such agent is hereby authorized and directed to accept
by and on behalf of the Companies service of summons and other legal
process of any such action or proceeding against the Companies. The
service, as herein provided, of such summons or other legal process
in any such action or proceeding shall be deemed personal service and
accepted by the Companies as such, and shall be legal and binding
upon the Companies for all the purposes of any such action or
proceeding. Final judgment (a certified or exemplified copy of which
shall be conclusive evidence of the fact and of the amount of any
indebtedness of the Companies to the Lenders) against the Companies
in any such legal action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment. The
Companies further covenant and agree that so long as the Companies
shall be obligated to the Lender hereunder the Companies shall
maintain a duly appointed agent for the service of summons or other
legal process in New York, New York, for purposes of any legal action
or proceeding brought by the Lender hereunder. The Companies will
advise the Agent promptly of any change of address of the foregoing
agent or of the substitution of another agent therefor. In the event
that the foregoing agent or any other agent appointed by the
Companies shall not be conveniently available for such service or if
the Companies fail to maintain an agent as provided herein, the
Companies hereby irrevocably appoint the person who then is the
Secretary of State of New York as such attorney-in-fact and agent.
Each Company will advise the foregoing agent of the appointment made
hereby but failure so to advise shall not affect the appointment made
hereby. Notwithstanding anything herein to the contrary, the Agent
may bring any legal action or proceeding in any other appropriate
jurisdiction.
20. RIGHTS OF CONTRIBUTION
20.01 To provide for just and equitable contribution among the Companies,
the Companies hereby agree, as between themselves, that if any
payment is made by a Company (a "Funding Company") under this
Agreement, such Funding Company shall be entitled to a contribution
from the other Companies for such payment, such contribution to be
made in the manner and to the extent set forth in this Clause 20. Any
amount payable as a contribution hereunder shall be determined as of
the date on which the related payment is made by a Funding Company.
Each other Company shall be liable to such Funding Company in an
aggregate amount, subject to Clause 20.02 hereof, equal to (i) the
ratio of (x) the Net Assets of such Company to (y) the aggregate Net
Assets of all of the Companies multiplied by (ii) the amount of such
payment made by, or on account of, such Funding Company. For purposes
of any calculations pursuant to this Clause 20, "Net Assets" for any
Company shall mean an amount equal to the excess of the fair saleable
value of the assets of such Company as at such date (without taking
into account the rights of such Company under this Clause 20), and
excluding the value of any shares of stock owned by such Company in
any other Company on such date over the amount that would be required
to pay the probable liabilities of such Company determined as at such
date (excluding the obligations of such Company under this Clause 20)
on all of its debts. Any contribution hereunder may be made by
adjustment to the intercompany accounts maintained by EGF V with
respect to each Company.
20.02 The Companies acknowledge that the right of contribution hereunder
shall constitute an asset of the party to which such contribution is
owing.
21. NONRECOURSE
21.01 Notwithstanding anything to the contrary contained herein, the
Lenders agree that no judgment based on each of the Note, this
Agreement or the Security Documents shall be sought or obtained
against FSI individually and that any judgment against the Companies,
and the sole recourse of the Lenders for a default hereunder, shall
be limited to the assets of the Companies. This limitation of
liability shall not apply to any damages sustained by the Lenders by
reason of fraud in the making of the Loan by the Companies or FSI.
22. RELEASE OF CERTAIN COMPANIES
22.01 The Lenders, the Agent and the Security Trustee hereby agree that
each of Balboa, BMI, Divisadero, DVI, Ashbury and ASI is hereby
released from its obligations under this Agreement, the Notes and the
Security Documents to which it is a party.
IN WITNESS whereof the parties hereto have entered into this Agreement on the
date first above written.
PLM EQUIPMENT GROWTH FUND V by its General Partner, PLM
Financial Services, Inc.
By:____________________________
Its:
TRADER VESSEL LIMITED PARTNERSHIP by its General Partner,
Trader Vessel Inc.
By:____________________________
Its:
TRADER VESSEL INC.
By:____________________________
Its:
CALIFORNIA VESSEL LIMITED PARTNERSHIP by its General
Partner, California Vessel Inc.
By:____________________________
Its:
CALIFORNIA VESSEL INC.
By:____________________________
Its:
COLUMBUS VESSEL LIMITED PARTNERSHIP by its General Partner,
Columbus Vessel Inc.
By:____________________________
Its:
COLUMBUS VESSEL INC.
By:____________________________
Its:
REDCAR INVESTMENTS LIMITED
By:____________________________
Its:
CHRISTIANIA BANK OG KREDITKASSE, as Lender
By:____________________________
Its:
By:____________________________
Its:
ING LEASE STRUCTURED FINANCE B.V., as Lender
By:____________________________
Its:
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH as Agent
and Security Trustee
By:____________________________
Its:
By:____________________________
Its:
SCHEDULE 1
The Lenders
Name Commitment
Christiania Bank og Kreditkasse $25,000,000
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ING Lease Structured Finance B.V. $13,000,000
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
SCHEDULE 2
Liens
1. Liens in favor of PLM Worldwide Leasing Corp. in respect of the
Qualified Assets.
SCHEDULE 3
Approved Appraisers