EXHIBIT 10.68
77
PARTICIPATION AGREEMENT
among
▇▇▇▇▇▇ INTERNATIONAL INDUSTRIES, INCORPORATED
Obligor
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION
in its individual capacity and as trustee,
as Obligee
FOUR WINDS FUNDING CORPORATION
as Lender
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH
as Agent and Security Trustee
BANK OF TOKYO - MITSUBISHI TRUST COMPANY
as Owner Participant
and
BTM CAPITAL CORPORATION
as Letter of Credit Issuer
Dated as of September 30, 1999
MANUFACTURING EQUIPMENT
FINANCING AGREEMENT
78
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT, dated as of September 30,
1999 (together with all amendments and supplements hereto, this
"Agreement") is among ▇▇▇▇▇▇ INTERNATIONAL INDUSTRIES,
INCORPORATED, a Delaware corporation (together with its
successors and permitted assigns "Obligor"), STATE STREET BANK
AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual
capacity but solely as trustee (together with its successors and permitted
assigns, "Obligee") and in its individual capacity, but only where so
specified, (together with its successors and permitted assigns, "Trust
Company"), FOUR WINDS FUNDING CORPORATION, a Delaware
corporation (together with its successors and assigns, "Lender"),
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK
BRANCH, the New York Branch of a German banking corporation as
agent for Lender (together with its successors and permitted assigns
"Agent") and as security trustee (together with its successors and
permitted assigns, "Security Trustee"), BANK OF TOKYO -
MITSUBISHI TRUST COMPANY, a New York trust company
(together with its successors and permitted assigns, the "Owner
Participant") and BTM CAPITAL CORPORATION, a Delaware
corporation (together with its successors and permitted assigns, the "LC
Issuer").
W I T N E S S E T H:
WHEREAS, Obligee has agreed to finance certain manufacturing
equipment pursuant to an Equipment Agreement of even date herewith
between Obligor and Obligee (the "Equipment Agreement");
WHEREAS, Lender has agreed to make a loan or loans to Obligee
subject to the conditions, restrictions and limitations in this Agreement,
for the purpose of financing Obligee's acquisition of the manufacturing
equipment to be financed under the Equipment Agreement;
WHEREAS, to induce Lender to make a loan or loans to Obligee,
Obligee has agreed to provide Security Trustee on behalf of Lender
certain security in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, the parties hereto agree as follows:
1.Definitions.
Unless the context otherwise requires, capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth or
referred to in Appendix A.
2.Representations and Warranties.
2.1. Obligor Representations and Warranties. Obligor hereby
represents and warrants as of the Closing Date and on each Funding
Date for the benefit of each other party hereto that:
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(a) Obligor is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation set forth above, has
full power, authority and legal right under such laws to execute, deliver
and perform its obligations under the Operative Documents to which it
is a party and is qualified to do business in and is in good standing in
each state or other jurisdiction in which the nature of its business makes
such qualification necessary, except where failure to so qualify would
not have a material adverse effect on Obligor;
(b) the financing of the Equipment, the execution and delivery of the
Operative Documents and the other related instruments, documents and
agreements to which it is a party, and the compliance by Obligor with
the terms hereof and thereof and the payments and performance by
Obligor of any of its obligations hereunder and thereunder (i) have been
duly and legally authorized by appropriate corporate action taken by
Obligor, (ii) are not in contravention of, and will not result in a violation
or breach of, any of the terms of Obligor's certificate of incorporation,
its by-laws or any provisions relating to the capital stock of Obligor, and
(iii) do not violate or constitute a breach of any provision of law, any
order of any court or other agency of government, or any indenture,
agreement or other instrument to which Obligor is a party, or by or
under which Obligor or any of Obligor's property is bound except
where such violation or breach would not be expected to have a material
adverse effect on Obligor and would not affect Obligee's interest in the
Trust Estate, Security Trustee's interest in the Collateral or any party's
remedies under the Operative Documents, or conflict with, result in a
breach of, or constitute (with due notice and/or lapse of time) a default
under any such indenture, agreement or instrument except where such
conflict, breach or default would not be expected to have a material
adverse effect on Obligor and would not affect Obligee's interest in the
Trust Estate, Security Trustee's interest in the Collateral or any party's
remedies under the Operative Documents, or result in the creation or
imposition of any Lien, other than Permitted Liens, upon any of
Obligor's property or assets and (iv) do not require, on the part of
Obligor or any shareholder or Subsidiary thereof, the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action in respect of, any Governmental Entity except for
filings, if any, made pursuant to any notice reporting requirement
applicable to it;
(c) each Operative Document to which it is a party and each Security
Document to which a Subsidiary of Obligor is a party has been executed
by the duly authorized officer or officers of Obligor or such Subsidiary,
respectively, and delivered to the other parties thereto and (assuming
due authorization, execution and delivery of the Operative Documents
by the other parties thereto) constitutes, or when executed by the duly
authorized officer or officers of Obligor or such Subsidiary and
delivered to the other parties thereto, such Operative Documents will
constitute, the legal, valid and binding obligations of Obligor or such
Subsidiary, enforceable in accordance with their terms except as limited
by any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights from time
to time in effect and by general principles of equity including those
applicable to the enforceability of the remedy of specific performance;
(d) Immediately prior to giving effect to the Cross-Receipt therefor,
Obligor has good and marketable title to each Item of Equipment, and
Obligor has not granted any Lien on any Item of Equipment or the
proceeds thereof, the Equipment Agreement or the insurances required
under the Equipment Agreement other than those that arise under the
Operative Documents, and no Lien, other than Permitted Liens, has
attached to any Item of Equipment, the
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proceeds thereof or the Equipment Agreement or the insurances
required under the Equipment Agreement, or in any manner has affected
adversely Obligee's or Security Trustee's right, title and interest therein;
(e) each Item of Equipment is personal property and not a fixture
attached to realty under Applicable Law, and each Item of Equipment
that has a serial number or other identification number set forth therefor
on the Related Lease Supplement has such serial number or other
identification number permanently affixed thereto.
(f) (i) when the Subsidiary Equipment Agreements are executed, the
security interests in the Equipment granted to Obligor by the
Subsidiaries pursuant to the Subsidiary Equipment Agreements, (ii) the
security interests in the Equipment and, when the Subsidiary Equipment
Agreements are executed, in Subsidiary Equipment Agreements granted
to Obligee by Obligor pursuant to the Equipment Agreement and (iii)
the security interests in the Collateral granted to Security Trustee
pursuant to this Agreement in each case constitute a first priority Lien
with respect to such Collateral under Applicable Law, and Obligor,
Obligee and Security Trustee shall be entitled to all of the rights,
benefits and priorities provided to a holder of a first priority Lien under
Applicable Law.
(g) for each Item of Equipment located in the United States for which a
serial number or other identification number is identified on the Related
Lease Supplement, upon the filing of appropriately completed UCC
financing statements with the Equipment described in the manner
described on the Related Equipment Agreement Supplement (i)
executed by the Obligor Subsidiary for the benefit of Obligor and filed
with the Secretary of State or other appropriate state filing office for
UCC personal property financing statements for the state in which the
Equipment is located and in addition, if such Item of Equipment is
located in Massachusetts, with the town clerk for the City of Bedford
and if in New York with the filing officer for Orange County, (ii)
executed by Obligor for the benefit of Obligee and filed with the
Secretary of State or other appropriate state filing office for UCC
personal property financing statements for the state in which the
Equipment is located and in addition, if such Item of Equipment is
located in Massachusetts, with the town clerk for the City of Bedford
and if in New York with the filing officer for Orange County and (iii)
and by Obligee for the benefit of the Security Trustee and filed with the
Secretary of State or other appropriate state filing office for UCC
personal property financing statements for the state in which the
Equipment is located and in addition, if such Item of Equipment is
located in Massachusetts, with the town clerk for the City of Bedford
and if in New York with the filing officer for Orange County the
security interest in each such Item of Equipment granted to Obligor by
such Subsidiary pursuant to the related Subsidiary Equipment
Agreement, the security interests in such Item of Equipment and in the
related Subsidiary Equipment Agreement granted to Obligee by Obligor
pursuant to the Equipment Agreement, and the security interests in such
Item of Equipment and in the Equipment Agreement granted to Security
Trustee pursuant to this Agreement constitute a first priority perfected
Lien with respect to such Equipment, Subsidiary Equipment Agreement
and Equipment Agreement under Applicable Law and Obligor, Obligee
and Security Trustee shall be entitled to all of the rights and benefits and
priorities provided to a holder of a perfected first priority Lien under
Applicable Law, and on each Funding Date, all
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recordations and filings shall have been accomplished with respect to
this Agreement in each jurisdiction as may be required by law to
establish and perfect Obligor's, Obligee's and Security Trustee's
respective rights in and to such Item of Equipment, Subsidiary
Equipment Agreement and Equipment Agreement, and any giving of
notice or any other action to such end required by Applicable Law has
been given or taken;
(h) Obligor's chief executive office and principal place of business is
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇ and Obligor's records with respect to the transactions
contemplated by the Operative Documents are located at such address;
(i) no Equipment Agreement Default or Equipment Agreement Event of
Default has occurred and is continuing and no Event of Loss or event
which with the passage of time, would become or Event of Loss has
occurred;
(j) there is no litigation or other proceeding now pending or, to the
Obligor's knowledge, threatened, against or affecting Obligor or any
Subsidiary thereof, in any court or before any regulatory commission,
board or other administrative governmental agency which will adversely
affect or impair the right, title or interest of Obligee to any Item of
Equipment, the Equipment Agreement or any Operative Document, or
the security interest of Security Trustee in any Item of Equipment or the
Equipment Agreement, this Agreement or any Operative Document, or
which, if decided adversely to Obligor or such Subsidiary, will
materially adversely affect the business operations or financial condition
of Obligor;
(k) without limiting the generality of the foregoing, the retention of
possession by Obligor of the Items of Equipment to be financed
hereunder following the transfer of an interest therein to Obligee shall
not be deemed fraudulent or void as against any present or future
creditor of Obligor under Applicable Law, nor would any subsequent
bona fide purchaser from Obligor of such Items of Equipment, in the
event of any attempted subsequent transfer thereof by Obligor, acquire
any title to or rights therein superior to Obligee's right, title or interest
therein;
(l) Obligor has delivered to Obligee, Owner Participant, Lender and
Agent its most recent annual report on Form 10-K and quarterly report
on Form 10-Q and they are complete and correct in all material respects,
accurately present the financial condition of Obligor on the dates for
which, and the results of its operations for the periods for which, the
same have been furnished and have been prepared in accordance with
generally accepted accounting principles consistently followed
throughout the periods covered thereby; and there has been no material
adverse change in the condition of Obligor and its Subsidiaries taken as
a whole, financial or otherwise, since the date of such Form 10-Q;
(m) Obligor has not entered into the transactions contemplated herein,
directly or indirectly, in connection with any arrangement in any way
involving any employee benefit plan or plans or related trust to which it
is a party in interest or disqualified person, all within the meaning of
ERISA, and the Code, and, assuming the accuracy of the representations
made in Sections 2.5(f) and (g) and 2.6(a) and (b) herein, the execution
and delivery of, and the consummation of the transactions contemplated
by, the Operative Documents, will be exempt from, or will not involve
any transaction which is subject to, the prohibitions of either Section
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406 of ERISA or Section 4975 of the Code and will not involve any
transaction in connection with which a penalty could be imposed under
Section 502(i) of ERISA or a tax could be imposed pursuant to Section
4975 of the Code;
(n) Obligor is not an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended;
(o) Obligor has delivered to Obligee a true, correct and complete
Certificate of Costs evidencing payment for the Items of Equipment
financed by Obligee;
(p) payment in full has been made by or on behalf of Obligor to the
vendor of each Item of Equipment; and
(q) after giving effect to the Cross-Receipt and Related Equipment
Supplement therefor, each Item of Equipment shall be leased to an
Obligor Subsidiary, and the identification of such Subsidiary, the
location of its chief executive office and the location of such Item of
Equipment are each identified on the Related Equipment Supplement.
2.2. Obligee Representations and Warranties. Obligee hereby
represents and warrants as of the Closing Date and on each Funding
Date for the benefit of each party hereto that:
(a) Obligee is a trust duly established and validly existing under the
laws of the State of Connecticut, has full power, authority and legal
right under such laws to execute, deliver and perform its obligations
under the Operative Documents to which it is a party and has its chief
executive offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford,
Connecticut;
(b) the financing of the Equipment, the execution and delivery of the
Operative Documents and the other related instruments, documents and
agreements to which it is a party, and the compliance by Obligor with
the terms hereof and thereof and the payments and performance by
Obligor of any of its obligations hereunder and thereunder (i) have been
duly and legally authorized by appropriate trust action taken by Obligee,
(ii) are not in contravention of, and will not result in a violation or
breach of, any of the terms of Obligee's declaration of trust and related
trust instruments, and (iii) will not violate or constitute a breach of any
provision of law, any order of any court or other agency of government,
or any indenture, agreement or other instrument to which Obligee is a
party, or by or under which Obligee or any of Obligee's property is
bound, or be in conflict with, result in a breach of, or constitute (with
due notice and/or lapse of time) a default under any such indenture,
agreement or instrument, or result in the creation or imposition of any
Lien, other than Permitted Liens, upon any of Obligee's property or
assets and (iv) will not require, on the part of Trustee or any Affiliate
thereof, the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
United States federal or Connecticut local governmental or public
commission, board, authority or agency except for filings, if any, made
pursuant to any notice reporting requirement applicable to it;
(c) each Operative Document to which it is a party has been executed by
the duly authorized officer or officers of Obligee and delivered to the
other parties thereto and
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constitutes, or when executed by the duly authorized officer or officers
of Obligee and delivered to the other parties thereto, such Operative
Documents will constitute, the legal, valid and binding obligations of
Obligee, enforceable in accordance with their terms except as limited by
any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights from time to
time in effect and by general principles of equity including those
applicable to the enforceability of the remedy of specific performance;
(d) there are no outstanding judgments against Obligee and no pending
or threatened action (known to Obligee) or proceeding affecting Obligee
before any court, governmental agency or arbitrator, in any jurisdiction;
(e) there is no tax, levy, impost, deduction, charge or withholding which
may be imposed on or asserted against the Collateral or any part thereof
or any interest therein, or against Lender, Agent or Security Trustee
under the laws of the State of Connecticut either (i) on or by virtue of
the execution or delivery of Operative Documents or any other
document contemplated thereby, or (ii) on any payment to be made by
Obligee pursuant to the Loan Documents or any other document
contemplated thereby to which Obligee is a party; and
(f) Obligee has no indebtedness or other liabilities, whether contingent
or otherwise, other than its obligations under and as contemplated by the
Operative Documents.
2.3. Further Obligee Representations and Warranties. Obligee hereby
represents and warrants as of the Closing Date and on each Funding
Date for the benefit of Lender, Agent and Security Trustee that:
(a) after giving effect to each Cross Receipt, Obligee has all rights and
interests in each Item of Equipment (including the parts and components
thereof) and the Collateral, free and clear of all Liens other than
Permitted Liens;
(b) (i) the security interests in the Collateral granted to Security Trustee
pursuant to this Agreement constitute a first priority Lien with respect to
such Collateral under Applicable Law, (ii) for each Item of Equipment
located in the United States for which a serial number or other
identification number is identified on the Related Lease Supplement,
upon the filing of appropriately completed UCC financing statements
with the Equipment described in the manner described on the Related
Equipment Agreement Supplement executed by Obligee for the benefit
of the Security Trustee and filed with the Secretary of State for the State
of Connecticut and if such Item of Equipment is located in
Massachusetts, with town clerk for the City of Bedford and if in New
York with filing officer for Orange County the security interest in each
such Item of Equipment granted to Security Trustee pursuant to this
Agreement constitutes a first priority perfected Lien with respect to such
Equipment under Applicable Law and Security Trustee shall be entitled
to all of the rights and benefits and priorities provided to a holder of a
perfected first priority Lien under Applicable Law,
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(iii) on each Funding Date, Security Trustee's interests in the
Equipment Agreement have been registered in accordance with Section
14.3 of the Equipment Agreement (iv) and all recordations and filings
shall have been accomplished with respect to this Agreement in each
jurisdiction in the United States as may be required by law to establish
and perfect Security Trustee's rights in and to the Equipment located in
the United States and in the Equipment Agreement and any giving of
notice or any other action to such end required by Applicable Law has
been given or taken;
(c) Obligee's chief executive office and principal place of business is
located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford, Connecticut;
and Obligee's records with respect to the transactions contemplated by
the Operative Documents and located at such address;
(d) no Equipment Agreement Default, Equipment Agreement Event of
Default, Loan Default or Loan Event or Default has occurred and is
continuing and no Event of Loss, or event which with the passage of
time would become an Event of Loss, has occurred; and
(e) Obligee makes each of the representations and warranties made by it
in each other Operative Document to which Obligee is a party to, and
for the benefit of, Lender, LC Issuer, Agent and Security Trustee as if
the same were set forth in full herein.
2.4. Trust Company Representations and Warranties. Trust Company
hereby represents and warrants as of the Closing Date and each Funding
Date for the benefit of each of the parties hereto that:
(a) Trust Company is a national banking association, duly organized,
validly existing and in good standing under the laws of the United
States of America, and has full power, authority and legal right under
such laws to execute, deliver and perform its obligations under this
Agreement and the Trust Agreement;
(b) each of the Trust Agreement and (to the extent of the covenants,
agreements, representations and warranties of Trust Company in its
individual capacity contained herein) this Agreement has been duly
executed and delivered by Trust Company, and (assuming due
authorization, execution and delivery of the Trust Agreement by Owner
Participant) the Trust Agreement and (to the extent of the covenants,
agreements, representations and warranties of Trust Company in its
individual capacity contained herein) this Agreement constitutes a legal,
valid and binding obligation of Trust Company, enforceable against
Trust Company in accordance with its terms;
(c) neither the execution or delivery by Trust Company of the Trust
Agreement or this Agreement nor the performance by Trust Company
of its obligations hereunder or thereunder (i) conflicts or will conflict
with or violate in any respect any applicable United States federal law
governing the banking or trust powers of Trust Company or any
Connecticut law applicable to or binding upon Trust Company or any of
its Affiliates, or any of their respective properties, (ii) conflicts or will
conflict with or violate Trust Company's articles of association or by-
laws, (iii) conflicts or will conflict with, or contravene, violate or result
in a breach of, any indenture, mortgage, loan agreement, lease or any
other material agreement or
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material instrument to which Trust Company or any of its Affiliates is a
party or by which any of their respective properties is bound, (iv) results
or will result in the creation or imposition of any Lien (other than
Permitted Liens) on the Collateral, or (v) requires or will require, on the
part of Trust Company or any Affiliate of Trust Company, the consent
or approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any Government Entity
governing the banking or trust powers of Trust Company, except for
filings, if any, made pursuant to any notice reporting requirement
applicable to it; provided, that no representation is made as to any laws,
rules or regulations applicable to the particular nature of the Collateral
or the use thereof;
(d) Trust Company is not in breach of any covenants or agreements
made by it in the Trust Agreement or by it in its individual capacity in
this Agreement;
(e) Trust Company's chief executive office is located at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford, Connecticut, and Trust Company's
records with respect to the transactions contemplated by the Operative
Documents are located at such address; and
(f) there are no actions, suits or proceedings pending or, to the best
knowledge of Trust Company, threatened before any court or by or
before any other Government Entity, or any arbitrator, which (i) either
individually or in the aggregate, would have a material adverse effect on
the Trust Company or the Trust Estate or on the right, power or
authority of Trust Company to perform its obligations under the
Operative Documents to which it is, or is to become a party or on
Obligee's ability to perform its obligations under any Operative
Document to which it is, or is to become, a party or (ii) call into
question the validity or the enforceability of any Operative Document.
2.5. Owner Participant Representations and Warranties. Owner
Participant represents and warrants as of the Closing Date and on each
Funding Date for the benefit of each other party hereto that
(a) Owner Participant is a trust company duly organized, validly
existing and in good standing under the laws of the state of New York,
has full power, authority and legal right under such laws to execute,
deliver and perform its obligations under the Operative Documents to
which it is a party and is qualified to do business in, is in good standing
in all material respects in, each state or other jurisdiction in which the
nature of its business makes such qualification necessary, except where
failure to so qualify would not have a material adverse effect on Owner
Participant;
(b) the execution and delivery of the Operative Documents and the other
related instruments, documents and agreements to which it is a party,
and the compliance by Owner Participant with the terms hereof and
thereof and the payments and performance by Owner Participant of any
of its obligations hereunder and thereunder (i) have been duly and
legally authorized by appropriate corporate action taken by Owner
Participant, (ii) are not in contravention of, and will not result in a
violation or breach of, any of the terms of Owner Participant's
certificate of incorporation (or equivalent document), its by-laws or any
provisions relating to the capital stock of Owner Participant, and (iii)
will not violate or constitute a breach of any provision of law, any order
of any court or other agency of government, or any indenture,
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agreement or other instrument to which Owner Participant is a party, or
by or under which Owner Participant or any of Owner Participant's
property is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under any
such indenture, agreement or instrument, or result in the creation or
imposition of any Lien upon any of Owner Participant's property or
assets and (iv) will not require, on the part of Owner Participant or any
Affiliate thereof, the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
United States federal or New York local governmental or public
commission, board, authority or agency except for filings, if any, made
pursuant to any notice reporting requirement applicable to it;
(c) each Operative Document to which it is a party has been executed by
the duly authorized officer or officers of Owner Participant and
delivered to the other parties thereto and constitutes, or when executed
by the duly authorized officer or officers of Owner Participant and
delivered to the other parties thereto, such Operative Documents will
constitute, the legal, valid and binding obligations of Owner Participant,
enforceable in accordance with their terms except as limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights from time to
time in effect and by general principles of equity including those
applicable to the enforceability of the remedy of specific performance;
(d) Owner Participant is not in breach of any covenants or agreements
made by it in the Trust Agreement or in this Agreement;
(e) there are no actions, suits or proceedings pending or, to the best
knowledge of Owner Participant, threatened before any court or by or
before any other Government Entity, or any arbitrator, which (i) either
individually or in the aggregate, would have a material adverse effect on
the Collateral or on the right, power and authority of Owner
Participant's ability to perform its obligations under any Operative
Document to which it is, or is to become, a party or (ii) call into
question the validity thereof or the enforceability thereof in accordance
with the terms thereof;
(f) no part of the funds used or to be used by it to make its investment in
the Trust Estate contemplated hereby does or will constitute assets of an
employee benefit plan, within the meaning of ERISA or any applicable
regulation thereunder, or any assets or any plan, as defined in Section
4975(e)(1) of the Code; and
(g) it will not transfer its interest herein unless the prospective transferee
makes the representations and warranties set forth in clause (f) above as
of the date of such transfer, as if it had originally been a party hereto.
2.6. Lender Representations and Warranties. Lender hereby represents
and warrants on the Closing Date and each Funding Date for the benefit
of Obligee that:
(a) either (a) no part of the funds to be used by it for the funding of any
Loan shall constitute assets of an "employee benefit plan", within the
meaning of ERISA or any applicable regulation thereunder or assets of a
"plan" as defined in Section 4975(e)(1) of the Code or (b) all of such
funds are assets of an insurance company general account as such term
is
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defined in Prohibited Transaction Exemption 95-60 issued by the U.S.
Department of Labor ("PTE 95-60") and as of the date the Notes are
acquired there is no employee benefit plan with respect to which the
aggregate amount of such general account's reserves and liabilities for
the contracts held by or on behalf of such employee benefit plan and all
other employee benefit plans maintained by the same employer (and
affiliates thereof as defined in Section V(a)(1) of PTE 95-60) or by the
same employee organization (in each case determined in accordance
with the provisions of PTE 95-60) exceeds 10% of the total reserves and
liabilities of such general account (as determined under PTE 95-60)
(exclusive of separate account liabilities) plus surplus as set forth in the
National Association of Insurance Commissioners Annual Statement
filed with the state of domicile of the Lender.
(b) it will not transfer its interest herein unless the prospective transferee
(i) is a Permitted Lender Assignee, and (ii) makes the representations
and warranties set forth in clause (a) above as of the date of such
transfer, as if it had originally been a party hereto.
2.7. Warranty Disclaimers. EACH OF OBLIGEE, OWNER
PARTICIPANT AND LENDER DEMISE, LEASE AND FINANCE
THE ITEMS OF EQUIPMENT HEREUNDER AS-IS AND WHERE-
IS WITH ALL FAULTS AND IN WHATEVER CONDITION THEY
MAY BE IN AND EXPRESSLY DISCLAIMS AND MAKES NO
REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR
IMPLIED, AS TO THE DESIGN, CONDITION, QUALITY,
CAPACITY, MERCHANTABILITY, DURABILITY, SUITABILITY
OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR
QUALIFICATION FOR ANY PARTICULAR TRADE OR ANY
OTHER MATTER CONCERNING, THE ITEMS OF EQUIPMENT.
OBLIGOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY
CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT
OR INFRINGEMENT) IT MIGHT HAVE AGAINST OBLIGEE,
OWNER PARTICIPANT, LENDER, AGENT OR SECURITY
TRUSTEE FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL
OR CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY
THE ITEMS OF EQUIPMENT OR BY OBLIGOR'S LOSS OF USE
THEREOF FOR ANY REASON WHATSOEVER.
3. Conditions Precedent.
3.1. Obligee Conditions. Obligee shall have no obligation to acquire
any Item of Equipment and subject it to the Equipment Agreement
unless on the Funding Date therefor each of the following conditions are
fulfilled to the satisfaction of Obligee:
(a) no Equipment Agreement Default or Equipment Agreement Event of
Default, or with respect to such Item of Equipment, an Event of Loss,
has occurred and is continuing, nor has any information come to
Obligee's attention from which Obligee could reasonably and in good
faith infer that such event is likely to occur;
(b) no material adverse change in the financial condition of Obligor has
occurred since March 31, 1999, which, in Obligee's reasonable opinion,
would impair the ability of Obligor to pay or perform its obligations
under the Equipment Agreement;
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(c) such Item of Equipment is reasonably acceptable to Obligee, Lender
Security Trustee and LC Issuer, and is free of all Liens other than
Permitted Liens;
(d) the Acquisition Cost of such Item of Equipment, when added to the
total Acquisition Costs of all Items of Equipment to be financed
hereunder will not cause the Maximum Acquisition Cost to be
exceeded;
(e) Obligee has received an invoice for such Item of Equipment in the
form described in Section 4.2 hereof and a Certificate of Costs duly
executed by Obligor, dated the Funding Date therefor substantially in
the form of Exhibit B hereto;
(f) Obligee shall have received executed copies of each Operative
Document including the Related Exhibit A with Lender's consent
thereto, the Related Equipment Agreement Supplement and an executed
Cross Receipt;
(g) all licenses, registrations, permits, consents and approvals required
by Applicable Laws or by any Government Entity in connection with
Obligee's rights and interests in, and the delivery, acquisition,
installation, use and operation of, each Item of Equipment shall have
been obtained to the satisfaction of Obligee;
(h) Obligee shall have received a certificate in form and substance
satisfactory to Obligee dated such Funding Date from Obligor, executed
by a duly authorized officer of Obligor, the truth and accuracy of which
shall be a condition to the Obligee to acquire any Item of Equipment,
confirming that each of the representations and warranties set forth in
Section 2.1 hereof are true and correct as if made on and as of such date;
(i) Obligee shall have received from Obligor, in form and substance
satisfactory to Obligee, resolutions of the board of directors of Obligor
or other written evidence of appropriate corporate action, and the
certificate of incorporation and by-laws, each certified by the secretary
of Obligor, duly authorizing the execution, delivery and performance of
the Participation Agreement and Equipment Agreement and each other
document to be delivered in connection therewith to which it is a party,
together with an incumbency certificate as to the person or persons
authorized to execute and deliver such documents on behalf of Obligor;
(j) on the Closing Date, Obligee shall have received a written opinion of
counsel to Obligor, addressed to Obligee, Lender, Agent, Owner
Participant, LC Issuer and Security Trustee in the form of Exhibit C-1
hereto;
(k) Obligor shall have paid all of the reasonable costs and expenses
incurred by Trust Company, Obligee, Lender, Owner Participant, Agent
and Security Trustee (including attorneys' fees) in relation to the
negotiation, preparation and execution of the Operative Documents to
be executed and delivered on or before the Closing Date;
(l) Obligee shall have received the proceeds of the Related Note; and
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(m) Obligee shall have received at least three LIBOR Banking Days
before the Funding Date an executed "Funding Notice and Indemnity
Agreement" in the form of Exhibit E hereto.
(n) Obligee shall have received such other documents, filings, opinions,
certificates and waivers, in form and substance satisfactory to Obligee,
as Obligee may reasonably require including without limitation
documents, filings and opinions that Obligee may reasonably require in
order to secure or perfect its interests in each Item of Equipment.
3.2. Lender Conditions. Lender shall have no obligation to make a
Loan for the acquisition of any Item of Equipment hereunder unless on
the Funding Date therefor each of the following conditions are fulfilled
to the satisfaction of Lender:
(a) the conditions precedent to Obligee's obligation to finance such
Items of Equipment to Obligor in accordance with the terms hereof and
of the Equipment Agreement shall have been satisfied, without waiver
or modification (except as consented to by Lender), and Lender shall
have received copies of all documents and opinions with respect thereto
and any other evidence of satisfaction of such conditions as Lender may
reasonably request;
(b) the following shall have been duly authorized, executed and
delivered by the respective party or parties thereto (other than Lender),
shall be in full force and effect and received by Lender: (i) this
Agreement, (ii) the Related Note, (iii) a certified copy of the Trust
Agreement, (iv) the original counterpart of the Equipment Agreement
and the Related Equipment Agreement Supplement, (v) for any Item of
Equipment located in the United States, UCC-1s of the type described in
Section 2.1(g), (vi) for any Item of Equipment located in France, a
French Commercial Pledge Agreement, (vii) for any Item of Equipment
located in Germany, each of the four Chattel Mortgage Agreements,
(viii) for any Item of Equipment located in England or Wales, each of
the three English Debentures, (ix) a certified copy of the Cross Receipt
for such Item of Equipment and (x) the Liquidity Asset Purchase
Agreement dated as of the date hereof among Lender, Commerzbank
and the other Liquidity Providers thereto;
(c) such Item of Equipment shall be reasonably acceptable to Lender,
and Lender shall be satisfied that on the Funding Date Obligee has all
rights and interests to such Items of Equipment subject to the
Equipment Agreement and the Liens of this Agreement;
(d) the Loan shall on the Funding Date qualify as a legal investment for
Lender under any Applicable Laws regulating investments to which it
may be subject (without recourse to provisions in any such law
permitting limited investments without restriction as to the character of
the particular investment), and Lender shall have received such evidence
as it may reasonably request to establish compliance with this condition;
(e) Lender shall have received a certificate in form and substance
satisfactory to Lender dated such Funding Date from each of Obligee,
Trust Company and Owner Participant, the truth and accuracy of which
shall be a condition to the obligation of Lender to make the Loan,
confirming that the respective representations and warranties of the
party delivering such certificate, set forth in Section 2 hereof are true
and correct as if made on and as of such date;
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(f) Lender shall have received from each of Obligee, Trust Company
and Owner Participant, in form and substance satisfactory to Lender
resolutions of the board of directors of such party or other written
evidence of appropriate corporate action, and the certificate of
incorporation and by-laws of such party, each certified by the secretary
thereof, duly authorizing the execution, delivery and performance of the
Operative Documents and each other document to be delivered in
connection therewith to which it is a party, together with an incumbency
certificate as to the person or persons authorized to execute and deliver
such documents on behalf of such party;
(g) no Loan Default or Loan Event of Default shall have occurred; all
proceedings taken on the Closing Date in connection with the
transactions contemplated hereby and all documents and papers relating
thereto shall be satisfactory to Lender;
(h) On the Closing Date, Lender shall have received written opinions of
counsel to Obligee and Owner Participant in the forms of Exhibits C-2
and C-3 hereto, respectively, and if such Item of Equipment is located in
France, Germany or England, special counsel in such country in the
form of Exhibit C-4, C-5 or C-6 hereto; and
(i) Lender shall have received such other documents, filings, opinions,
certificates and waivers, in form and substance satisfactory to Lender, as
Lender may reasonably require including without limitation documents,
filings and opinions that Lender may reasonably require in order to
secure or perfect its interests in each Item of Equipment.
4. Transfer Agreement.
4.1. Owner Participant Commitment. Subject to and upon the terms and
conditions herein set forth for the benefit of Owner Participant and
Obligee, during each Acquisition Period, Owner Participant agrees to
make an equity contribution to the Trust Estate on or before each
Funding Date in an amount equal to the aggregate of the Equity
Components for each Item of Equipment the rights and interests in
which are to be transferred by Obligee hereunder on such Funding Date.
4.2. Transfer of Equipment. Subject to and upon the terms and
conditions herein set forth for the benefit of Obligee and Lender during
each Acquisition Period, Obligor agrees to transfer all rights and
interests to Obligee and Obligee agrees to finance, certain
manufacturing equipment. The manufacturing equipment to be
transferred by Obligor to Obligee pursuant to this Agreement shall
include only manufacturing equipment of the type(s) described on
Schedule 1 hereto and as may be specifically approved by Obligee, LC
Issuer and Lender prior to transfer. For each item of equipment all
rights and interests in which are to be transferred by Obligor to
Obligee, Obligor shall submit to Obligee, Owner Participant, LC Issuer
and Lender in accordance with Section 10.4 hereof at least ten (10) days
prior to the Funding Date therefor, a copy of the invoice or invoices
issued by the person from whom Obligor acquired the Item of
Equipment and a Certificate of Costs, in each case identifying the type
of equipment, model, serial or other identification number and the date
of delivery to Obligor. So long as no Equipment Agreement Default or
Equipment Agreement Event of Default has occurred and is continuing
and so long as such item of equipment is reasonably acceptable to
Obligee, LC Issuer and Lender and copies of such invoices and
Certificate of Costs have been delivered to Obligee,
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Owner Participant, LC Issuer and Lender in accordance with this
Section 4.2, Obligee shall finance such item equipment on the next
Funding Date. Each of Obligee, Lender and LC Issuer shall
acknowledge its acceptance or rejection of each item of equipment so
offered for transfer by Obligor to Obligee by executing and delivering to
Obligor within five (5) Business Days of receipt by Obligee, LC Issuer,
Lender and Security Trustee of the invoice or invoices and the
Certificate of Costs for such Item of Equipment in accordance with this
Section 4.2 the acknowledgment of acceptance or the notice of rejection
on the Certificate of Costs for such Item of Equipment.
4.3. Equipment Agreement Supplements. Upon the transfer of an item
of equipment in accordance with Section 4.2 hereof, Obligor shall
execute and deliver to Obligee an Equipment Agreement Supplement
(in the form of Exhibit B to the Equipment Agreement) for such item of
equipment which Equipment Agreement Supplement shall be executed
by Obligee. Obligor agrees that it will not execute an Equipment
Agreement Supplement regarding such item of equipment unless and
until the same shall have been inspected by Obligor and Obligor shall
have determined that the same is in good working order and condition,
it being understood, however, that nothing herein is intended to relieve
or decrease in any way the responsibility of the manufacturer or vendor
of any item of equipment for any warranties with respect to such
equipment. Upon such acceptance, such item of equipment shall
automatically become in accordance with this Section 4.3 of this
Agreement subject to the Equipment Agreement and an "Item of
Equipment" thereunder.
4.4. Rights in Equipment. Upon the execution and delivery by Obligor
of an Equipment Agreement Supplement relating to an Item of
Equipment and satisfaction of the other conditions precedent set forth in
Section 3.1 hereof, Obligee shall have all rights and interests in such
Item of Equipment and shall be obligated to pay Obligor in full for the
Acquisition Cost of such Item of Equipment in accordance with the
provisions of this Agreement; provided, that nothing in this Section 4.4
shall affect in any manner the respective rights and obligations of
Obligee and Obligor under the Equipment Agreement or shall reduce or
diminish any claim or remedy for damages which Obligee might assert
for any breach or violation of the terms of the Equipment Agreement or
of this Agreement. Obligor hereby transfers, grants, sells, and assigns
to Obligee, its successors and assigns, all of Obligor's rights and interest
in and to the various agreements, contracts, warranties, purchase orders
and requisitions relating to the purchase, procurement, design and
assembly of each Item of Equipment. Notwithstanding the foregoing
assignment, Obligee shall not be deemed to have assumed any liability
to any equipment vendor by virtue of this Agreement, Obligee's only
obligation with respect to any Item of Equipment hereunder being to
finance such Item in accordance with the terms of the Operative
Documents.
4.5. Funding Dates. From time to time, but no more frequently than two
times in any Acquisition Period, and in any event no later than the last
date of the Acquisition Period then in effect, Obligor may request
payment by Obligee of amounts owed by Obligee to Obligor in
connection with the transfer of Items of Equipment accepted under the
Equipment Agreement in accordance with the terms hereof and thereof.
Obligor shall send to Obligee, Owner Participant, LC Issuer and Lender,
so as to be received by Obligee, Owner Participant, LC Issuer and
Lender at least ten (10) Business Days prior to the date proposed for
such payment or reimbursement by Obligee, which date shall be a
Business Day mutually agreeable to Obligor, Obligee, Owner
Participant and Lender (each such date, a "Funding Date"), a statement
showing
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the aggregate amounts to be paid by Obligee to Obligor on the
applicable Funding Date (each such statement, a "Funding Notice").
Each Funding Notice shall request payment in an amount at least equal
to $10,000,000 (except for the final Funding Notice which shall request
payment in an amount at least equal to $5,000,000), shall specify the
proposed Funding Date. Obligor may request payment of Acquisition
Costs in an aggregate amount not to exceed the excess of the Maximum
Acquisition Cost over the aggregate Acquisition Costs of all Items of
Equipment previously financed by Obligee. Obligor represents and
agrees that all payments for which reimbursement will be so requested
will represent amounts which have been incurred or paid by Obligor and
for which it has not received and will not receive any commission,
allowance, rebate or other profit. If the closing of a payment of
Acquisition Costs occurs on or before 2:00 p.m. (New York time) on a
Business Day, Obligee shall make available to Obligor on the same
Business Day the amount of Acquisition Costs to be paid or reimbursed
in immediately available funds. If such closing occurs after 2:00 p.m.
(New York time) on a Business Day Obligee shall make available to
Obligor on the next succeeding Business Day the amount of the
Acquisition Costs to be reimbursed or paid in immediately available
funds. Payment of amounts on account of the Acquisition Cost of Items
of Equipment shall be made by wire transfer to the account of Obligor at
Chase Manhattan Bank, New York, New York ABA No ▇▇▇▇▇▇▇▇▇,
Account No. 141024946, or such other bank or account maintained in
the United States as Obligor shall designate in writing to Obligee and
Owner Participant no later than 11:00 a.m. (New York time) on the
Business Day preceding the Funding Date.
5. Amount and Terms of Loan.
5.1 Lender Commitment. Subject to and upon the terms and conditions
herein set forth, during each Acquisition Period, Lender agrees to make
multiple, non-revolving loans to Obligee in an aggregate principal
amount up to the amount of the Commitment (each such advance, a
"Loan").
5.2 Payment to Obligee. The closing of each Loan shall occur on a
Funding Date. If the closing of a Loan occurs on or before 2:00 p.m.
(New York time), Lender shall make available to Obligee on the same
Business Day the amount of the Loan in immediately available funds.
If such closing occurs after 2:00 p.m. (New York time), Lender shall
make available to Obligee on the next succeeding Business Day the
amount of the Loan in immediately available funds. Amounts advanced
by Lender hereunder shall be made by wire transfer on behalf of
Obligee to the account of ▇▇▇▇▇▇ International Industries, Inc. at Chase
Manhattan Bank, New York, New York, ABA No. ▇▇▇▇▇▇▇▇▇, Account
No. 141024946, or such other bank or account maintained in the United
States as Obligee shall designate in writing to Lender no later than
11:00 a.m. (New York) time on the Business Day preceding the
Funding Date.
5.3 Note. Each Loan made by Lender shall be evidenced by a
promissory note of Obligee in substantially the form of Exhibit D hereto
with blanks and Payment and Amortization Schedule appropriately
completed in conformity herewith (the "Note").
5.4. Termination of Commitment. If the conditions to the obligations of
Lender specified in Section 3 hereof have not been fulfilled or waived
by it on or before the last day of the last Acquisition Period, Lender may
thereupon elect to be relieved of all further obligations under this
Agreement. Nothing in this Section 5.4 shall operate to relieve Obligee
or
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Obligor from their respective obligations hereunder and under the other
Operative Documents or to waive any of Lender's rights against
Obligee or Obligor.
5.5 Payments.
5.5.1 Principal. Unless otherwise adjusted in accordance with Section
5.9 hereof principal on each Loan shall be payable to Lender on each
Payment Date in an amount equal to the amount specified for such date
on the Payment and Amortization Schedule attached to the Related
Note.
5.5.2 Interest. Obligee agrees to pay to Lender interest in respect of the
unpaid principal amount of each Loan from the date the proceeds
thereof are made available to Obligee until the date on which such Loan
(together with accrued and unpaid interest thereon) is repaid in full
(whether on the Maturity Date, by acceleration or otherwise) at the
Applicable Debt Rate (calculated on the basis of a 360-day year and
actual days elapsed). Accrued (and theretofore unpaid) interest shall be
payable in arrears, on each Payment Date, on the date of any
prepayment (on the amount prepaid), on the Maturity Date and, after the
Maturity Date, on demand.
5.5.3 Commitment Fee. Obligee hereby agrees to pay Lender as a
commitment fee ("Loan Commitment Fee") during each Commitment
Period, which fee shall be computed at the applicable Commitment Fee
Rate per annum on the average daily amount of the Lender Available
Commitment. Such Loan Commitment Fee shall be payable quarterly
in arrears on each Payment Date during each Commitment Period and
on the last day of each Commitment Period.
5.5.4 Overdue Rate. Obligee shall pay to Lender interest on any part of
the principal amount of any Note, if any, and interest on the Note and
any other amount payable by Obligee hereunder which shall not be paid
in full when due (whether at stated maturity, by acceleration or
otherwise) on demand for the period commencing on the due date
thereof until the same is paid in full at the Overdue Rate.
5.5.5 Payment Instructions. All payments to Lender hereunder or under
the other Operative Documents shall be made without defense, set-off or
counterclaim to Security Trustee no later than 12:00 noon (New York
time) on the date when due and shall be made in lawful money of the
United States of America in immediately available funds to the account
of Security Trustee maintained at Commerzbank AG, New York
Branch, ABA No. ▇▇▇▇▇▇▇▇▇, Account No. 150 10 17 10200, reference:
Four Winds Funding Corporation/Harman or such other account as
Lender may designate in a written notice to Obligee.
5.5.6 Withholding Tax. If any amount of principal or interest payable
with respect to the Loan becomes subject to any withholding Tax under
Applicable Laws, Obligee shall withhold such Tax and shall pay to
Lender such additional amounts so that the net amount actually received
by Lender, after reduction for such withholding Tax, shall be equal on
an After-Tax Basis to the full amount of principal and interest otherwise
due and payable hereunder; provided, however, that, notwithstanding
the foregoing, Obligee shall be required to pay such additional amounts
only if and to the extent that (a) Obligor is required to indemnify
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Lender for such withholding amounts under Section 8.2 hereof and (b)
Obligor has not paid such amounts within three days after notice of
nonpayment; provided further, that Obligee shall, upon such payment to
Lender, be subrogated to the rights of Lender in respect thereof
following payment in full to Lender of all amounts due and owing to it
under Section 8.2 hereof.
5.5.7 Business Day Convention. Unless otherwise provided herein, any
payment or prepayment of amounts due in accordance with the terms
hereof which is due on a date which is not a Business Day shall be
payable on the next succeeding Business Day.
5.5.8 Increased Costs. In the event any Affected Person shall have
reasonably determined that any Regulatory Change (as hereinafter
defined) shall (a) subject such Affected Person to any tax of any kind
whatsoever as a result of this Agreement or any Operative Document or
its interest therein or as a result of its commitments hereunder or
thereunder or its liquidity or other commitment to Obligee or Lender as
a result of this Agreement or any Operative Document or its interest
therein (any such commitment or commitments, individually or
collectively, an "Affected Person Commitment"), or change the basis of
taxation of payments as a result thereof (except for Taxes for which
Obligor indemnifies Lender under Section 8.2 hereof); or (b) impose,
modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities
in or for the account of, advances under this Agreement or any
Operative Documents, loans or other extensions of credit by, or any
other acquisition of funds by, such Affected Person, and the result of
any of the foregoing is to increase the cost to such Affected Person, by
an amount which such Affected Person reasonably determines in good
faith to be material, of maintaining its interest in this Agreement, the
Notes or any Operative Document or its Affected Person Commitment
or to reduce any amount receivable in respect thereof, then in any such
case, after submission by such Affected Person to Obligee of a written
request therefor Obligee shall pay to such Affected Person any
additional amounts necessary to compensate such Affected Person for
such increased cost or reduced amount receivable, together with interest
on each such amount from the day which is five (5) Business Days after
the date such request for compensation under this Section 5.5.8 is
received by the Obligee until payment in full thereof (after as well as
before judgment) at the Applicable Debt Rate in effect from time to
time. In the event that any Affected Person shall have determined that
any Regulatory Change regarding capital adequacy has the effect of
reducing the rate of return on such Affected Person's capital or on the
capital of any entity controlling such Affected Person as a result of its
obligations hereunder or under any liquidity or credit support agreement
or under any Operative Document or its maintenance of its Affected
Person Commitment or its interest in this Agreement, the Notes or any
Operative Document to a level below that which such Affected Person
or such entity could have achieved but for such Regulatory Change
(taking into consideration such Affected Person's or such entity's
policies with respect to capital adequacy) by an amount reasonably
determined in good faith by such Affected Person to be material, then,
from time to time, after submission by such Affected Person to Obligee
of such written request therefor, Obligee shall pay to such Affected
Person such additional amount or amounts as will compensate such
Affected Person for such reduction, together with interest on each such
amount from the day which is five (5) Business Days after the date such
request for compensation under this Section (b) is received by Obligor
until payment in full thereof (after as well as before judgment) at the
Applicable Debt Rate in effect from time to time. It shall be a condition
to the right of an Affected Person to receive any compensation under
this Section 5.5.8 that it use its reasonable efforts to reduce or eliminate
any claim for such
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compensation, including but not limited to designating a different
investing office for its interest in this Agreement, the Notes or the
Operative Documents, if such designation will avoid the need for, or
reduce the amount of any increased amounts referred to in this Section
5.5.8 and will not in the reasonable opinion of such Affected Person, be
unlawful or otherwise disadvantageous to such Affected Person or
inconsistent with its policies or result in an unreimbursed cost or
expense to such Affected Person or in an increase in the aggregate
amounts payable under this Section 5.5.8. Each Affected Person
claiming any increased amounts described in this Section 5.5.8 will
furnish to Obligee and Agent together with its request for compensation
a certificate prepared in good faith setting forth the basis and the
calculation of the amount (in reasonable detail) of each request by such
Affected Person for any such increased amounts referred to in this
Section 5.5.8. Failure on the part of any Affected Person to demand
compensation for any amount pursuant to this Section 5.5.8 with respect
to any period shall not constitute a waiver of such Affected Person's
right to demand compensation with respect to such period. For
purposes of this Section 5.5.8, "Regulatory Change" shall mean as to
each Affected Person, any change occurring after the date of the
execution and delivery of this Agreement in any (or the adoption after
such date of any new) (a) United States Federal or state law or foreign
law applicable to such Affected Person; or (b) regulation, interpretation,
directive, guideline or request (whether or not having the force of law)
applicable to such Affected Person of any court or other judicial
authority, or any entity which is exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to the
government of any nation or any state or other political subdivision
thereof and which is charged with the interpretation or administration of
any law referred to in clause (a) or of any fiscal, monetary or other
authority or central bank having jurisdiction over such Affected Person.
5.5.9 Illegality. Notwithstanding any other provision of this Agreement
or the other Operative Documents to the contrary, if it becomes
unlawful or contrary to an official directive of a Governmental Entity,
any Applicable Law, or any interpretation, directive or request or
change therein, or change in the administration or enforcement thereof
after the date hereof for Lender or any Liquidity Provider to honor any
obligation to make, to maintain or to participate in any Loan funded by
Dollar borrowings on the London interbank market or if for any reason
Lender or any Liquidity Provider is unable to borrow Dollars on the
London interbank market (in either case, an "Illegality Event", and any
Loan affected thereby, an "Illegal Loan") then (a) Lender shall
promptly notify Agent and Obligee thereof, (b) if such Illegality Event
can be avoided without incurring any consequences which are, in the
sole judgment of Lender or such Liquidity Provider, adverse to Lender
or such Liquidity Provider, then Lender or such Liquidity Provider shall
make reasonable, good faith efforts consistent with its internal policy to
effect such avoidance, (c) if, notwithstanding Lender's or such Liquidity
Provider's efforts in accordance with clause (b) hereof, any Loan
remains an Illegal Loan, then, at the time specified for such in the notice
given in accordance with clause (a) above, the interest rate on any such
Illegal Loan shall be automatically converted to the Alternate Rate and
(d) all Loans made after such Illegality Event other than Loans bearing
interest at the Commercial Paper Rate shall accrue interest at the
Alternate Rate. Obligee shall compensate Lender and any Liquidity
Provider, upon Lender's or such Liquidity Provider's written request,
for all reasonable losses, expenses and liabilities incurred which Lender
or such Liquidity Provider may sustain as a result of the conversion or
any payment of any Illegal Loan on a date other than a Payment Date.
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5.6. Prepayments Limited. No prepayment of the Loan may be made
except to the extent and in the manner expressly permitted by this
Agreement.
5.7. Mandatory Prepayments.
5.7.1 Event of Loss. In the event an Item of Equipment shall suffer an
Event of Loss, then on the Casualty Payment Loss Value Date for such
Item Obligee shall prepay and apply, and there shall become due and
payable on the Casualty Loss Value Payment Date for such Item, a
principal amount of the Loan equal to the Unamortized Debt Balance
with respect to such Item of Equipment and all accrued and unpaid
interest thereon.
5.7.2 Transfer of Rights and Interests in Items of Equipment. In the
event that Obligor exercises its option to acquire rights and interests in
an Item of Equipment pursuant to Section 25.2 of the Equipment
Agreement, on the Termination Date for such Item of Equipment,
Obligee shall prepay and apply, and there shall become due and
payable, a principal amount of the Loan equal to the Unamortized Debt
Balance with respect to such Items of Equipment and all accrued and
unpaid interest thereon.
5.7.3 Other Termination of Equipment Agreement. In the event that
Obligor does not exercise any option to renew the Equipment
Agreement with respect to any Item of Equipment pursuant to
Section 25.1 thereof or does not exercise on the Termination Date for
such Item of Equipment the option to transfer such Item of Equipment
pursuant to Section 25.2 of the Equipment Agreement, then on the
Termination Date for such Item of Equipment Obligee shall prepay and
apply, and there shall become due and payable, the Unamortized Debt
Balance of the Loan with respect to such Item of Equipment and all
accrued and unpaid interest thereon.
5.8. Application of Prepayments. The amount of any prepayment shall
be applied first, to the payment of accrued but unpaid interest on all
Loans at the Overdue Rate if any, to the date of such payment then due
hereunder, second, to the payment of accrued but unpaid interest on all
Loans at the Applicable Debt Rate, if any, to the date of such
prepayment then due hereunder, third, to the payment of any other
amounts due Lender under the Operative Documents, fourth to the
payment of the entire outstanding principal amount of the Related Note
and fifth to the payment of the entire outstanding principal amount of
any other Loan.
5.9. Recalculation of Loan Payment and Amortization Schedule. Upon
any partial prepayment in accordance with this Section 5, the amount of
principal due in accordance with the Payment and Amortization
Schedule attached to any Note or Notes against which principal amounts
were prepaid, shall be recalculated on each Payment Date occurring
after the date of such partial payment so as to equal the following:
(1.0 - PP/ OP) x SP
Where:
PP = Principal amount of such Loan being prepaid
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OP = Outstanding principal balance of such Loan immediately prior to
the payment of the principal being prepaid (excluding, however, any
principal scheduled to be paid on the date principal is being prepaid)
SP = Amount of scheduled principal payment for such Loan had the
principal prepayment at issue not been paid
5.10. Loan Events of Default. The occurrence of any of the following
specified events (whatever the reason for such Loan Event of Default
and whether such event shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall constitute
a "Loan Event of Default":
(a) an Equipment Agreement Event of Default shall have occurred and
be continuing; or
(b) Obligee shall default in the due and punctual payment of any
principal of or interest on, the Loan (including any mandatory
prepayment) or any other amount to be paid to Lender under the Loan
Documents; provided, however, that if any such amount is paid after the
due date thereof, it shall only be deemed to be paid in full if there shall
also be paid, together with such amount, interest on such amount at the
Overdue Rate from the date such payment was due until the date of
payment; or
(c) Obligee shall default in the due performance or observance of any of
its other obligations hereunder, or Owner Participant shall breach any of
its obligations under this Agreement or the Trust Agreement, and in
each case the same shall continue unremedied for a period of 30 days
from the earlier of actual knowledge thereof by Obligee and receipt by
Obligee of written notice of such default; or
(d) any representation, warranty or statement made by Obligee, Trust
Company or Owner Participant in any of the Operative Documents, or
otherwise in writing in connection herewith or therewith, or in any
statement furnished pursuant hereto or thereto or in connection herewith
or therewith, shall be breached or shall prove to be untrue in any
material respect on the date as of which made; or
(e) judgments for the payment of money in excess of $100,000 in the
aggregate shall be rendered against Obligee and shall not be satisfied,
stayed, bonded with a reputable and financially sound surety company
to the full extent thereof, vacated or discharged for more than 60 days;
or
(f) (i) Obligee, Trust Company or Owner Participant shall consent to the
appointment of or the taking of possession by a receiver, agent or
liquidator of itself or of a substantial part of its property, or Obligee,
Trust Company or Owner Participant shall admit in writing its inability
to pay its debts generally as they become due, or does not pay its debts
generally as they become due or shall make a general assignment for the
benefit of creditors, or Obligee, Trust Company or Owner Participant
shall file a voluntary petition in bankruptcy or a voluntary petition or an
answer seeking reorganization, liquidation or other relief in a case under
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any bankruptcy laws or other insolvency laws (as in effect at such time)
or an answer admitting the material allegations of a petition filed against
it, or Obligee, Trust Company or Owner Participant shall seek relief by
voluntary petition, answer or consent, under the provisions of any other
bankruptcy or other similar law providing for the reorganization or
winding-up of corporations (as in effect at such time) or Obligee, Trust
Company or Owner Participant shall seek an agreement, composition,
extension or adjustment with its creditors under such laws, or Obligee,
Trust Company or Owner Participant shall adopt a resolution
authorizing action in furtherance of any of the foregoing; or (ii) an
order, judgment or decree shall be entered by any court of competent
jurisdiction (A) appointing, without the consent of Obligee, Trust
Company or Owner Participant, a receiver, trustee or liquidator of such
person or of any substantial part of its property, or (B) sequestering any
substantial part of the property of Obligee, Trust Company or Owner
Participant, or (C) granting any other relief in respect of Obligee, Trust
Company, or Owner Participant as a debtor under any bankruptcy laws
or other insolvency laws (as in effect at such time), and in each case any
such order, judgment or decree of appointment or sequestration shall
remain in force undismissed, unstayed and unvacated for a period of 60
days after the date of entry thereof; or (iii) a petition against Obligee,
Trust Company or Owner Participant in a case under any bankruptcy
laws or other insolvency laws (as in effect at such time) is filed and not
withdrawn or dismissed within 60 days thereafter, or if, under the
provisions of any law providing for reorganization or winding-up of
corporations which may apply to Obligee, Trust Company or Owner
Participant, any court of competent jurisdiction assumes jurisdiction,
custody or control of such person or of any substantial part of its
property and such jurisdiction, custody or control remains in force
unrelinquished, unstayed and unterminated for a period of 60 days; or
(g) Obligee shall default in any of its obligations under any other
Operative Document or any Operative Document shall cease to be in
full force and effect or be disaffirmed or repudiated in any respect by or
on behalf of Obligee or any party thereto (other than Lender); or
(h) if this Agreement at any time shall not be in full force and effect or
shall no longer create a first and prior Lien on any portion of the
Collateral, or
(i) the trust created pursuant to the Trust Agreement shall have been
terminated.
5.11. Remedies of Lender.
5.11.1 Rights in Collateral. If a Loan Event of Default shall have
occurred and be continuing, then and in every such case Lender and
Security Trustee may exercise any or all of the rights and powers and
pursue any and all of the remedies pursuant to this Section 5.11, any and
all remedies under the other Security Documents, and any and all
remedies available to a secured party under the UCC or any other
provision or law and, in the event such Loan Event of Default is a Loan
Event of Default referred to in Section 5.10(a) hereof, any and all of the
remedies pursuant to the Equipment Agreement, and may take
possession of all or any part of the Collateral and may exclude Obligee,
Obligor, any lessee and all Persons claiming under any of them wholly
or partly therefrom.
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5.11.2 Insolvency. If a Loan Event of Default referred to in clause (f) of
Section 5.10 hereof shall have occurred or an Equipment Agreement
Event of Default of the type referred to in clause (e) of Section 20 of the
Equipment Agreement thereof shall have occurred, then and in every
such case the unpaid principal of each Loan, together with interest
accrued but unpaid thereon, Prepayment Premium, if any, and all other
amounts due to Lender shall, unless Lender shall otherwise direct,
immediately and without further act become due and payable by
Obligee to Lender, without presentment, demand, protest or notice, all
of which are hereby waived. If any other Loan Event of Default shall
have occurred and be continuing, then and in every such case, Lender
may, by written notice or notice to Obligee, declare all Loans to be due
and payable, whereupon the unpaid principal of the Loans then
outstanding, together with accrued but unpaid interest thereon,
Prepayment Premium, if any, and all other amounts due from Obligee to
Lender, shall immediately and without further act become due and
payable by Obligee to Lender without presentment, demand, protest or
other notice, all of which are hereby waived.
5.11.3 Delivery of Documents. Upon the occurrence of a Loan Event of
Default, at the request of Security Trustee, Obligee shall promptly
execute and deliver to Security Trustee such instruments of title and
other documents as Security Trustee may deem necessary or advisable
to enable Security Trustee or a representative designated by Security
Trustee, at such time or times and place or places as Security Trustee
may specify, to obtain possession of all or any part of the Collateral to
whose possession Security Trustee shall at the time be entitled
hereunder. If Obligee shall for any reason fail to execute and deliver
such instruments and documents after the request by Security Trustee,
Security Trustee may (a) obtain a judgment conferring on Security
Trustee the right to immediate possession and requiring Obligee to
execute and deliver such instruments and documents to Security
Trustee, to the entry of which judgment Obligee hereby specifically
consents, and (b) pursue all or part of such Collateral wherever it may
be found and may enter any of the premises of Obligor or Obligee
wherever such Collateral may be or is purported to be and search for
such Collateral and take possession of and remove such Collateral. All
expenses of obtaining such judgment or of pursuing, searching for and
taking such property shall, until paid, be secured by the Lien of this
Agreement.
5.11.4 Possession of Collateral. Upon taking of possession pursuant
hereto, Security Trustee or a representative designated by Security
Trustee may, from time to time, at the expense of Obligee, make all
such expenditures for maintenance, insurance, repairs, replacements and
alterations to any of the Collateral, as it may deem appropriate and
commercially reasonable. In such case, Security Trustee or a
representative of Security Trustee shall have the right (but not the
obligation) to maintain, use, operate, store, lease, control or manage the
Collateral and to carry on the business and to exercise all rights and
powers of Obligee relating to the Collateral, as Security Trustee shall
deem best, including the right to enter into any and all such agreements
with respect to the maintenance, use, operation, storage, leasing, control,
management or disposition of the Collateral or any part thereof as
Security Trustee may determine; and Security Trustee shall be entitled
to collect and receive directly all tolls, rents (including Equipment
Payment and Supplemental Payments), revenues, issues, income,
products and profits of the Collateral and every part thereof, without
prejudice, however, to the right of Lender or Security Trustee under any
provision of this Agreement to collect and receive all cash held by, or
required to be deposited with, Obligee hereunder. Such tolls, rents
(including Rental and Supplemental Payments), revenues, issues,
income, products and profits shall be applied to pay the expenses of the
use, operation, storage, leasing, control, management or disposition of
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the Collateral and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions and
improvements, and to make all payments which Security Trustee may
be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Collateral or any part thereof
(including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of
Obligee or Obligor), and all other payments which Security Trustee may
be required or authorized to make under any provision of this
Agreement, as well as just and reasonable compensation for the services
of Security Trustee, and of all Persons properly engaged and employed
by Security Trustee.
5.11.5 Sale of Collateral. In addition, Security Trustee may sell, assign,
transfer and deliver the whole, or from time to time to the extent
permitted by law, any part of the Collateral or any interest therein, at
any private sale or public auction with or without demand,
advertisement or notice (except as herein required or as may be required
by law) of the date, time and place of sale and any adjustment thereof
for cash or credit or other property for immediate or future delivery and
for such price or prices and on such terms as Security Trustee may
determine, or as may be required by law. It is agreed that ten (10)
Business Days' notice to Obligee of the date, time and place (and terms,
in the case of a private sale) of any proposed sale by Security Trustee of
the Collateral or any part thereof or interest therein is reasonable. Each
of Security Trustee and Lender may be a purchaser of the Collateral or
any part thereof or any interest therein at any sale thereof, whether
pursuant to foreclosure or power of sale or otherwise. Security Trustee
may apply against the purchase price therefor the amount then due
under the Notes secured hereby. Security Trustee shall, upon any such
purchase, acquire good title to the property so purchased, to the extent
permitted by applicable law, free of all rights of redemption.
5.11.6 Discharge. Upon any sale of the Collateral or any part thereof or
interest therein, whether pursuant to foreclosure or power of sale or
otherwise, the receipt of the purchase money of the official making the
sale by judicial proceeding or by Security Trustee shall be sufficient
discharge to the purchaser for the purchase money and neither such
official nor such purchaser shall be obliged to see to the application
thereof.
5.11.7 Appointment of Receiver. If a Loan Event of Default shall have
occurred and be continuing, Security Trustee shall, as a matter of right,
be entitled to appoint a receiver or trustee or representative (who may be
Security Trustee or any successor or nominee thereof, or any Lender
appointed by Security Trustee) for all or any part of the Collateral,
whether such receivership or agency or representation be incidental to a
proposed sale of the Collateral or the taking of possession thereof, the
exercise of remedies under this Agreement or the Equipment Agreement
or otherwise, and Obligee hereby consents to the appointment of such a
receiver, trustee or representative. Any receiver, trustee or
representative appointed for all or any part of the Collateral shall be
entitled to exercise all rights of Security Trustee under this Agreement
and the other Operative Documents to the extent provided in such
appointment and shall be entitled to exercise all the powers and pursue
all the remedies of Security Trustee hereunder with respect to the
Collateral.
5.11.8 Redemption. Any sale of the Collateral or any part thereof or
any interest therein, whether pursuant to foreclosure or power of sale or
otherwise hereunder, shall forever be a perpetual bar against Obligee,
after the expiration of the period, if any, during which
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Obligee shall have the benefit of redemption laws which may not be
waived pursuant to clause (i) above. Subject to the provisions of this
Agreement, Obligee 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 or extension law wherever enacted, nor at any time
hereafter in force, in order to prevent or hinder the enforcement of this
Agreement or the execution of any power granted herein to Lender or
Security Trustee, or the absolute sale of the Collateral, or any part
thereof, or the possession thereof by any transfer at any sale under this
Section 5.11; and Obligee for itself and all who may claim under it, so
far as it or any of them now or thereafter lawfully do so, waives all right
to have the Collateral marshaled upon any foreclosure hereof, and
agrees that any court having jurisdiction to foreclose this Agreement
may order the sale of the Collateral as an entirety.
5.11.9 Rights Cumulative; No Waiver. Each and every right, power and
remedy herein given to Lender and Security Trustee specifically or
otherwise in this Agreement shall be cumulative and shall be in addition
to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in equity or by statute, and each and every
right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such
order as may be deemed expedient by Lender or Security Trustee, and
the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same
time or thereafter any other right, power or remedy. No delay or
omission by Lender or Security Trustee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any
such right, power or remedy or be construed to be a waiver of any
default on the part of Obligee or Obligor or to be an acquiescence
therein.
5.11.10 Termination of Proceedings. If Lender or Security Trustee shall
have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason
or shall have been determined adversely to Lender or Security Trustee,
then and in every such case Obligee, Lender, Security Trustee and
Obligor shall, subject to any binding determination in such proceeding,
be restored to their former positions and rights hereunder with respect to
the Collateral, and all rights, remedies and powers of Lender and
Security Trustee shall continue as if no such proceedings had been
instituted.
6. Covenants.
6.1. Obligee Covenants. Obligee covenants and agrees for the benefit of
Lender (unless Lender shall have otherwise waived in writing
compliance herewith) during the term of this Agreement as follows:
(a) the proceeds of each Loan shall be used solely to finance Obligee's
acquisitions of Items of Equipment in accordance with the terms of this
Agreement and for costs related to such transactions;
(b) it shall comply with all Applicable Laws, rules, regulations and
orders of any jurisdiction, such compliance to include paying when due
all Taxes imposed upon it or upon
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its property by any Government Entity except to the extent contested in
good faith and for which adequate reserves have been segregated;
(c) it shall promptly take, and maintain the effectiveness of, all action of
the type referred to in clause (d) of Section 2.3 or otherwise that may,
from time to time, be necessary or appropriate under Applicable Law in
connection with the performance by Obligee of its obligations under the
Operative Documents, or the taking of any action hereby or thereby
contemplated, or necessary for the legality, validity, binding effect or
enforceability of the Operative Documents, or for the making of any
payment or the transfer or remittance of any funds by Obligee under the
Operative Documents;
(d) it shall furnish to Lender or cause to be furnished to Lender, as the
case may be (i) the documents, certificates and financial statements to
be provided by Obligor pursuant to Section 6.6 hereof, at the times set
forth therein; (ii) such other information regarding the condition or
operations, financial or otherwise, of Obligor or the Collateral as Lender
may from time to time reasonably request and which Obligor is
obligated to provide to Obligee under the terms of the Equipment
Agreement; (iii) upon notice thereof, notice of the existence of any
Equipment Agreement Default or Equipment Agreement Event of
Default; (iv) promptly upon receipt, copies of all notices, lists or other
written information received by Obligee from Obligor pursuant to the
Equipment Agreement; and (v) promptly upon receipt by Obligee,
copies of all notices, communications documents and agreements
relating to the Collateral;
(e) it shall allow or cause to allow any person acting on behalf of Lender
or Security Trustee (i) to visit and inspect the Equipment, to visit,
inspect and examine the books and records and accounts of Obligor and
to discuss with Obligor its affairs, finances and accounts and (ii) to visit,
inspect and examine its books of record and accounts of Obligee and to
discuss with Obligee its affairs, finances and accounts, in each case at
such times and as often as Lender may reasonably request;
(f) it shall duly pay and discharge (i) all Liens other than Permitted
Liens, (ii) all of its trade bills before the time that any Lien attaches and
(iii) all Taxes imposed upon or against it or its property or assets, or
upon any property leased by it, prior to the date on which penalties
attach thereto and (iv) all lawful claims, whether for labor, materials,
supplies, services or anything else, which might or could, if unpaid,
become a Lien upon such property or assets, unless and only to the
extent that any such amounts are not yet due and payable or the validity
thereof is being contested in good faith by appropriate proceedings so
long as such proceedings do not involve any material danger of the sale,
forfeiture or loss of the Items of Equipment or any interest therein and
Obligee maintains appropriate reserves with respect thereto or has made
adequate provision for the payment thereof, in accordance with
generally accepted accounting principles and approved by Lender;
(g) it shall keep at all times books of record and account in which full,
true and correct entries will be made of all dealings or transactions in
relation to its business and affairs, and provide or cause to be provided
adequate protection against loss or damage to such books of record and
account;
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(h) it shall not except as expressly permitted by the Equipment
Agreement and under this Agreement, sell, lease, convey, transfer or
encumber or otherwise dispose of all or any part of any Item of
Equipment, or cause or permit any Person to do any of the foregoing
with respect to all or any part of any Item of Equipment;
(i) it shall not amend, modify, consent to any change to the terms or
otherwise alter any of the Operative Documents in any manner without
the consent of Lender and Security Trustee;
(j) it shall not operate in a manner that would result in an actual,
constructive or substantive consolidation with Owner Participant, or any
other Person, and in such connection Obligee shall observe all trust
formalities, maintain records separately and independently from those of
Owner Participant or other Person and enter into any transactions with
Owner Participant only on an arm's-length contractual basis;
(k) it shall not waive an Equipment Agreement Default or Equipment
Agreement Event of Default or breach any of its obligations under the
Equipment Agreement without the consent of Lender, and shall enforce
all of its rights under the Equipment Agreement; and
(l) within the six-month period preceding the fifth anniversary of the
Closing Date, Obligee will provide to Lender and Security Trustee
continuation statements with respect to any UCC financing statements
filed in connection with the Security Documents, to file the same, and
promptly upon such filing will provide Lender and Security Trustee
with written evidence thereof.
6.2. Further Obligee Covenants. Obligee covenants for the benefit of
each other party hereto (unless each shall have otherwise waived in
writing compliance herewith) during the term of this Agreement as
follows:
(a) it shall take all actions as are required to keep the representations and
warranties made by it in Section 2.3 hereof (except, in the case of clause
(e) of Section 2.3, if the location of such office shall change, Obligee
shall provide each other party hereto with not less than ten (10) days'
prior written notice of such change), true and correct in all material
respects (but without regard to the date when such representations and
warranties were made or are expressed to be effective) until such time as
all of the obligations secured hereby have been paid in full;
(b) it shall obtain and maintain, or cause to be obtained or maintained,
in full force and effect, any authorization, approval, license, or consent
of any governmental or judicial authority including which may be or
become necessary in order for Lender, Security Trustee, Obligor and
Owner Participant to obtain the full benefits of this Agreement and all
rights and remedies granted or to be granted herein.
(c) it shall not create, assume or suffer to exist any Lien with respect to
the Collateral, except Permitted Liens;
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(d) it shall not (i) enter into any business other than its financing of
Equipment, (ii) create, incur, assume or permit to exist any
Indebtedness, except as expressly permitted by this Agreement, (iii)
enter into, or be a party to, any transaction with any Person, except the
transactions set forth in the Operative Documents and as expressly
permitted thereby, or (iv) make any investment in, guaranty the
obligations of, or make or advance money to any Person, through the
direct or indirect lending of money, holding of securities or otherwise
except the transactions set forth in the Operative Documents and as
expressly permitted thereby; and
(e) it shall not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease
(substantially as a whole), or otherwise dispose of (whether in one or in
a series of transactions) its assets except as expressly permitted by this
Agreement.
6.3. Trust Company Covenants. Trust Company covenants and agrees
for the benefit of each other party hereto (unless each party shall have
otherwise waived in writing compliance herewith) during the term of
this Agreement as follows:
(a) it shall perform all of its obligations set forth in the Trust Agreement
and shall not amend, modify, consent to any change to the terms or
otherwise alter the Trust Agreement in any manner without the consent
of each of the other parties hereto;
(b) it shall not, through its own actions or inactions, interfere in
Obligor's quiet enjoyment of the Items of Equipment during the Term
as long as the Equipment Agreement shall not have been declared in
default pursuant to Section 21 thereof; and
(c) it shall (i) not cause or permit to exist any Lien attributable to it with
respect to the Items of Equipment or any other portion of the Trust
Estate other than Permitted Liens, (ii) promptly, at its own expense, take
such action as may be necessary duly to discharge any Lien attributable
to it, and (iii) make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from any Liens
attributable to it; and
(d) it shall not change the location of its principal office to a location
outside of Hartford, Connecticut without providing at least 30 days
advance written notice thereof.
6.4. Owner Participant Covenants. Owner Participant covenants and
agrees for the benefit of each party hereto (unless each party hereto shall
have otherwise waived in writing compliance herewith) during the term
of this Agreement as follows:
(a) it shall maintain its existence as a corporation in good standing under
the laws of the State of New York;
(b) it shall maintain its right to transact business in each jurisdiction in
which the character of the properties owned or leased by it or the
business conducted by it makes such qualification necessary and the
failure to so qualify would preclude Obligee from enforcing its rights or
meeting its obligations under or with respect to any Operative
Document;
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(c) it shall perform all of its obligations set forth in the Trust Agreement
and shall not amend, modify, consent to any change to the terms or
otherwise alter the Trust Agreement in any manner without the consent
of each of the other parties hereto;
(d) it shall not, through its own actions or inactions, interfere in
Obligor's quiet enjoyment of the Items of Equipment during the Term
as long as the Equipment Agreement shall not have been declared in
default pursuant to Section 21 thereof; and
(e) it shall (i) not cause or permit to exist any Lien attributable to it with
respect to the Items of Equipment or any other portion of the Trust
Estate other than Permitted Liens, (ii) promptly, at its own expense, take
such action as may be necessary duly to discharge any Lien attributable
to it, and (iii) make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from any Liens
attributable to it;
6.5. Lender and Security Trustee Covenant. Each of Lender and
Security Trustee hereby covenants and agrees, for the benefit of Obligee
and Obligor, that so long as no Equipment Agreement Event of Default
has occurred and is continuing, it shall not take or cause to be taken any
action contrary to Obligor's or any permitted lessee's right to quiet
enjoyment of, and the continuing possession, use and operation of, the
Equipment during the Term of the Equipment Agreement.
6.6. Obligor Covenants. Obligor covenants and agrees for the benefit of
each other party hereto (unless each party shall otherwise waive in
writing compliance herewith) during the term of this Agreement as
follows:
(a) it shall furnish Obligee, Owner Participant and Lender (i) as soon as
available, but in any event within 90 days after the end of each fiscal
year of Obligor, a copy of the consolidated balance sheet of Obligor and
its consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on, without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by KPMG, LLC or other independent certified public
accountants of nationally recognized standing, and (ii) as soon as
available, but in any event not later than 45 days after the end of each of
the first three quarterly periods of each fiscal year of Obligor, the
unaudited consolidated statements of income and retained earnings and
of cash flows of Obligor and its consolidated Subsidiaries for such
quarter, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments); all
such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein
and with prior periods (except as approved by such accountants or
officer, as the case may be, disclosed therein).
(b) it shall furnish Obligee, Owner Participant and Lender (i)
concurrently with the delivery of the financial statements referred to in
Section 6.6(a)(i) hereof, a certificate of the independent certified public
accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained
of any Equipment
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Agreement Default or Equipment Agreement Event of Default, except
as specified in such certificate, (ii) concurrently with the delivery of the
financial statements referred to in Sections 6.6(a)(i) and (ii), a certificate
of a Responsible Officer stating that, to the best of such officer's
knowledge, Obligor during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Operative Documents to be
observed, performed or satisfied by it, and that such officer has obtained
no knowledge of any Equipment Agreement Default or Equipment
Agreement Event of Default except as specified in such certificate, (iii)
not later than ten (10) Business Days following approval by the Board
of Directors of Obligor (and in any event at least once in each fiscal
year), a copy of Obligor's final business plan as approved by the
Directors, (iv) within five (5) days after the same are sent, copies of all
financial statements and reports which Obligor sends to its stockholders,
and within five (5) days after the same are filed, copies of all financial
statements and periodic reports which Obligor may make to, or file
with, the Securities and Exchange Commission or any successor or
analogous Governmental Entity, and (v) promptly, such additional
financial and other information as Obligee, Lender or Owner Participant
may from time to time reasonably request (including, but not limited to,
annual consolidating financial statements not later than 150 days after
the end of each fiscal year.); and
(c) within the six-month period preceding the fifth anniversary of the
Closing Date, Obligor will provide to Obligee, Lender and Security
Trustee continuation statements with respect to any UCC financing
statements filed in connection with the Equipment Agreement or this
Agreement, to file the same, and promptly upon such filing will provide
Obligee, Lender and Security Trustee with written evidence thereof. and
(d) within fifteen Business Days of each Funding Date, Obligor shall
deliver to Security Trustee original counterparts of Subsidiary
Equipment Agreements for each of the Subsidiaries in possession of
Equipment on such Funding Date.
6.7. Obligor Negative Covenants. Obligor covenants and agrees for the
benefit of each other party hereto (unless each party shall otherwise
waive in writing compliance herewith) during the term of this
Agreement that it shall comply with the Multi-Currency Negative
Covenants, and such Multi-Currency Negative Covenants (together with
all terms utilized therein) are hereby incorporated by reference as if set
forth herein in their entirety and:
(a) Obligor shall not permit the ratio of Consolidated Total Debt to
Consolidated Capitalization at any time to be greater than 68%;
(b) Obligor shall not permit the EBITDA Ratio for any period of four
consecutive fiscal quarters to be less than 2.25 to 1.0;
(c) Obligor shall not enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, or permit any Restricted Subsidiary to do any of the foregoing,
except (i) any Restricted Subsidiary of Obligor may be merged or
consolidated with or into Obligor (provided that Obligor shall be the
continuing or surviving corporation) or with or into any one or more
wholly-owned Restricted Subsidiaries of Obligor (provided that the
wholly-owned Restricted Subsidiary or Restricted Subsidiaries shall be
the continuing or surviving corporation), (ii) any Restricted Subsidiary
may sell, lease, transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to Obligor or any other
wholly-owned Restricted Subsidiary of Obligor, and (iii)
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Obligor and its Restricted Subsidiaries may consummate the
transactions permitted by subsection 10.5 of the Multi-Currency Credit
Agreement;
6.8. Covenant of Lender, Obligee, Agent and Security Trustee, LC
Issuer, Trust Company and Owner Participant. Each Obligee, Lender,
Agent, Security Trustee, LC Issuer, Trust Company and Owner
Participant that is not a "United States person" as such term is defined
in Code Section 7701(a)(30) shall provide to Obligor at Closing and in
2000 on or before January 15 and at such times as may be necessary
thereafter under Applicable Law as in effect on the Closing Date
(including Treasury regulations promulgated under Section 1441 of the
Code presently scheduled as of the Closing Date to go into effect on
January 1, 2001) and at such other times as shall be reasonably
requested by Obligor, a fully completed Internal Revenue Service Form
4224 or successor form (including an Internal Revenue Service Form
W-8 as specified in Treasury Regulations section 1.1441-4(a) presently
scheduled as of the Closing Date to go into effect on January 1, 2001)
upon which Obligor can rely establishing that all payments to be made
by Obligor to each such Person under the Operative Documents can be
made by Obligor free and clear of any requirement to withhold any
federal income tax therefrom because such payments are effectively
connected with the conduct of a trade or business by such Person in the
United States; provided, however, that each such Person shall not be
required to provide such forms if, solely as a result of a change in
Applicable Law (but not including for this purpose, Treasury
Regulations Section 1.1441-4(a) in the form scheduled as of the Closing
Date to go into effect on January 1, 2001), such Person is not legally
entitled to deliver such form. The only consequence of a breach by any
Lender, Obligee, Agent, Security Trustee, LC Issuer, Trust Company or
Owner Participant of this Section 6.8, shall be that Obligor shall be
entitled to withhold from any payment made by Obligor to such Person
the appropriate amount of federal income tax, notwithstanding the
provisions of the Operative Documents to the contrary and Obligor shall
have no obligation under Section 8.2 for those amounts withheld from
payments to such Person hereunder.
7. Security.
7.1. Security Interest. For valuable consideration, and to secure the due
payment and performance of all principal of, Prepayment Premium, if
any, and interest on the Loans, the Loan Commitment Fee and any
interest due thereon, and all indebtedness and other liabilities and
obligations, whether now existing or hereafter arising (including any
obligations to indemnify, reimburse or pay costs and/or expenses) of
Obligee to Lender arising out of or in any way connected with the
Operative Documents and all instruments, agreements and documents
executed, issued and delivered pursuant thereto (collectively, the
"Secured Obligations"), Obligee hereby assigns, conveys, mortgages,
pledges, hypothecates, transfers and sets over to Security Trustee, and
its successors and assigns, and grants to Security Trustee, and its
successors and assigns, a first Lien on and security interest in the
following property and rights of Obligee, except for Excepted Payments
with respect thereto (collectively, the "Collateral"):
(a) the Items of Equipment;
(b) all right, title and interest of Obligee in and to any Cross Receipt and
all warranties (including, without limitation, warranties of title,
merchantability, fitness for a
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particular purpose, quality and freedom from defects) and rights of
recourse against manufacturers, assemblers, sellers and others in
connection with the Items of Equipment;
(c) all right, title and interest of Obligee in and to, but none of the
obligations of Obligee under, the Equipment Agreement, the Security
Documents and the Subsidiary Equipment Agreements and all
Equipment Payments, Equipment Agreement Commitment Fees and
Supplemental Payments payable under the Equipment Agreement
including installments of Equipment Payment payments and all other
sums payable thereunder;
(d) all accounts, contract rights, general intangibles and all other
property rights of any nature whatsoever arising out of or in connection
with the Equipment Agreement or the Items of Equipment, including,
without limitation, Equipment Payment, Equipment Agreement
Commitment Fees and Supplemental Payments and any other payments
due and to become due under the Equipment Agreement whether as
repayments, reimbursements, contractual obligations, indemnities,
damages or otherwise;
(e) all claims, rights, powers, or privileges and remedies of Obligee, as
Obligee, under the Equipment Agreement;
(f) all rights of Obligee under the Equipment Agreement to make
determinations to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
waiver or approval, together with full power and authority to demand,
receive, enforce, collect or receipt for any of the foregoing or any
property which is the subject of the Equipment Agreement, to enforce or
execute any checks, or other instruments or orders, to file any claims
and to take any action which (in the opinion of Security Trustee) may be
necessary or advisable in connection with any of the foregoing;
provided, however, Security Trustee agrees for the benefit of Obligee
that so long as no Loan Event of Default has occurred and is continuing,
it will not exercise any of the rights assigned to it under clauses (e) and
(f) of this Section 7.1, other than the right to receive amounts due under
the Equipment Agreement, without the prior written consent of Obligee;
(g) all moneys now or hereafter paid or required to be paid to Lender
pursuant to any Operative Document; and
(h) all proceeds of the Collateral including, without limitation, all
rentals, income and profits in respect of the Items of Equipment,
whether under the Equipment Agreement or otherwise, all credits
granted by any manufacturer or vendor with respect to the return of any
Item of Equipment and the proceeds of any insurance payable with
respect to the Items of Equipment.
7.2. Consent and Agreement of Obligor. Obligor hereby consents to the
assignment set forth in Section 7.1 hereof. Obligee and Security
Trustee hereby instruct, and Obligor agrees, that until further notified by
Security Trustee, Obligor shall pay all amounts payable under the
Equipment Agreement other than Excepted Payments to the account of
Security Trustee maintained at Commerzbank AG, New York Branch,
ABA No. ▇▇▇▇▇▇▇▇▇, Account No. 150 10 ▇▇▇▇▇▇▇, reference: Four
Winds Funding Corporation/▇▇▇▇▇▇ or such other account as Security
Trustee may designate in a written notice to Obligor. If there is any
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disagreement between Security Trustee and Obligee as to whether any
amount is an Excepted Payment, Obligor shall abide by Security
Trustee's determination with respect to such amount.
7.3. Further Obligee Covenants. Obligee covenants and agrees with
Security Trustee as follows:
(a) Obligee will faithfully abide by, perform and discharge each and
every obligation, covenant and agreement to be performed by Obligee
under the Operative Documents to which it is a party, and Security
Trustee shall not be responsible for any of such obligations, covenants
or agreements under any circumstances;
(b) at the request of Security Trustee, and at the sole cost and expense of
Obligee, Obligee will use its best efforts to enforce or secure the
performance of each and every obligation, covenant, condition and
agreement contained in the Equipment Agreement to be performed by
Obligor;
(c) Obligee, at the reasonable request of Security Trustee, will appear in
and defend every action or proceeding arising under, growing out of or
in any manner connected with the Equipment Agreement or the
obligations, duties or liabilities thereunder of Obligee and Obligor;
(d) if at any time during a Loan Default or Loan Event of Default
Obligee should receive any amounts payable by Obligor under the
Equipment Agreement or any other proceeds for or with respect to the
Collateral, it will hold such amounts in trust for Security Trustee and
not commingle such amounts with any other amounts belonging to or
held by Obligee, advise Security Trustee of such receipt and promptly
forward such amounts directly to Security Trustee;
(e) upon the occurrence and continuance of any Loan Event of Default,
Obligee will immediately upon receipt of all checks, drafts, cash or
other remittances in payment of any of its accounts, contract rights or
general intangible constituting part of the Collateral, or in payment for
any Collateral sold, transferred, leased or otherwise disposed of, or in
payment or on account of its accounts, contracts, contract rights, notes,
drafts, acceptances, general intangibles, chooses in action and all other
forms of obligation relating to any of the Collateral so sold, transferred
or otherwise disposed of, deliver any such items to Security Trustee
accompanied by a remittance report in form supplied or approved by
Security Trustee, such items to be delivered to Security Trustee in the
same form received, endorsed or otherwise assigned by such Obligee
where necessary to permit collection of items and, regardless of the
form of such endorsement, Obligee hereby waives presentment,
demand, notice of dishonor, protest and notice of protest; and
(f) within the six-month period preceding the fifth anniversary of the
Closing Date, Obligee will provide to and will obtain from Obligor
continuation statements with respect to the UCC financing statements
filed in connection with this Agreement, will file the same pursuant to
Section 10.1 hereof, and promptly upon such filing will provide
Security Trustee with written evidence thereof.
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7.4. Further Assurances. For each Item of Equipment located in the
United States, France, Germany, or England, Obligee will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to
Security Trustee from time to time such confirmatory assignments,
conveyances, financing and continuation statements, transfer
endorsements, powers of attorney, notes, reports and other assurances or
instruments and take such further actions which are appropriate or
advisable to perfect, preserve or protect Security Trustee's security
interest granted hereunder or which Security Trustee deems necessary or
advisable in order to obtain the full benefits of the Liens created or
intended to be created hereunder, and will take such other actions
reasonably requested by Security Trustee to effectuate the intent of the
Operative Documents. To the extent permitted by applicable law,
Obligee authorizes Security Trustee to file any such financing and
continuation statements without the signature of Obligee and Obligee
will pay all applicable filing fees and related expenses.
7.5. Termination. Upon the full and final discharge and satisfaction of
the Loans and the Obligee's obligations to Lender and Security Trustee
under the Operative Documents, the provisions of this Section 7 and all
grants and assignments hereunder shall terminate, and all right, title and
interest of Security Trustee in and to the Equipment Agreement, the
Collateral and the proceeds thereof shall revert to Obligee, provided that
the indemnification provisions hereof shall survive the termination of
this Agreement and, provided, further, that if such discharge and
satisfaction shall be made following the occurrence of a Loan Event of
Default, the foregoing discharge shall be made following satisfaction of
Obligor's obligations under Section 21 of the Equipment Agreement.
Security Trustee shall, at Obligee's expense, execute and deliver any
evidence of such release as Obligee may reasonably require and furnish
to Security Trustee.
7.6. Other Security. To the extent that the obligations of Obligee under
any Operative Document are now or hereafter secured by property other
than the Collateral or by the guarantee, endorsement or property of any
other Person, then Security Trustee shall have the right in its sole
discretion to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting
any of Security Trustee's rights and remedies hereunder.
7.7. Power of Attorney. Obligee irrevocably authorizes Security
Trustee and does hereby make, constitute and appoint Security Trustee
and any officer of Security Trustee, with full power of substitution, as
Obligee's true and lawful attorney-in-fact, with power, in its own name
or in the name of Obligee, to endorse any notes, checks, drafts, money
orders, or other instruments of payment (including payments payable
under or in respect of any policy of insurance) in respect of the
Collateral that may come into possession of Security Trustee; to sign
and endorse any invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications
and notices in connection with accounts, and other documents relating
to the Collateral; to pay or discharge Taxes, Liens, security interests or
other encumbrances at any time levied or placed on or threatened
against the Collateral; to demand, collect, receipt for, compromise,
settle and ▇▇▇ for monies due in respect of the Collateral; and generally,
to do, at Security Trustee's option and at Obligee's expenses, at any
time, or from time to time, all acts and things which Security Trustee
deems necessary to protect, preserve and realize upon the Collateral and
Security Trustee's security interests therein and in order to effect the
intent of the Operative Documents all as fully and effectually as Obligee
might
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or could do; and Obligee hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney
shall be coupled with an interest and irrevocable for the term of this
Agreement and thereafter as long as any of the obligations of Obligee
under any Operative Document shall be outstanding. The powers
conferred on Security Trustee hereunder are solely to protect its interest
in the Collateral and shall not impose any duty upon Security Trustee to
exercise any such powers. Security Trustee shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers and neither it nor any of its officers, directors or employees shall
be responsible to Obligee for any act or failure to act, except for its own
gross negligence or willful misconduct.
7.8. Assignment of Rights. Obligee agrees that the assignments herein
are irrevocable and it will not, while said assignment is in effect or
thereafter until Obligee has received from Security Trustee notice of the
termination thereof, take any action as Obligee under the Equipment
Agreement or otherwise which is inconsistent with this Agreement or
make any other assignment, designation or direction inconsistent
herewith and that any assignment, designation or direction inconsistent
herewith shall be void. Obligee and Security Trustee agree that the
following are, without limitation, rights, powers, privileges, options,
and benefits assigned by Obligee hereunder: the right to make claim for,
receive, collect and receipt for (and to apply the same to the payment of
the principal of, Prepayment Premium, if any, and interest on the Notes)
all rents, income, revenues, issues, profits, insurance proceeds,
condemnation awards, payments of Casualty Loss Value and other sums
payable or receivable under the Equipment Agreement or pursuant
thereto, and to make all waivers and agreements, to give and receive all
notices and other instruments, and to take all action upon the happening
of an Equipment Agreement Event of Default, including the
commencement, conduct and consummation of proceedings at law or in
equity as shall be permitted under any provision of the Equipment
Agreement or by law, and to do all other things which Obligee or any
owner of the Equipment is or may become entitled to do under the
Equipment Agreement.
7.9. Transfer of the Collateral by Lender. Security Trustee or Lender
may be a transferee of the Collateral or of any part thereof or of any
interest therein at any sale thereof, whether pursuant to foreclosure or
power of sale or otherwise hereunder, and may apply upon the transfer
price the indebtedness secured hereby owing to such transfer, to the
extent of such transferee's distributive share of the transfer price. Any
such transferee shall, upon any such transfer, acquire title to the
properties so transferred, free of the Lien of this Agreement.
7.10. No Segregation of Monies; No Interest. Any monies paid to or
retained by Security Trustee pursuant to any provision hereof and not
then required to be distributed to any party as provided in Section 7
hereof need not be segregated in any manner except to the extent
required by law, and may be deposited under such general conditions as
may be prescribed by law, and Lender shall not be liable for any interest
thereon.
7.11. Distribution of Moneys. Except as may be otherwise provided in
this Section 7 and for so long as no Loan Event of Default has occurred
and is continuing, all moneys received by Security Trustee shall be
applied in accordance with this Section 7.11:
7.11.1 Payments under the Equipment Agreement. Moneys received by
Security Trustee constituting Equipment Payment or Equipment
Agreement Commitment Fees
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under the Equipment Agreement (including the payment of interest on
any such overdue Equipment Payment or Equipment Agreement
Commitment Fees) shall be applied:
First, so much of such funds as shall be required to pay in full the
aggregate amount of any interest then due on the Loans hereunder, if
any, at the Overdue Rate and of the interest then due on the Loans at the
Applicable Rate therefor;
Second, so much of such funds as shall be required to pay in full interest
due on any Loan Commitment Fee then due hereunder, if any, at the
Overdue Rate;
Third, so much of such funds as shall be required to pay in full any
Loan Commitment Fee then due hereunder;
Fourth, so much of such funds shall be required to pay in full any
principal installment then due on the Loans; and
Fifth, the balance, if any, of such payment remaining thereafter shall be
distributed to Obligee or its designee.
7.11.2 Payments in Respect of an Event of Loss. Moneys received by
Security Trustee constituting Casualty Loss Value (including any
insurance proceeds or condemnation awards in respect of the subject
Event of Loss which are payable to Security Trustee pursuant to the
provisions of the Equipment Agreement) shall be applied first, to the
prepayment of the Loans required by Section 5.7.1 hereof, and second,
the balance of any such moneys shall be distributed to Obligee or its
designee.
7.11.3 Payment of the Unamortized Debt Balance of any Item of
Equipment. Moneys received by Security Trustee constituting payment
by Obligor of the Unamortized Debt Balance of any Item of Equipment
pursuant to Section 25.2 or 26 of the Equipment Agreement shall be
applied to the prepayment of the Notes required by Section 5.7.2 hereof.
7.11.4 Payment upon Final Disposition of the Items of Equipment.
Moneys received by Security Trustee constituting proceeds of the sale
of any Item of Equipment to a third party pursuant to Section 25.3 of the
Equipment Agreement, plus moneys received by Security Trustee
constituting any Deficiency with respect to such Item of Equipment
shall be applied to the prepayment of the Notes required by Section
5.7.3 hereof.
7.12. Payments after a Loan Event of Default. All payments received
and all amounts held or realized by Security Trustee (including any
amounts realized by Security Trustee from the exercise of any remedies)
after any Loan Event of Default, and all payments or amounts then held
or thereafter received by Security Trustee hereunder or under the
Operative Documents, shall, so long as such Loan Event of Default
continues and shall not have been waived in writing by Lender, be
applied forthwith by Security Trustee in the following order or priority:
First, so much of such payments or amounts held or realized by Security
Trustee as shall be required to reimburse Security Trustee for any
expenses not reimbursed by Obligee in connection with the collection or
distribution of such amounts held or realized by Security
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Trustee or in connection with the expenses incurred in enforcing its
remedies hereunder and preserving the Collateral including, without
limitation, those expenses contemplated under Section 10.1 hereof, shall
be retained by Security Trustee;
Second, so much of such payments or amounts as shall be required to
pay Lender, Security Trustee and Agent the amounts payable to Lender,
Security Trustee and Agent pursuant to the provisions of any
indemnification provisions of this Agreement shall be distributed to
Lender, Security Trustee and Agent;
Third, so much of such payments or amounts remaining as shall be
required to pay (i) any accrued but unpaid interest on the Loan at the
Overdue Rate to the date of distribution, then (ii) any accrued but
unpaid interest thereon at the Applicable Debt Rate to the date of
distribution, then (iii) the Prepayment Premium payable upon any
principal amount paid following acceleration, then (iv) any accrued by
unpaid interest on any accrued unpaid Loan Commitment Fee, if any, at
the Overdue Rate to the date of distribution, then (v) any accrued and
unpaid Loan Commitment Fee, and then (vi) all of the unpaid principal
amount of the Loans and all other amounts due Lender under the other
Operative Documents shall be distributed to Lender; and
Fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to Obligee or its designee.
7.13. Application of Certain Other Payments. Any payments received
by Lender for which provision as to the application thereof is made in
the Operative Documents but not elsewhere in this Agreement shall be
applied forthwith to the purpose for which such payment was made in
accordance with the terms of the Operative Documents.
7.14. Other Payments. Except as otherwise provided in Sections 7.12
and 7.15 hereof, (a) any payments received by Security Trustee for
which no provision as to the application thereof is made in the
Operative Documents, or elsewhere in this Section 7, and (b) all
payments received and amounts realized by Security Trustee with
respect to the Collateral (including, without limitation, all amounts
realized upon the sale, release or other disposition of the Collateral upon
foreclosure of this Agreement), to the extent received or realized at any
time after payment in full of the principal of, Prepayment Premium, if
any, and interest on the Loans, as well as any other amounts remaining
as part of the Collateral after payment in full of the principal of and
interest on the Loans and all other amounts due Lender hereunder and
under any other Loan Document, shall in each case be distributed
forthwith by Security Trustee in the following order of priority:
First, in the manner provided in clause "First" of Section 7.12 hereof;
Second, in the manner provided in clause "Second" of Section 7.12
hereof; and
Third, in the manner provided in clause "Fourth" of Section 7.12 hereof.
7.15. Retention of Amounts by Security Trustee . Except as otherwise
provided in Section 7.12 hereof, if at the time of receipt by Security
Trustee of any payment or amount which would otherwise be
distributable to Obligee, there shall have occurred and be continuing a
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Loan Default or a Loan Event of Default, Security Trustee shall not
distribute any such amount to Obligee or its designee and shall hold it as
security for Obligee's obligations to Lender under the Operative
Documents until such time as there shall not be continuing such Loan
Default or Loan Event of Default.
8. Indemnities.
8.1. Obligor General Indemnification. Obligor hereby assumes liability
for, and does hereby agree to indemnify, protect, save, defend, and hold
harmless each Obligor Indemnified Person on an After-Tax Basis from
and against any and all obligations, fees, liabilities, losses, damages,
penalties, claims, demands, actions, suits, judgments, costs and
expenses, including reasonable legal fees and expenses, of every kind
and nature whatsoever, imposed on, incurred by, or asserted against
such Obligor Indemnified Person (collectively, "Losses"), which is not
directly and primarily caused by the gross negligence or willful
misconduct of such Obligor Indemnified Person and which relates in
any way to or arises in any way out of (a) the manufacture, construction,
ordering, transfer, acceptance or rejection, ownership, transfer of
ownership, titling or retitling, registration or reregistration, delivery,
leasing, subleasing, possession, use, operation, maintenance, storage,
removal, return, repossession, mortgaging, granting of any interest in,
transfer of title to, acquisition, sale or other application or disposition,
disposition of licensing, documentation, of the Items of Equipment or
any Item of Equipment, or any part thereof, including, without
limitation, any of such as may arise from (i) loss or damage to any
property or death or injury to any Persons, (ii) patent or latent defects in
the Items of Equipment (whether or not discoverable by Obligor or any
Obligor Indemnified Person), (iii) any claims based on strict liability in
tort or negligence, (iv) any claims related to the release of any substance
into the environment and (v) any claims based on patent, trademark,
trade name or copyright infringement or (b) the Operative Documents or
the transactions contemplated hereby or thereby other than Losses
primarily caused by such Obligor Indemnified Person's breach under
the Operative Documents provided such breach is not caused by a
breach or default by Obligor under the Operative Documents, or (c) any
failure on the part of Obligor to perform or comply with any of the
terms of the Equipment Agreement or any other Operative Document to
which it is a party or instrument referred to or contemplated hereby or
thereby. With respect to any Obligor Indemnified Person this
indemnification shall not include any matters for which such Obligor
Indemnified Person is indemnified under Section 8.2 or which are
excluded from Obligor's indemnity obligation thereunder. Obligor shall
give each Obligor Indemnified Person prompt notice of any occurrence,
event or condition known to Obligor as a consequence of which any
Obligor Indemnified Person may be entitled to indemnification
hereunder, except only that Obligor shall not be required pursuant to
this Section 8.1 to indemnify any Obligor Indemnified Person for any
liability relating to the Items of Equipment arising out of acts or events
which occur after return of the Items of Equipment to Obligee (and
expiration of any storage period) pursuant to Section 6 of the Equipment
Agreement (other than a return pursuant to Section 21 of the Equipment
Agreement) or which occur after a sale to a third party pursuant to
Section 25.3 of the Equipment Agreement. Unless Obligor is contesting
any such claim specified in clause (a) hereof in a manner reasonably
satisfactory to the affected Obligor Indemnified Person, Obligor shall
forthwith upon demand of any such Obligor Indemnified Person
reimburse such Obligor Indemnified Person for amounts expended by it
in connection with any of the foregoing or pay such amounts directly.
Obligor shall be subrogated to an Obligor Indemnified Person's rights in
any matter with respect to which
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Obligor has actually reimbursed such Obligor Indemnified Person for
amounts expended by it or has actually paid such amounts directly
pursuant to this Section 8.1. In case any claim, action, suit or
proceeding is made or brought against any Obligor Indemnified Person
in connection with any claim indemnified against hereunder, such
Obligor Indemnified Person will, promptly after receipt of notice of
such claim or the commencement of such action, suit or proceeding,
notify Obligor thereof, enclosing a copy of all papers served upon such
Obligor Indemnified Person, but failure to give such notice or to enclose
such papers shall not relieve Obligor from any liability hereunder unless
such failure materially and adversely affects Obligor's defense of such
claim resulting in an increase in liability of Obligor in respect of such
claim or preventing it from reducing liability therefor, in which case
Obligor shall not be required to indemnify such Obligor Indemnified
Person for the amount by which such liability was increased or not
reduced for failure to give such notice. Obligor may, and upon such
Obligor Indemnified Person's request will, at Obligor's expense, resist
and defend such claim, action, suit or proceeding, or cause the same to
be resisted or defended by counsel selected by Obligor and reasonably
satisfactory to such Obligor Indemnified Person and in the event of any
failure by Obligor to satisfy its obligations under this Section, Obligor
shall pay all reasonable costs and expenses (including, without
limitation, attorney's fees and expenses) incurred by such Obligor
Indemnified Person in connection with such action, suit or proceeding.
The provisions of this Section 8.1, and the obligations of Obligor under
this Section 8.1, shall apply from the date of the execution of the
Equipment Agreement notwithstanding that the Term may not have
commenced with respect to any Item of Equipment, and shall survive
and continue in full force and effect notwithstanding the expiration or
earlier termination of the Equipment Agreement in whole or in part,
including the expiration of termination of the Term with respect to any
Item of Equipment, and are expressly made for the benefit of, and shall
be enforceable by, each Obligor Indemnified Person.
8.2. Obligor General Tax Indemnity. Except as provided in Section 6.8
hereof, Obligor agrees to pay, defend and indemnify and hold Obligee,
Trust Company, Lender, Agent, Security Trustee, Owner Participant
and LC Issuer and their respective Affiliates, successors and assigns
(including any consolidated or combined group of which any such
Person is a member) (each a "Tax Indemnitee") harmless on an
After-Tax Basis from any and all Federal, state, local and foreign taxes,
fees, withholdings, levies, imposts, duties, assessments and charges of
any kind and nature whatsoever, together with any penalties, fines or
interest thereon (herein called "Taxes") howsoever imposed, whether
levied or imposed upon or asserted against a Tax Indemnitee, Obligor,
any Item of Equipment, or any part thereof, by any federal, state or local
government or taxing authority in the United States, or by any taxing
authority of a foreign country or subdivision thereof, upon or with
respect to (a) the Items of Equipment, any Item of Equipment or any
part thereof, (b) the manufacture, construction, ordering, transfer,
ownership, transfer of ownership, titling or retitling, registration or
reregistration, delivery, leasing, subleasing, possession, use, operation,
maintenance, storage, removal, return, mortgaging, granting of any
interest in, transfers of title to, acquisition, sale or other disposal of
licensing, documentation, repossession, sale or other application or
disposition of the Items of Equipment, any Item of Equipment or any
part thereof, (c) the revenues, rent, receipts or earnings arising from any
Item of Equipment or any part thereof, (d) the Equipment Agreement,
each Item of Equipment Supplement, the Equipment Payment,
Equipment Agreement Commission and/or Supplemental Payments
payable by Obligor hereunder or under the Equipment Agreement or
any payment made to Lender by Obligee, Obligor, Owner Participant or
Trust Company pursuant to
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the Operative Documents, or (e) otherwise in respect of the Operative
Documents or any thereof or any transaction or transactions
contemplated hereby or thereby; provided, however, that the foregoing
indemnity shall not apply with respect to any Tax Indemnitee to (i)
Taxes based upon or measured by such Tax Indemnitee's net income,
gross income, gross receipts (except gross income and gross receipts
Taxes expressly imposed in lieu of overall sales Taxes), capital, net
worth, excess profits or items of tax preference, including minimum and
alternative minimum Taxes imposed by any United Sates federal, state
or local taxing authority (but in the case of state and local taxes only,
such Taxes shall not be excluded from indemnification to the extent
imposed due to the location or presence of the Items of Equipment, the
presence, activities or place of business or organization of Obligor (or
any person claiming or taking possession of the Items of Equipment
from or through Obligor) in the taxing jurisdiction imposing such Tax,
or any payments being made from such jurisdiction or as contemplated
by Section 25.3.2 of the Equipment Agreement) ("Income Taxes"),
(ii) Taxes imposed on a Tax Indemnitee, including, without limitation,
sales and transfer Taxes, that result from any voluntary or involuntary
transfer by such Tax Indemnitee of any interest in the Items of
Equipment or in any other Tax Indemnitee or any portion of any of the
foregoing or any interest arising out of the Equipment Agreement and
Operative Documents unless such transfer shall have occurred in
connection with, or as a result of, Obligee's acquisition of an Item of
Equipment following an Equipment Agreement Event of Default or
exercise of a transfer option or sale to a third party pursuant to Section
25.3.2 of the Equipment Agreement, (iii) Taxes imposed on a Tax
Indemnitee by any jurisdiction as a result of a situs of organization of
such Tax Indemnitee or such Tax Indemnitee's engaging in activities in
such jurisdiction unrelated to the transactions contemplated by the
Operative Documents and not as a result of the presence of the Items of
Equipment, Obligor, any Tax Indemnitee other than such Tax
Indemnitee in, or any payments being made from, or the registration,
filing or enforcement of any document or charge contemplated or
necessitated by the Operative Documents, in such jurisdiction, (iv)
Taxes imposed on a Tax Indemnitee that result from any willful
misconduct or gross negligence of such Tax Indemnitee, (v) except
where there exists an Equipment Agreement Event of Default, Taxes
that are attributable to any period beginning or circumstances occurring
after the expiration or earlier termination of the Equipment Agreement
other than with respect to a sale to a third party pursuant to Section
25.3.2 of the Equipment Agreement, and other than the payment of any
amount after such date that has accrued on or prior to such date, and any
interest thereon, (vi) Taxes that are based on or measured by fees or
compensation for services rendered by Obligee but not including
interest, (vii) Taxes imposed by a taxing authority of a foreign country
or subdivision thereof not by reason of the location or presence of the
Items of Equipment, Obligor, in such jurisdiction or payments being
made from such jurisdiction or the registration, filing or enforcement of
any document or charge contemplated or necessitated by the Operative
Documents in such jurisdiction, (viii) Taxes, including, without
limitation, any excise Taxes or other impositions or penalties, payable
as a result of such Tax Indemnitee's participation in the transactions
contemplated by the Operative Documents being deemed to result in a
"prohibited transaction" by any party to the Equipment Agreement
within the meaning of Section 406 of ERISA or Section 4975 of the
Code due to such Tax Indemnitee's violation of its representation set
forth in section 2, (ix) Taxes imposed on a transferee Tax Indemnitee in
excess of the amount of such Taxes that would have been imposed on
the transferor had there not been a transfer by a Tax Indemnitee after the
Closing Date of an interest in the Items of Equipment or in any other
Tax Indemnitee or any portion of the foregoing or any interest arising
under any Operative Document (except to the extent such excess Taxes
are
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imposed as a result of a change in Applicable Law after the date of such
transfer) unless such transfer shall have occurred in connection with, or
as a result of, an Equipment Agreement Event of Default or exercise of
a transfer option or a sale to a third party pursuant to Section 25.3.2 of
the Equipment Agreement, provided that this exclusion shall not be read
to prevent any payment pursuant to this Section 8.2 being made on an
After-Tax Basis, and (x) Taxes imposed on a Tax Indemnitee resulting
from (a) the existence of any Liens created by such Tax Indemnitee
(other than Permitted Liens), or (b) any inaccuracy of any
representation, or breach of any warranty or covenant by such Tax
Indemnitee, unless such violation or breach is a result of a breach by
Obligor of any of its obligations under any Operative Document.
Obligor will promptly notify Obligee and each Tax Indemnitee of all
reports or returns required to be made by it with respect to any tax or
other imposition with respect to which Obligor is required to indemnify
hereunder, and will promptly provide each Tax Indemnitee with all
information necessary for the making and timely filing of such reports
or returns by it. If a Tax Indemnitee requests that any such reports or
returns be prepared and filed by Obligor, Obligor will prepare and file
the same if permitted by applicable law to file the same, and if not so
permitted, Obligor shall prepare such reports or returns for signature and
shall forward the same, together with immediately available funds for
payment of any Tax due, at least ten (10) days in advance of the date
such payment is to be made. Upon written request, Obligor shall
furnish each Tax Indemnitee with copies of all paid receipts or other
appropriate evidence of payment for all Taxes paid by Obligor pursuant
to this Section 8.2. Each Tax Indemnitee shall furnish Obligor with
copies of any written requests for information received by it from any
taxing authority relating to any Tax with respect to which Obligor is
required to indemnify hereunder, and if a written claim is made against
a Tax Indemnitee for any such Tax with respect to which Obligor is
liable for a payment or indemnity hereunder, Obligee or such Tax
Indemnitee shall give Obligor notice in writing of such claim. Each such
Tax Indemnitee will use its best efforts to inform Obligor of any
potential claims of which it has notice. Obligor may, at its sole cost and
expense, either in its own name (other than with respect to Income
Taxes) or in the name of the Tax Indemnitee, contest the validity,
applicability or amount of such Tax, by (i) resisting payment thereof if
practicable, unless payment is required to avoid risk of the sale or
forfeiture of, or the creation of a Lien on, the Items of Equipment to
which such contest relates, (ii) not paying the same except under protest,
if protest is necessary, or (iii) if the payment is made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and
judicial proceedings; provided, however, that such contest shall be
permitted only if no Equipment Agreement Event of Default has
occurred and is continuing hereunder, and only if and to the extent that
such contest is being diligently prosecuted by Obligor by appropriate
legal or administrative proceedings, and the action to be taken in
connection with such contest (a) will not result in the sale, forfeiture or
loss of, or the creation of a Lien on, the Items of Equipment to which
such contest relates or Obligee's title thereto or any Tax Indemnitee
interest therein, (b) is only with respect to any issue or Tax that is the
subject of the indemnity provided in this Section 8.2, (c) Obligor shall
have provided such Tax Indemnitee with an opinion of tax counsel
reasonably satisfactory to such Tax Indemnitee, that such a contest has a
reasonable basis, and (d) Obligor shall have acknowledged in writing its
obligation to indemnify such Tax Indemnitee in the event the contest is
unsuccessful (but such acknowledgment shall be of no force and effect
if the resolution of such contest is on a basis that clearly demonstrates
that Obligor is not liable for such indemnity); provided that a Tax
Indemnitee may assert control of the conduct of a contest which the
Obligor has a right to control hereunder if the Tax Indemnitee provides
written notice to Obligor that it wishes to conduct such
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contest and that it fully and irrevocably releases Obligor from its
indemnification obligations for the Tax (or Taxes) that is (or are) the
subject of such contest and all otherwise indemnifiable amounts related
thereto; provided further that Obligor can eliminate its obligations to
cover the costs and expenses of any contest by irrevocably paying the
amount of such Taxes. If a Tax Indemnitee has received a refund of any
amount paid by Obligor pursuant to this Section 8.2, such Tax
Indemnitee shall pay to Obligor the amount of such refund, together
with the amount of any interest actually received by such Tax
Indemnitee on account of such refund net of any actual loss incurred by
such Tax Indemnitee resulting from the circumstances relating to such
payments. Each Tax Indemnitee shall have sole control over the
positions taken with respect to its tax returns, filings and proceedings
except with respect to Tax filings and proceedings that are otherwise
provided for in this Section 8.2. All of the indemnities contained in this
Section 8.2 are expressly made for the benefit of, and shall be
enforceable by each Tax Indemnitee. Each Tax Indemnitee shall
determine the allocation of any tax credit, tax savings, refund or other
benefit and any related detriment resulting from any Tax indemnified
hereunder, or from any indemnity payment hereunder, in its sole
discretion and shall not be obligated to disclose its tax returns and
related materials to any Person, other than any court or governmental
agency if required in any contest, undertaken pursuant to this Section
8.2 hereof, of the imposition of any Tax indemnified hereunder, and the
positions of each Tax Indemnitee in its tax returns, filings and
proceedings shall be within its sole control except with respect to Tax
filings and proceedings that are otherwise provided for in this Section
8.2. Notwithstanding anything in the foregoing to the contrary, Obligor
hereby agrees that all tax reports and returns of Owner Participant will
be treated in a responsible manner and their confidentiality maintained.
If Obligor pays any Tax to or on behalf of any Tax Indemnitee for
which the Obligor has no indemnity obligation pursuant to this Section
8.2 (or otherwise pursuant to the Operative Documents), the Tax
Indemnitee upon whom, or with respect to which, such Tax was
imposed, and for which the Obligor has no indemnity obligation, shall,
within 10 days of written request therefor by Obligor, pay to Obligor the
amount of Tax so paid, with interest at the Applicable Debt Rate from
the date of payment of such Tax.
8.3. Obligee Indemnities. Obligee hereby assumes liability for, and
does hereby agree to indemnify, protect, save, defend, and hold
harmless each Obligee Indemnified Person on an After-Tax Basis from
and against any and all Losses and each Tax Indemnitee against any and
all Taxes to the same extent as Obligor indemnifies such Persons under
Sections 8.1 and 8.2 hereof.
8.4. Survival. All obligations provided for in this Section 8 shall
survive the sale of any Item of Equipment, any termination of the
Equipment Agreement, the termination of this Agreement, and the
payment in full of the Notes.
9. Agent for Lender.
9.1. Authorization and Action. Lender hereby appoints and authorizes
Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are
delegated to Agent by the terms hereof and thereof, respectively,
together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by a Loan Document (including
enforcement or collection of the Notes), Agent shall not be required to
exercise any discretion or take any action, but shall be
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required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of Lender (or
in the event there are multiple Lenders upon the instruction of the
Majority Lenders) and such instructions shall be binding upon Lender
and Agent shall not be required to take any action which exposes Agent
to personal liability or which is contrary to any Loan Document or
Applicable Law. Agent agrees to give to Lender prompt notice of each
notice given to it by Obligee pursuant to the terms of this Agreement.
Agent may, with the prior consent of Lender (or if there are multiple
Lenders, the Majority Lenders) agree to any waiver or amendment of
the Operative Documents on behalf of Lender; provided, however, if
there are multiple Lenders Agent will not, without the prior consent of
all Lenders agree to any waiver or amendment that would (i) postpone
the time or times for payment of any amount payable under the
Equipment Agreement or the principal of or interest on any Loan,
(ii) reduce any amount payable under the Equipment Agreement or the
principal amount of any Loan or reduce the rate of interest on any Loan,
or (iii) prior to the payment in full of the Secured Obligations, release
any of the Collateral from the Lien created by the Loan Documents,
other than in accordance with the terms thereof. Each of Agent and
Security Trustee shall pursue its remedies under the Loan Documents
following a Loan Event of Default in accordance with the instructions of
Lender (or in the event there are multiple Lenders the Majority
Lenders).
9.2. Agent's Reliance, etc. Neither Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or
omitted by it or them under or in connection with any Loan Document,
except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, Agent (i) may
consult with legal counsel (including counsel for Obligor), independent
public accountants and other experts selected by it and shall not be
liable for any action taken or omitted in good faith by it in accordance
with the advice of such counsel, accountants or experts, (ii) makes no
warranty or representation to Lender and shall not be responsible to
Lender for any statements, warranties or representations made in or in
connection with any Loan Document, (iii) 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 any Loan Document on the part of
Obligor or to inspect the property (including the books and records) of
Obligor, (iv) shall not be responsible to Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of
any Loan Document or any other instrument or document furnished
pursuant thereto, and (v) shall incur no liability under or in respect of
any Loan Document by acting upon any notice, consent, certificate or
other instrument or writing (which may be by fax, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper party
or parties.
9.3. Agent and Affiliates. With respect to any Commitment made by it,
any Loans made by it and any Note issued to it, Agent shall have the
same rights and powers under each Loan Document as any other Lender
and may exercise the same as though it were not an agent hereunder;
Agent and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of
business with, Obligee or Obligor, any of its subsidiaries and any
Person who may do business with or own securities of Obligee or
Obligor or any such subsidiary, all as if Agent were not an agent
hereunder and without any duty to account therefor to Lender.
9.4. Lender Credit Decision. Lender acknowledges that it has,
independently and without reliance upon Agent and based on the
financial statements of Obligee and Obligor
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and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.
Lender also acknowledges that it will, independently and without
reliance upon Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents.
9.5. Indemnification. Lender agrees to indemnify Agent (to the extent
not reimbursed by Obligee or Obligor), (and if there are multiple
Lenders, each Lender agrees to do so ratably according to the respective
principal amounts of the Notes then held by it), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against
Agent in any way relating or arising out of any Loan Document or any
action taken or omitted by Agent under any Loan Document; provided
that Lender shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, Lender agrees
to reimburse Agent promptly upon demand for out-of-pocket expenses
(including counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, any Loan Document, to the extent that Agent is
not reimbursed for such expenses by Obligee or Obligor.
9.6. Successor Agent. Agent may resign at any time by giving at least
15 days written notice thereof to Lender and Obligee, and Agent may be
removed at any time with or without cause by Lender (of if there are
multiple Lenders, by the Majority Lenders). Upon any such resignation
or removal, Lender or the Majority Lenders, as the case may, be shall
have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by Lender or the Majority Lenders, and shall
have accepted such appointment, within 30 days after any such
resignation of removal, the retiring Agent may, on behalf of Lender,
appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the obligations under each Loan Document.
9.7. Holder List; Ownership of Notes. Agent shall preserve in as current
a form as is reasonably practicable the most recent list available to it of
the names and addresses of the holders of the Notes, which list shall be
available to Obligee or its representative for inspection. Ownership of
the Notes shall be proved by the Note register kept by Agent. Prior to
due presentment for registration of transfer of any Note, Agent and
Obligee may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of, and Prepayment Premium, if any, and
interest on such Note and for all other purposes whatsoever, whether or
not such Note is overdue, and neither Agent nor Obligee shall be
affected by any notice to the contrary.
9A LC Issuer Purchase Option
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9A.1 In the event that on any Termination Date Obligor has not
exercised its option to transfer the Equipment pursuant to Section 25.2
of the Equipment Agreement and has not renewed the Equipment
Agreement, LC Issuer shall have the right, and is hereby granted the
option (the "LC Issuer Option") to purchase, or at the option of LC
Issuer, to designate a third party to purchase, and the Lender hereby
agrees to sell to LC Issuer or its designee all of its right, title and
interest in the Loans and the Notes, any time after such Termination Date
at a purchase price equal to the aggregate of all amounts then owing to
Lender under the Operative Documents (the "Purchase Option Price")
and to assign all of Lender's rights, remedies and security interests with
respect to the Loans and Notes under the Operative Documents to LC
Issuer or its designee. In order to exercise the LC Issuer Option, LC
Issuer shall deliver to Lender and Security Trustee irrevocable written
notice of such election (the "Option Notice") and shall pay the Purchase
Option Price in immediately available funds on or before the second
Business Day after delivery of the Option Notice in accordance
herewith.
9A.2 Lender agrees that it shall not grant participations in, assign, sell
or otherwise transfer all or any part of its interest in the Loans or any
Note unless such transferee, assignee, participant or Liquidity Provider
expressly acknowledges and agrees that its interest in the Loans and the
Notes shall be subject to the LC Issuer Option (in the case of each
Liquidity Provider the Liquidity Agreement shall expressly so provide)
and Lender and Security Trustee agree that they will not take any action
with respect to the Equipment during the period after Lender and
Security Trustee receive the Option Notice and prior to the third
Business Day thereafter without the consent of LC Issuer.
10. Miscellaneous.
10.1. Expenses and Recording. Obligor shall reimburse Obligee, Trust
Company, Owner Participant, Lender, Owner Participant, Agent and
Security Trustee for all reasonable costs and expenses in connection
with the preparation, execution and delivery of the Operative
Documents, the documents relating to the Liquidity Facility and the
consummation of the transactions contemplated thereby, and without
limiting the generality of Obligor's undertaking to do so, Obligor shall
pay the reasonable fees and expenses (initial and ongoing) of Trust
Company for serving as Obligee and shall reimburse Trust Company,
Lender, Owner Participant, LC Issuer, Agent and Security Trustee for
all of their respective costs and expenses (including, without limitation,
reasonable counsel fees and disbursements) in connection with the
preparation, execution and delivery of and the consummation of the
transactions contemplated thereby; provided, however, Obligor shall
have no obligation to reimburse the above Persons for costs and
expenses in the negotiation, preparation and execution of Operative
Documents negotiated, prepared and executed after the Closing Date
unless otherwise required under this Agreement or such Operative
Documents relate to or arise out of an Equipment Agreement Event of
Default. Obligor shall also pay the reasonable fees and disbursements of
special counsel to Owner Participant and special counsel to Lender in
connection with any amendments, waivers or consents requested by
Obligor under the Equipment Agreement. Upon the occurrence of any
Equipment Agreement Default or Equipment Agreement Event of
Default, Obligor will also pay or reimburse Lender and Owner
Participant for reasonable costs and expenses of counsel and of financial
advisors as shall have been selected by Owner Participant or Lender to
assist Owner Participant and Lender in connection with such Equipment
Agreement Defaults or Equipment Agreement Events of Default.
Obligor, at its own expense, will further cause the Equipment
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Agreement, the Loan Documents and/or appropriate financing
statements or continuation statements to be filed and recorded and, from
time to time when required, refiled and re-recorded, in accordance with
Applicable Law in any jurisdiction in which Obligor or any Item of
Equipment is located recognizing Obligee's, Lender's or Security
Trustee's interest in the Equipment Agreement and in the Items of
Equipment as a security interest and in any other jurisdiction where
filing shall be reasonably requested by Obligee or Lender for the
purpose of proper protection, to the satisfaction of counsel for Obligee
or Lender, of its interests and rights under the Equipment Agreement, or
the Loan Documents for the purpose of carrying out the intention of the
Equipment Agreement and the Loan Documents. Obligor in addition
will from time to time do and perform any other act and will execute,
acknowledge, deliver, file, register, record (and will refile, reregister,
deposit and redeposit or rerecord whenever required) any and all further
instruments reasonably requested by Obligee or Lender for the purpose
of proper protection, to its satisfaction, of Obligee's or Security
Trustee's interests in the Items of Equipment, or for the purpose of
carrying out the intention of the Equipment Agreement or the Loan
Documents; and Obligor will promptly furnish to Obligee or Lender
which shall have requested the same evidence of all such filing,
registering, depositing or recording.
10.2. Modification. This Agreement and the Notes may be modified
only by an instrument in writing signed by the parties hereto.
10.3. Governing Law, Jurisdiction and Venue; Waiver of Jury. This
Agreement and the rights and obligations of the parties hereunder and
under the Notes shall be construed in accordance with, and be governed
by, the law of the State of New York. The parties hereto hereby agree
that all actions or proceedings initiated by any party hereto arising
directly or indirectly out of this Agreement or the other Loan
Documents may be litigated in the Supreme Court of the State of New
York located in New York City or the District Court or the United
States District Court for the Southern District of New York. Each party
hereto hereby expressly submits and consents in advance to such
jurisdiction and venue in any action or proceeding commenced by any
party hereto in any of such courts, agrees that jurisdiction and venue is
proper in such courts, and hereby waives personal service of the
summons and complaint, or other process or papers issued therein, and
agrees that such service of the summons and complaint may be made by
registered mail, return receipt requested, addressed to the party hereto
being served at the address for such party set forth in Section 10.4
hereof. Each party hereto waives any claim that New York City or the
Southern District of New York is an inconvenient forum or an improper
forum based on lack of venue. The choice of forum set forth herein
shall not be deemed to preclude the enforcement by Lender or Security
Trustee of any judgment in any other appropriate jurisdiction. Each of
Obligor, Obligee, Trust Company and Owner Participant hereby waives
trial by jury in any judicial proceeding brought by it, Lender or Security
Trustee involving directly or indirectly, any matter in any way arising
out of, related to, or connected with this Agreement or the other
Operative Documents.
10.4.Notices. All notifications, notices, demands, requests and other
communications herein provided for or made pursuant hereto shall be in
writing and shall be sent via (i) reputable overnight delivery service, and
the giving of such communication shall be complete on the immediately
succeeding Business Day after the same is deposited with such delivery
service, (ii) by legible telefax with original to promptly follow by
certified mail, with return receipt requested, and the giving of such
communication shall be completed on the
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Business Day on which such fax is received. Written communications
may be in any form of writing howsoever transmitted. The initial
address of the parties hereto are as follows:
Lender:
▇/▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ Branch
2 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Structured Finance Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Agent and Security Trustee:
2 World Financial Center
New York, New York 10281-1050
Attention: Syndication Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Commerzbank AG, Los Angeles Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Obligee and Trust Company:
▇▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Owner Participant:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
LC Issuer:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President - Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Obligor:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
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Attention: Treasurer or Assistant Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
10.5. Interests in the Equipment. The parties hereto intend that (a) for
financial accounting purposes with respect to Obligor, Obligee will be
treated as the owner and the lessor of each Item of Equipment and
Obligor will be treated as the lessee of each Item of Equipment and (b)
for all other purposes, including federal and all state and local income
tax purposes, state sales, use and other transaction tax purposes and state
commercial law, (i) the Operative Documents will be treated as a
financing arrangement, (ii) Obligee will be deemed a lender making
loans to Obligor in an amount equal to the sum of the aggregate of the
Equity Components for each Item of Equipment and the outstanding
principal amount of the Loans and (iii) Obligor will be treated as the
owner of each Item of Equipment and will be entitled to all tax benefits
ordinarily available to an owner of equipment like the Equipment for
such tax purposes. Obligee shall take no action inconsistent with the
intention of the parties set forth in clause (b)(iii) of this Section 10.5;
provided however, if this Equipment Agreement is finally and
conclusively determined by any taxing authority having jurisdiction
with respect thereto not to constitute a finance lease, Obligee, Owner
Participant, Lender, Security Trustee and Obligor may take all actions
necessary or desirable as a result of such determination and otherwise
permitted by the terms of the Operative Documents. Notwithstanding
the intentions of the parties expressed herein, Obligor acknowledges and
agrees that neither Obligee, Owner Participant, Lender, Security Trustee
nor Agent has made any representations or warranties to Obligor
concerning the tax, accounting or legal characteristics of the Operative
Documents and that Obligor has obtained and relied upon such tax,
accounting and legal advice concerning the Operative Documents as it
deems appropriate.
10.6. Descriptive Headings, etc. The descriptive headings used in this
Agreement are for convenience only and shall not be deemed to affect
the meaning or construction of any provision hereof.
10.7. Benefit of Agreement; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns and in particular any holder
from time to time of any Note. No party hereto may assign any or all of
its rights or obligations hereunder without the consent of the other
parties hereto; provided however, Obligee may transfer or assign any or
all of its rights or obligations hereunder to a successor Obligee
appointed in accordance with the Trust Agreement and Lender may at
any time grant participations in or sell, assign, negotiate or otherwise
transfer to any Permitted Lender Assignee, any of its rights or
obligations hereunder or under any other Loan Document provided each
such Permitted Lender Assignee shall expressly acknowledge and
consent to the LC Issuer Option. Obligee shall from time to time at the
request of Lender, execute and deliver to Lender such documents as
such Lender may deem reasonably necessary or desirable to give full
force and effect to any such sale, assignment or transfer. If Lender sells,
assigns, negotiates or otherwise transfers all or a part of its rights and
obligations hereunder, or all or a part of the Loan, or all or a part of any
Note outstanding at the time, to any Permitted Lender Assignee, any
reference to "Lender" in any Operative Document shall thereafter refer
to Lender and to such other Permitted Lender Assignee to the extent of
their respective interests.
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10.8. Execution and Effectiveness. This Agreement may be executed
in multiple counterparts, each of which shall be regarded as an original
and all of which shall constitute a single instrument and shall become
effective on the Closing Date when each of the parties hereto shall have
signed a copy hereof (whether the same or different copies) and Obligee
shall have delivered to Lender a copy executed by each such party.
10.9 Registration. The Notes are or, when issued, will be registered
obligations. Obligee and Lender hereby direct and authorize Agent to
establish and maintain at the office of Agent registration books in which
Agent will register, and register any assignment effected in compliance
with Section 10.7 of, each holder's interest in each Note or any portion
thereof and which identifies each registered holder of each Note or any
portion thereof. No transfer by any holder of a Note or any portion
thereof shall be effective unless and until such transfer is made upon the
registration books maintained by Agent. Prior to registration of transfer,
Obligee may treat the person in whose name the Note is registered as
the absolute owner thereof for all purposes, and Obligee shall not be
affected by any notice to the contrary.
10.10. Confidentiality. Each of Obligee, Owner Participant, Lender,
Agent and Security Trustee agrees that all financial statements and other
proprietary information furnished by Obligor will be treated by it in a
responsible manner, and their confidentiality maintained; such material
will not be disseminated except to the parties hereto or their respective
officers, directors, employees, agents, auditors, attorneys and
professional consultants who, for proper reasons consistent with the
purposes for which this information is furnished, need access to such
information, and to such other parties to whom Obligee, Trust
Company, Owner Participant, Lender, Agent or Security Trustee may
have a duty or legal obligation of disclosure, including, without
limitation, any Governmental Entity having jurisdiction over Obligee,
Trust Company, Lender, Agent or Security Trustee. This confidentiality
provision will survive the expiration or early termination of this
Agreement. Each of Obligee, Owner Participant, Lender, Agent or
Security Trustee may designate any person in writing who is an officer,
employee or agent thereof (each, a "Designee"), to visit and inspect the
properties (including, without limitation, the Items of Equipment) of
Obligor, and to the extent reasonable under the circumstances, examine
its books of record and accounts (including, without limitation,
Obligor's records pertaining to the Items of Equipment but excluding
tax returns and related tax information), and discuss its affairs, finances
and accounts with its officers, and, with notice to Obligor so that it may
have an officer present if it so reasonably requests, the accountants of
Obligor, all at such reasonable times, during normal business hours, as
Obligee, Owner Participant, Lender, Agent or Security Trustee, as the
case may be, may reasonably request and, upon such request, Obligor
shall make such properties and such books of record and accounts
available to Obligee, Owner Participant, Lender, Agent or Security
Trustee, as the case may be, for inspection; provided, however, that,
with respect to the properties of Obligor, other than the Items of
Equipment and the records of Obligor other than those pertaining to the
Items of Equipment, Obligor's obligations hereunder shall arise only
following the occurrence and during the continuance of an Equipment
Agreement Default or Equipment Agreement Event of Default, except
that prior to the occurrence of an Equipment Agreement Default or
Equipment Agreement Event of Default, Obligor shall, upon receipt of
reasonable notice, permit Obligee, Owner Participant, Lender, Agent or
Security Trustee or any Designee to discuss the affairs, finances and
accounts of Obligor with a financial officer of Obligor. No breach of
the foregoing covenants by Obligee, shall affect or impair the
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126
obligation of Obligor to pay Obligee or Lender any amounts due under
this Agreement or the Equipment Agreement.
10.11. Survival. Each of the representations, warranties, terms,
covenants, agreements and conditions contained in this Agreement shall
specifically survive the execution and delivery of this Agreement and
the other Loan Documents and the making of the Loans and shall,
unless otherwise expressly provided, continue in full force and effect
until the Loans, together with interest thereon, and all other sums
payable hereunder or thereunder have been indefeasibly paid in full.
10.12. Severability. The provisions of this Agreement are severable,
and if any section or provision shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part
thereof, in such jurisdiction and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or
provision of this Agreement in any jurisdiction.
10.13. No Broker. Each party hereto hereby represents and warrants to
the other parties that no broker other than BTM Financial Services, Inc.
(whose fees shall be paid solely by Obligor) brought about the
transactions contemplated hereby and each party hereby agrees to
indemnify (the "Indemnifying Party") and hold each other party
harmless from, any and all other liabilities and costs (including without
limitation, costs of counsel) to any Person claiming brokerage
commissions or finder's fees as a result of any agreement with the
Indemnifying Party.
10.14. Performance by Lender. If Obligee fails to perform any of its
obligations under the Operative Documents in a timely fashion, Lender
shall be entitled, but not obliged, to perform such obligation at the
expense of Obligee and without waiving any rights they may have with
respect to such breach.
10.15. Payment from Collateral; Limited Recourse. Without impairing
any of the other rights, powers, privileges, liens or security interests of
Lender or Security Trustee pursuant to the Loan Documents, except for
the Trust Company's or Owner Participant's gross negligence, willful
misconduct, misrepresentations or fraud and as expressly provided in
this Agreement or any other Loan Document, and subject to the proviso
below, Lender agrees that as between it and the Trust Company and
Owner Participant, no recourse shall be had with respect to this
Agreement or such other Loan Documents against the Trust Company
or Owner Participant , or any officer, director, employee, agent or
Affiliate thereof for amounts owed by Obligee under the Loan
Documents; and neither the Trust Company nor Owner Participant, nor
any officer, director, employee, agent or Affiliate thereof shall have any
personal liability for any amounts owed by Obligee under the Loan
Documents; provided, however, that nothing contained in this Section
10.15 or elsewhere shall be construed to (i) prevent recourse to and the
enforcement against the Collateral of all liabilities, obligations and
undertakings contained in the Loan Documents, (ii) limit, restrict, or
impair the right of Lender to accelerate the maturity of the Loan upon
the occurrence of a Loan Event of Default, (iii) prevent the bringing of
an action or obtaining a judgment against Obligee or against the Trust
Company or Owner Participant for any breach of any of its
representations, warranties or covenants under any of the Operative
Documents, or (iv) prevent the bringing of an action or obtaining of a
judgment to foreclose the lien of this Agreement or Security Documents
or otherwise realize upon the Collateral or the
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127
sums due or to become due under the Equipment Agreement or the
other Loan Documents to which any such Person is a party.
10.16. No Proceedings. Each party hereto agrees that it shall not
institute against, or join any other Person in instituting against Four
Winds Funding Corporation any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings
under any federal or state bankruptcy or similar law for one year and a
day after the latest maturing Commercial Paper Notes issued by Four
Winds Funding Corporation is paid.
10.17. Concerning Obligee. Trust Company is entering into this
Equipment Agreement solely in its capacity as Owner Trustee under the
Trust Agreement and not in its individual capacity (except as expressly
stated herein) and in no case shall Trust Company (or any entity acting
as successor Owner Trustee under the Trust Agreement) be personally
liable for or on account of any of the statements, representations,
warranties, covenants or obligations stated to be those of Obligee
hereunder; provided, however, that Trust Company (or any such
successor Owner Trustee) shall be personally liable hereunder for Trust
Company Liabilities.
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128
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.
▇▇▇▇▇▇ INTERNATIONAL INDUSTRIES, INCORPORATED,
Obligor
By:_________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its individual
capacity,
but solely as trustee,
Obligee
By:_________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, in its individual
capacity,
Trust Company
By:_________________________________
Name:
Title:
▇▇▇
▇▇▇▇ ▇▇▇▇▇ FUNDING CORPORATION
By: Commerzbank AG,
New York Branch as attorney-in-fact,
Lender
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH,
Agent and Security Trustee
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
Owner Participant
By:_________________________________
Name:
Title:
130
BTM CAPITAL CORPORATION,
LC Issuer
By:_________________________________
Name:
Title:
131
Schedule 1
Description of Equipment
The principal equipment to be financed under this facility will be used
by Obligor in the manufacturing and assembly of amplifiers,
microphones and loudspeakers. The equipment will typically include,
but is not limited to: surface mounting component placement
equipment, automatic insertion machines, computers, software,
wavesolderers, conveyor assembly, x-ray inspection stations, coil
winders, static free floors and hand insertion stations.
The equipment is usually combined in some fashion in order to
complete a manufacturing cell or line to produce the final goods that
Obligor sells. This combination can require labor costs, other soft and
hard costs and other equipment that comprise the final price of the cell
or line.
Obligor may also include other equipment, which is typically purchased
under a financing structure that meets the tenor of this facility.
132
Schedule 3
Commitment Fee Rates
and LIBOR Margins
Obligor's Standard and Commitment Fee LIBOR Margin (in
Poor's and Moody's Rate(in basis basis points
Senior Unsecured points per annum) per annum)
Credit Ratings
BBB+ / Baa1 or higher 15.0 65.0
BBB / ▇▇▇▇ ▇▇.▇ ▇▇.▇
▇▇▇- / ▇▇▇▇ 25.0 125.0
BB+ / Ba1 37.5 175.0
BB / Ba2 or lower 50.0 250.0
If the Commitment Fee Rate and LIBOR Margin based Obligor's
Standard and Poor's rating is different from the Commitment Fee Rate
and LIBOR Margin based on Obligor's ▇▇▇▇▇'▇ rating, then (a) the
Commitment Fee Rate and LIBOR Margin based on the higher of the
Standard and Poor's and Moody's ratings will apply provided the lowest
of those two ratings is greater than BBB- and Baa3 and (b) the
Commitment Fee Rate and LIBOR Margin based on the lower of the
two ratings will apply if the lowest of those two ratings is equal to or
less than BBB- or Baa3. The Commitment Fee Rate and LIBOR
Margin during each Equipment Payment Period shall be the greatest of
the Commitment Fee Rates and LIBOR Margins calculated in
accordance with the preceding sentence for any day during such
Equipment Payment Period.
133
EXHIBIT A
CROSS-RECEIPT
State Street Bank and Trust
Company of Connecticut, NA
as Trustee under Trust Agreement
dated as of September 30, 1999
Ladies and Gentlemen:
We refer to the Participation Agreement, dated as of September 30,
1999 (together with all schedules and exhibits thereto, the "Agreement")
relating to the transfer by us to you of all rights and interest in certain
equipment (the "Equipment") as defined in the Agreement. Terms used
and not otherwise defined herein shall have the respective meaning
given thereto in the Agreement.
The undersigned has this date transferred to you all rights and interests
in each Item of Equipment identified in the attached schedule.
The undersigned acknowledges that you have delivered to it payment in
an amount equal to 100% of the Acquisition Cost of the Equipment in
the amount of __________ Dollars ($_____), in consideration of the
transfer to you of all rights and interest in such Equipment under the
Agreement.
Kindly confirm the delivery to you of the Agreement and such interest,
and your acceptance of the same, by signing the enclosed copy of this
letter at the place provided below and returning it to the undersigned.
Very truly yours,
Harman Industries International, Inc.
By: _____________________
Delivery confirmed:
State Street Bank and Trust Company,
N.A. as Trustee
____________________________
134
EXHIBIT B
FORM OF CERTIFICATE OF COSTS
CERTIFICATE OF COSTS RELATING TO
EQUIPMENT AGREEMENT SUPPLEMENT NO.
This Certificate of Costs is executed pursuant to, and incorporates by
reference all of the terms, conditions and provisions of, the Participation
Agreement ("Participation Agreement"), dated as of September 30, 1999,
among ▇▇▇▇▇▇ International Industries, Incorporated ("Obligor"), State
Street Bank and Trust Company of Connecticut, National Association
("Obligee"), Four Winds Funding Corporation ("Lender"), Commerzbank
Aktiengesellschaft, New York Branch ("Agent"), The Bank of Tokyo-
Mitsubishi Trust Company ("Owner Participant"), and BTM Capital
Corporation ("LC Issuer"). Capitalized terms not otherwise defined
herein have the meanings given in the Participation Agreement.
Obligor hereby certifies that each Item of Equipment described on or
attached to the form of Related Equipment Agreement Supplement
delivered herewith and attached hereto (i) has been selected by, delivered
to, inspected by, accepted by and purchased by Obligor, and has been paid
for by Obligor in an amount as indicated on such Related Equipment
Agreement Supplement, and (ii) is free and clear of all Liens other than
Permitted Liens. Original or true and correct copies of all invoices
relating to such Equipment have been previously delivered or are
delivered herewith, in each case identifying the type of equipment, model,
serial or other identification number, where appropriate, and date of
delivery to Obligor. Obligor, Lender, Owner Participant and LC Issuer
hereby agree that each Item of Equipment on the form of Related
Equipment Agreement Supplement attached hereto is accepted to be
Equipment under and subject to all of the terms, conditions and provisions
of the Equipment Agreement.
Dated:
▇▇▇▇▇▇ INTERNATIONAL INDUSTRIES,
INCORPORATED, as Obligor
By:____________________________
Name:
Title:
135
EXHIBIT B
ACKNOWLEDGED AND APPROVED BY:
FOUR WINDS FUNDING CORPORATION,
as Lender,
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY, as Owner Participant
By:___________________________
Name:
Title:
BTM CAPITAL CORPORATION,
as LC ISSUER,
By:___________________________
Name:
Title:
136
FORM OF LEGAL OPINION
September 30, 1999
Commerzbank Aktiengesellschaft,
New York Branch
as Agent and Security Trustee
State Street Bank and Trust Company
of Connecticut, N.A., as
trustee and as Obligee
Four Winds Funding Corporation
as Lender
BTM Capital Corporation,
as LC Issuer
Bank of Tokyo-Mitsubishi Trust Company,
as Owner Participant
Re: Equipment Financing for ▇▇▇▇▇▇ International Industries, Incorporated
We have acted as counsel to ▇▇▇▇▇▇ International Industries,
Incorporated, a Delaware corporation (the "Company"), in connection
with the Equipment Financing Agreement, dated as of September 30,
1999 (the "Equipment Agreement"), by and among the Company and
State Street Bank and Trust Company of Connecticut, N.A., not in its
individual capacity but solely as trustee, and the Participation
Agreement, dated as of September 30, 1999 (the "Participation
Agreement"), among the Company, as Obligor, State Street Bank and
Trust Company of Connecticut, N.A. as trustee and in its individual
capacity as Obligee, BTM Capital Corporation as LC Issuer, Bank of
Tokyo-Mitsubishi Trust Company as Owner Participant, Four Winds
Funding Corporation as Lender and Commerzbank Aktiengesellschaft,
New York Branch, as Agent and Security Trustee.
The opinions expressed below are furnished to you pursuant to
subsection 3.1(j) of the Participation Agreement. Unless otherwise
defined herein, capitalized terms defined Appendix A to the
Participation Agreement and used herein shall have the meanings given
to them in the Appendix A to the Participation Agreement.
In connection with this opinion, we have (i) investigated such questions
of law, (ii) examined originals or certified, conformed or reproduction
copies of such agreements, instruments and documents of the Company
and others, and (iii) received such information from
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ Branch as Agent and Security Trustee;
State Street Bank and Trust Company
of Connecticut, N.A. as trustee
and as Lessor; and Four Winds Funding
Corporation as Lender
September 30, 1999
Page 2
the officers and representatives of the Company and others, as we have
deemed necessary or appropriate for the purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all
natural persons executing documents, the genuineness of all signatures,
the authenticity of original and certified documents and the conformity
to original or certified copies of all copies submitted to us as conformed
or reproduction copies. As to various questions of fact relevant to the
opinions expressed herein, we have relied upon, and assume the
accuracy of, representations and warranties contained in the Operative
Documents and in oral or written statements and other information of or
from representatives of the Company and others and assume compliance
on the part of parties to the Operative Documents with their covenants
and agreements contained therein.
To the extent it may be relevant to the opinions expressed herein, we
have assumed that each party other than the Company has power to
enter into and perform the Operative Documents to which it is a party
and that the Operative Documents have been duly authorized, executed
and delivered by, and constitutes the legal, valid and binding obligation
of, each other party thereto.
Based upon the foregoing, and subject to the qualifications, assumptions
and limitations set forth herein, we are of the opinion that:
1. The Company is duly organized, validly existing and in good
standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to enter into,
transfer all rights and interest in and to finance the Equipment, and to
perform its obligations under, the Operative Documents. Each of the
Operative Documents to which the Company is a party has been duly
authorized, executed and delivered by the Company and constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
3. No consent or authorization of, filing with, notice to, or other act by
or in respect of, any Governmental Entity or any other Person is
required to be made or obtained by the Company in connection with the
selling or leasing under the Operative Documents to which it is a party,
or with the execution, delivery or performance by the Company of the
Operative Documents to which it is a party.
4. Neither the execution nor delivery of the Operative Documents to
which it is a party by the Company nor the performance by the
Company of the transactions therein
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ Branch as Agent and Security Trustee;
State Street Bank and Trust Company
of Connecticut, N.A. as trustee
and as Lessor; and Four Winds Funding
Corporation as Lender
September 30, 1999
Page 3
contemplated will (a) result in a breach or violation by the Company of,
or constitute a default under, any material indenture, material mortgage,
material deed of trust, material loan agreement or other material
agreement or material instrument, in each case known to us, to which
the Company or any of the Company's property is bound, or (b) conflict
with the Certificate of Incorporation or By-laws (each as amended) of
the Company, or (c) result in the violation of (i) any statute or regulation
of the United States, New York or Delaware General Corporation Law
applicable to the Company or any of the Company's properties or (ii)
any order or decree known to us of any Governmental Entity binding on
the Company or any of the Company's properties
5. The Company is not (a) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or (b) a "holding
company" as defined in, or otherwise subject to regulation under, the
Public Utility Holding Company Act of 1935.
(A) Our opinions in paragraph 2 above are subject to (i) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, voidable preference or similar laws, and related judicial
doctrines, from time to time in effect, affecting creditors' rights and
remedies generally and (ii) general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing and
reasonableness, equitable defenses and limits on the availability of
equitable remedies), whether such principles are considered in a
proceeding at law or in equity.
(B) We express no opinion as to the enforceability of any provision
in the Participation Agreement or the Equipment Agreement:
i) relating to indemnification, contribution or exculpation in
connection with violations of any securities or commodities laws or
statutory duties or public policy, or in connection with willful, reckless
or unlawful acts or gross negligence of the indemnified or exculpated
party or the party receiving contribution;
ii) relating to exculpation of any party in connection with its
own negligence that a court would determine in the circumstances under
applicable law to be unfair or insufficiently explicit;
iii) relating to forum selection to the extent the forum is a federal
court;
iv) relating to choice of governing law to the extent that the
enforceability of any such provision is to be determined by any court
other than a
139
court of the State of New York;
v) waiving any rights to trial by jury;
vi) specifying that provisions thereof may be waived only in
writing, to the extent that an oral agreement or an implied agreement by
trade practice or course of conduct has been created that modifies any
provision of the Participation Agreement or Equipment Agreement; or
vii) in any circumstance which would operate to result in a claim
for more than a claimant's actual damages.
(C) Our opinions in paragraph 2 above are subject to the effect of
generally applicable rules of law that:
ii) provide that forum selection clauses in contracts are not
necessarily binding on the court(s) in the forum selected;
iii) limit the availability of a remedy under certain circumstances
when another remedy has been elected;
iv) may, where less than all of a contract may be unenforceable,
limit the enforceability of the balance of the contract to circumstances in
which the unenforceable portion is not an essential part of the agreed
exchange; and
v) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys' fees and other
costs.
(D) For purposes of our opinion in paragraph 1 with respect to the
valid existence and good standing of the Company we have relied
exclusively upon certificates of public officials.
The opinions expressed herein are limited to the federal laws of the
United States of America, the laws of the State of New York and the
Corporation Law of the State of Delaware, as currently in effect,
provided that we express no opinion as to (i) the necessity for the
Company to qualify to do business in any state or (ii) federal or state
laws, rules or regulations that regulate or purport to regulate the
ownership or activities of a particular industry or any other specific
business activity, including, but not limited to, federal or state securities
or commodities laws or with respect to state "bucket shop" or gambling
laws. Our opinions are limited to those expressly set forth herein, and
we express no opinions by implication.
140
The opinions expressed herein are solely for the benefit of the
addressees hereof in connection with the foregoing transaction and may
not be relied on in any manner or for any purpose by any other person
without our prior written consent. We are not assuming any
professional responsibility to any other person by rendering this
opinion. Each of the matters set forth in this opinion is as of the date
hereof, and we undertake no, and hereby disclaim any, obligation to
advise you of any change in any matters set forth herein or in any
matters on which this opinion is based.
Very truly yours,
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
141
[Obligee Opinion]
September 30, 1999
To Each of the Parties
Listed on Schedule I Hereto
Re: ▇▇▇▇▇▇ International Industries, Incorporated
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust Company of
Connecticut, National Association, a national banking association in its
individual capacity ("State Street") and its capacity as Owner Trustee
(the "Owner Trustee") under the Trust Agreement, dated as of
September 30, 1999, (the "Trust Agreement"), between State Street and
Bank of Tokyo-Mitsubishi Trust Company, as Owner Participant (the
"Owner Participant") in connection with the transactions contemplated
by that certain Participation Agreement, dated as of September __, 1999
( the "Participation Agreement") among ▇▇▇▇▇▇ International
Industries, Incorporated, as Obligor, (the "Obligor"), the Owner
Participant, the Owner Trustee, as Obligee, Four Winds Funding
Corporation, as Lender, Commerzbank Aktiengesellschaft, New York
Branch, as Agent and Security Trustee and BTM Capital Corporation,
as Letter of Credit Issuer.. Except as otherwise defined herein, all
capitalized terms used herein shall have the respective meanings set
forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this opinion to you.
Our representation of State Street and the Owner Trustee has been as
special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have
relied, with your permission, entirely upon (i) the representations and
warranties of the parties set forth in the Owner Trustee Documents (as
defined below) and (ii) certificates delivered to us by the management
of State Street and have assumed, without independent inquiry, the
accuracy of those representations, warranties and certificates.
We have examined the Participation Agreement, the Trust
Agreement, the Equipment Agreement, the LC Reimbursement and
Security Agreement and each of the other Operative Documents to
which State Street or the Owner Trustee, as applicable, is a party (the
"Owner Trustee Documents"). We have also examined the Certificate
of the Comptroller of the Currency relating to State Street and originals,
or copies, certified or otherwise identified to our satisfaction, of such
other corporate and public records and agreements, instruments,
certificates and other documents as we have deemed necessary or
appropriate for the purposes of rendering this opinion. For purposes of
our opinion rendered in paragraph 1 below, with respect to the authority
of State Street to transact the business of banking and exercise trust
powers, our opinion relies upon and is limited by such Certificate of the
Comptroller of the Currency.
We have assumed the genuineness of all signatures (other than those
on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than those individuals executing documents on behalf
of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which
we are aware or which are known to us, or with another similar
qualification, the relevant knowledge or awareness is limited to the
actual knowledge or awareness of the individual lawyers in the firm
who have participated directly and substantively in the specific
transactions to which this opinion relates and without any special or
additional investigation undertaken for the purposes of this opinion.
For the purposes of this opinion, we have made such examination of
law as we have deemed necessary for the purposes of this opinion. The
opinions expressed below are limited solely to the internal substantive
laws of the State of Connecticut as applied by courts located in
Connecticut without regard to choice of law and the federal laws of the
United States of America. We express no opinion as to the laws of any
other jurisdiction. No opinion is given herein as to the choice of law or
internal substantive rules of law that any court or other tribunal may
apply to the transactions contemplated by the Owner Trustee
Documents. No opinion is expressed herein as to the application or
effect of federal securities laws or as to the securities or so-called "Blue
Sky" laws of any state or other jurisdiction. In addition, no opinion is
expressed as to matters governed by any law, statute, rule or regulation
of the United States or of any state relating to the acquisition,
ownership, registration, use, operation, maintenance, repair,
replacement or sale of or the nature of the Equipment.
To the extent to which this opinion deals with matters governed by
or relating to the laws of any other state or jurisdiction, we have
assumed, with your permission that the Owner Trustee Documents are
governed by the internal substantive laws of the State of Connecticut.
142
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that (i) each
party to the Owner Trustee Documents, other than State Street or the
Owner Trustee, as applicable, at all times relevant thereto, is validly
existing and in good standing under the laws of the jurisdiction in which
it is organized, and is qualified to do business and in good standing
under the laws of each jurisdiction where such qualification is required
generally or necessary in order for such party to enforce its rights under
such Owner Trustee Documents, and (ii) each party to the Owner
Trustee Documents (other than State Street and the Owner Trustee), at
all times relevant thereto, had and has the full power, authority and legal
right under its certificate of incorporation, partnership agreement,
by-laws, and other governing organizational documents, and the
applicable corporate, partnership, or other enterprise legislation and
other applicable laws, as the case may be, to execute, and to perform its
obligations under, the Owner Trustee Documents.
2. We have assumed without any independent investigation that each of
the Owner Trustee Documents is a valid, binding and enforceable
obligation of each party thereto other than State Street or the Owner
Trustee, as applicable.
3. The enforcement of any obligations of State Street or the Owner
Trustee, as applicable, under any of the Owner Trustee Documents may
be limited (i) in the case of State Street, by the receivership,
conservatorship and supervisory powers of bank regulatory agencies
generally, (ii) as relates to State Street or Owner Trustee, by bankruptcy,
insolvency, reorganization, moratorium, marshaling or other laws and
rules of law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights); and we express no opinion as to the status
under any fraudulent conveyance laws or fraudulent transfer laws of any
of the obligations of State Street or the Owner Trustee, as applicable,
under any of the Owner Trustee Documents.
4. We express no opinion as to the enforceability of any particular
provision of any of the Owner Trustee Documents relating to remedies
after default.
5. We express no opinion as the availability of any specific or equitable
relief of any kind.
6. The enforcement of any of your rights may in all cases be subject to
an implied duty of good faith and fair dealing and to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and, as to any of your rights to collateral
security, will be subject to a duty to act in a commercially reasonable
manner.
7. We express no opinion as to the enforceability of any particular
provision of any of the Owner Trustee Documents relating to (i) waivers
of rights to object to jurisdiction or venue, or consents to jurisdiction or
venue, (ii) waivers of rights to (or methods of) service of process, or
rights to trial by jury, or other rights or benefits bestowed by operation
of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (iv) waivers or variations of provisions which are not
capable of waiver or variation under Sections 1-102(3), 9-501(3) or
other provisions of the Uniform Commercial Code ("UCC") of the State
of Connecticut (the "Connecticut UCC"), (v) the grant of powers of
attorney to any person or entity, (vi) exculpation or exoneration clauses,
indemnity clauses, and clauses relating to releases or waivers of
unmatured claims or rights, (vii) the imposition or collection of interest
on overdue interest or providing for a penalty rate of interest or late
charges on overdue or defaulted obligations, or the payment of any
premium, liquidated damages, or other amount which may be held by
any court to be a "penalty" or a "forfeiture," or (viii) so-called "usury
savings clauses" purporting to specify methods of (or otherwise assure)
compliance with usury laws or other similar laws of any jurisdiction.
8. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this opinion
letter, and we assume no responsibility to inform you of additional or
changed facts, or changes in law, of which we may become aware.
9. No opinion is given herein as to the effect of usury laws (or other
similar laws) of any jurisdiction with respect to the Owner Trustee
Documents.
143
10. We express no opinion as to any requirement that any party to the
Owner Trustee Documents (or any other persons or entities purportedly
entitled to the benefits thereof) qualify or register to do business in any
jurisdiction in order to be able to enforce its rights thereunder or obtain
the benefits thereof.
11. We have made no examination of, and no opinion is given herein as
to the Owner Trustee's or the Owner Participant's title to or other
ownership rights in, the accuracy of the descriptions of, or the existence
of any liens, charges, encumbrances, restrictions or limitations on, or
adverse claims against, the Trust Estate.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule I hereto and their successors and assigns in
connection with the transactions contemplated by the Owner Trustee
Documents and may not be used or relied upon by any other person or
for any other purpose.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
12. State Street is a national banking association validly formed and
existing under the laws of the United States of America, and had and
has the requisite corporate and trust power, authority and legal right to
execute, deliver and perform its obligations under the Trust Agreement
and, as Owner Trustee under the Trust Agreement, to execute, deliver
and perform its obligations under the other Owner Trustee Documents.
13. State Street has duly authorized, executed, and delivered the
Participation Agreement and the Trust Agreement and the Participation
Agreement and the Trust Agreement constitutes the legal, valid and
binding obligation of State Street, enforceable against it in its individual
capacity in accordance with the terms thereof.
14. The Owner Trustee is duly authorized under the Trust Agreement to
execute, deliver and perform each of the Owner Trustee Documents and
each such Owner Trustee Document constitutes a legal, valid and
binding obligation of the Owner Trustee enforceable against the Owner
Trustee in accordance with its terms.
15. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case may
be, of the Owner Trustee Documents, the consummation by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case may
be, of any of the transactions contemplated thereby nor the compliance
by the Owner Trustee, in its individual capacity or as Owner Trustee, as
the case may be, with any of the terms and provisions thereof (i)
requires any approval of its stockholders, any consent or approval of or
the giving of notice to any trustees or holders of any indebtedness or
obligations of it known to us, or (ii) violates its charter documents or
by-laws, or contravenes or will contravene any provision of, or
constitutes a default under, or results in any breach of, or results in the
creation of any lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or credit
agreement, license or other agreement or instrument, in each case,
known to us to which it is a party or by which it is bound or contravenes
any Connecticut or United States applicable law governing the banking
or trust powers of the Owner Trustee, or any judgment or order, in each
case, known to us applicable to or binding on it.
16. No consent, approval, order or authorization of, giving of notice to,
or registration with, or taking of any other action in respect of, any
Connecticut or United States governmental authority regulating the
banking or trust powers of the Owner Trustee, in its individual capacity,
is required for the execution and delivery of, or the carrying out by, the
Owner Trustee in its individual capacity or as Owner Trustee, as the
case may be, of any of the transactions contemplated by the Owner
Trustee Documents, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly obtained,
given or taken.
17. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any
other independent investigation, there are no proceedings or actions
pending or overtly threatened against or affecting the Owner Trustee, in
its individual capacity or as Owner Trustee, before any governmental
authority in which, there is a reasonable possibility of an adverse
decision which could reasonably be expected to affect materially and
144
adversely the ability of the Owner Trustee, in its individual capacity or
as Owner Trustee, as the case may be, to enter into or to perform its
obligations under the Owner Trustee Documents.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
SCHEDULE I
Obligor
▇▇▇▇▇▇ International Industries, Incorporated
Owner Trustee
State Street Bank and Trust Company of Connecticut, National
Association
Owner Participant
Bank of Tokyo-Mitsubishi Trust Company
Lender
Four Winds Funding Corporation
Agent and Security Trustee
Commerzbank Aktiengesellschaft, New York Branch
Letter of Credit Issuer
BTM Capital corporation
145
[Owner Participant Opinion]
146
[Form of Opinion]
RL/SL
September 30, 1999
Commerzbank Aktiengesellschaft, New York Branch
[______________________]
Ladies and Gentlemen:
We have acted as special French counsel to Commerzbank
Aktiengesellschaft, New York Branch ("Commerzbank"), the New
York Branch of a German bank, for French legal matters in connection
with the drafting of: a Convention ▇▇ ▇▇▇▇ Commercial (commercial
pledge agreement) entered into on September ?30], 1999 between State
Street Bank, as Constituant (pledgor), Commerzbank, as Agent des
Sretes (security trustee), and Audax Industries SNC, as Tiers Convenu
(custodian) (the "Pledge Agreement"), pursuant to which State Street
Bank pledges an equipment (the "Equipment") in favor of
Commerzbank.
Capitalized Terms used herein without definition shall have the
meanings assigned to them in the Pledge Agreement.
In rendering this opinion, we have assumed without any independent
investigation or verification the genuineness of all signatures appearing
on the Pledge Agreement, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as copies and the authenticity of the originals of such
copies. We have relied, without any independent investigation or
verification, as to factual matters on the information and representations
in the Pledge Agreement and other documents we have been provided
with.
We have also assumed, without any independent investigation or
verification, that:
(i) each of the parties to the Pledge Agreement (a) is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (b) has the full power and authority to
enter into and perform its obligations under the Pledge Agreement and
(c)
147
has taken all necessary actions to authorize the execution of such Pledge
Agreement and the performance of its obligations thereunder;
(ii) all signatories of the Pledge Agreement have the power and
authority to execute and deliver the Pledge Agreement to which they are
parties on behalf of the respective parties which they represent;
(iii) the obligations secured by the Pledge Agreement (collectively the
"Secured Obligations") constitute legal, valid and binding obligations of
State Street Bank under the laws stated therein to govern them;
(iv) the choice in the Pledge Agreement of the laws of the French
Republic to govern the respective Pledge Agreement and the choice
therein of the jurisdiction of courts of the French Republic are valid and
enforceable against State Street Bank;
(v) State Street Bank has full ownership of the Equipment and has full
right, power and authority to pledge such equipment in accordance with
the provisions of the Pledge Agreement, and
(vi) the Equipment is personal property and shall remain so for the
entire duration of the Pledge Agreement.
In rendering this opinion, we have also assumed that the Equipment
is as of the date hereof free of any lien except the lien granted upon each
equipment pursuant to the Pledge Agreement.
We are rendering this opinion solely as to the laws of the French
Republic where we are admitted as "Avocats au barreau de Paris". No
opinion is given herein as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, and further subject to the
qualifications set forth below, under French law as now is effect and
interpreted by the French courts it is our opinion that:
(1) The execution by the parties to the Pledge Agreement of the said
Pledge Agreement does not contravene any provision of any law or
regulation of the French Republic.
(2) No consent, approval, license, authorization or filing, recording
or registration of or with, or exemption by, any governmental or public
body or authority of the French Republic, or any subdivision thereof, is
required (i) to authorize the execution and performance of the Pledge
Agreement, (ii) to make the Pledge Agreement a legal, valid and
binding agreement, enforceable against State Street Bank in accordance
with its terms, or (iii) to execute or perform the Pledge Agreement.
148
(3) The Pledge Agreement creates a valid security interest in favor of
Commerzbank and constitute a legal, valid and binding agreement,
enforceable against State Street Bank in accordance with its terms.
In addition to the assumptions set forth above, our opinions are
subject to the following qualifications:
(a) We express no opinion as to the possibility of obtaining a court
decision under French law that, in connection with the performance of
an obligation to do or not do something, is expressed in non-monetary
terms.
(b) In the event of any proceeding being brought in a French court in
respect of a monetary obligation expressed to be payable in a currency
other than French Francs, a French court may give judgment as an order
to pay the French Franc equivalent of such currency at the time of actual
payment of the debtor. Furthermore, with respect to a bankruptcy,
insolvency, liquidation, moratorium, reorganization, reconstruction or
similar proceeding, French law requires that all claims or debts be
converted to equivalent French Franc amounts at an exchange rate
determined at the date of the judgment declaring the commencement of
the proceeding.
(c) In respect of payment obligations, a French court has the power
under Article 1244-1 of the French Civil Code to postpone or stagger
payments due by a debtor after taking into account the debtor's situation
and the needs of the creditor, provided that such postponements or
staggering do not exceed two years in the aggregate; the court may also
decide to prescribe the payment of interest (not less than the legal
interest rate (taux legal) in France which, for the year 1999, is 3.47 %
per annum) on any such postponed or staggered payments and that
payments will apply first to principal, then to interest. Pursuant to
Article 1244-2 of the French Civil Code, (i) the decision of a French
court to postpone payments by a debtor in respect of amounts owed to a
creditor will stay enforcement proceedings brought by such creditor
against such debtor, and (ii) overdue interest or other penalties for
overdue payment will not accrue during the postponement period
determined by such court.
(d) Enforcement of the Pledge Agreement may be limited or affected
by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights
generally.
(e) We express no opinion as to any tax issues.
(f) In order to be in proper legal form for use in the courts of the
French Republic, the documents evidencing all Secured Obligations,
which are in the English language, must be translated into French by an
official French translator in order to be submitted (together with such
translation(s)) as evidence or otherwise.
149
This opinion is furnished to you solely for your benefit in connection
with the Pledge Agreement and may not be furnished to or relied upon
by any other person or for any other purpose.
Very truly yours,
150
[Form of Opinion]
RL/SL
September 30, 1999
Commerzbank Aktiengesellschaft, New York Branch
[______________________]
Dear Sirs,
We have acted as German legal advisers to Commerzbank
Aktiengesellschaft, New York Branch ("Commerzbank"), the New
York Branch of a German bank, for German legal matters in connection
with the drafting of:
(i) an Agreement on Chattel Mortgage entered into on [________],
1999 between ▇▇▇▇▇▇ INTERNATIONAL INDUSTRIES,
INCORPORATED, a Delaware corporation, whose registered office is
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇.▇.,
▇▇▇▇▇ ▇.▇.▇. ("▇▇▇▇▇▇") and ▇▇▇▇▇▇'▇ subsidiary ▇▇▇▇▇▇ GmbH
whose registered office is at: ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇;
(ii) an Agreement on Chattel Mortgage entered into on [________],
1999 between Harman and its subsidiary ▇▇▇▇▇▇ AUDIO
ELECTRONIC SYSTEMS GmbH whose registered office is at:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
(iii) an Agreement on Chattel Mortgage entered into on [________],
1999 between Harman and its subsidiary ▇▇▇▇▇▇ AUDIO
ELECTRIC SYSTEMS KFT whose registered office is at: ▇▇▇▇▇ ▇. ▇,
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
The parties to the Agreements referred to in paragraph (i) to (iii)
shall apart from Harman collectively hereinafter be referred to as the
"Subsidiaries".
(iv) an Agreement on Chattel Mortgage entered into on [________],
1999 between Harman and STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
whose principal place of business is at: ▇▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ U.S.A ("State Street Bank").
151
(v) an Agreement on Chattel Mortgage entered into on ?________?,
1999 between State Street Bank and COMMERZBANK
AKTIENGESELLSCHAFT, NEW YORK BRANCH, a company
incorporated according to the laws of Germany, acting through its New
York branch, located: 2 World Financial Center, New York, New York
10281 U.S.A ("Commerzbank").
The documents referred to in paragraph (i) to (v) above shall
collectively hereinafter be referred to as the "Pledge Agreements".
Capitalized Terms used herein without definition shall have the
meanings assigned to them in the Pledge Agreements.
In rendering this opinion, we have assumed without any independent
investigation or verification the genuineness of all signatures appearing
on the Pledge Agreements, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all
documents submitted to us as copies and the authenticity of the originals
of such copies. We have relied, without any independent investigation
or verification, as to factual matters on the information and
representations in the Pledge Agreements and other documents we have
been provided with.
We have also assumed, without any independent investigation or
verification, that:
(i) each of the parties to the Pledge Agreements (a) is duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation, (b) has the full power and authority to enter into and
perform its obligations under the Pledge Agreements and (c) has taken
all necessary actions to authorize the execution of such Pledge
Agreements and the performance of its obligations thereunder;
(ii) all signatories of the Pledge Agreements have the power and
authority to execute and deliver the Pledge Agreements to which they
are parties on behalf of the respective parties which they represent;
(iii) the obligations secured by each Pledge Agreement (collectively
the "Secured Obligations") constitute legal, valid and binding
obligations under the laws stated therein to govern them;
(iv) Harman or its Subsidiaries has full ownership in the Items and
has full right, power and authority to pledge such items in accordance
with the provisions of the respective Agreements on Chattel Mortgage,
and
(vi) the Items are movable property and shall remain so for the entire
duration of the respective Pledge Agreements.
In rendering this opinion, we have also assumed that the Items are as
of the date hereof free of any lien except the lien granted upon the Items
pursuant to the respective Pledge Agreements.
152
We are rendering this opinion solely as to the laws of the Federal
Republic of Germany where we are admitted as "Rechtsanwaelte". No
opinion is given herein as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, and further subject to the
qualifications set forth below, under German law as now is in effect and
interpreted by the German courts it is our opinion that:
(1) The execution by the parties to the Pledge Agreements of the said
Pledge Agreements does not contravene any provision of any law or
regulation of the Federal Republic of Germany.
(2) No consent, approval, license, authorization or filing, recording
or registration of or with, or exemption by, any governmental or public
body or authority of the Federal Republic of Germany, or any
subdivision thereof, is required (i) to authorize the execution, delivery
and performance of the Pledge Agreements, (ii) to make the Pledge
Agreements legal, valid and binding agreements, enforceable in
accordance with their terms, or (iii) to execute, deliver or perform the
Pledge Agreements.
(3) Each of the Pledge Agreements creates a valid security interest in
favor of the respective Mortgagee and constitutes a legal, valid and
binding agreement. However, under German law Commerzbank is the
only party to the Pledge Agreements which is able to enforce its security
interest granted thereunder.
In addition to the assumptions set forth above, our opinions are
subject to the following qualifications:
(a) We express no opinion as to the possibility of obtaining a court
decision under German law that, in connection with the performance of
an obligation to do or not to do something, is expressed in non-
monetary terms.
(b) In the event of any proceeding being brought in a German court
in respect of a monetary obligation expressed to be payable in a
currency other than Deutsche ▇▇▇▇, a German court may give judgment
as an order to pay the Deutsche ▇▇▇▇ equivalent of such currency at the
time of actual payment of the debtor.
(c) Enforcement of the Pledge Agreements may be limited or
affected by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors' rights generally.
(d) Claims may become barred under Section 194 ff. BGB (German
Civil Code) or may become subject to set-off or counterclaim.
This opinion is addressed to and is for the benefit solely of the
addressee of this letter. The opinion is given solely in connection with
the Pledge Agreements and may not be furnished to or relied upon by
any other person or for any other purpose.
153
Yours faithfully,
154
[Form of Opinion]
FFB: RC
[Date]
Commerzbank Aktiengesellschaft, New York Branch
2 World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Four Winds Funding Corporation
c/o Commerzbank Aktiengesellschaft, New York Branch
2 World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs,
We have acted as English legal advisers to [addressee] in connection
with:
(a) a Debenture dated September 30, 1999 between State Street Bank
and Trust Company of Connecticut, National Association and
Commerzbank Aktiengesellschaft, New York Branch (the "Security
Trustee");
(b) a Debenture dated September 30, 1999 between ▇▇▇▇▇▇
International Industries, Incorporated and the Security Trustee; and
(c) a Debenture dated September 30, 1999 between ▇▇▇▇▇▇
International Industries, Limited and the Security Trustee,
(together the "Debentures").
Terms defined in the Debentures are used in this opinion as so
defined.
In connection with this opinion, we have examined executed copies
of the Debentures; we have not examined any other document or made
any other investigation other than as to such matters of English law as
we have deemed appropriate. We express no opinion as to the laws of
155
any jurisdiction other than the laws of England and Wales in effect on
the date of this opinion. This opinion is to be governed by English law.
1. In giving this opinion we have assumed:
(a) the genuineness of all signatures and seals, the completeness and
conformity to originals of all documents purporting to be copies of
originals and the authenticity of the originals of such documents;
(b) that each of the parties to the Debentures is and will be validly
incorporated and existing;
(c) that each of the parties to the Debentures have all necessary
capacity, authority and legal right to enter into the Debentures and
perform its obligations thereunder, that the execution and delivery of the
Debentures by each such party has in each case been duly authorised
and that each of the Debentures has been duly executed and delivered by
each such party to it;
(d) the absence of any other or collateral arrangements between any
of the parties to the Debentures which modify or supersede any of their
terms;
(e) the due compliance with all requirements (including, without
limitation, the obtaining of necessary consents, licences and approvals,
the making of necessary filings and registrations and compliance with
the provisions) of such laws (other than the laws of England and Wales)
as are applicable to the Debentures and the parties thereto, the legality,
validity, binding effect and enforceability of the Debentures under such
laws and that no such laws would affect any of the conclusions in this
opinion; and
(f) that the choice of English law as the law governing the
Debentures has not been made in order to avoid the application of the
laws of a jurisdiction under which any provision of the Debentures
would be illegal.
2. Based upon the foregoing and subject to the matters set out below,
and having regard to such considerations of English law in force as at
the date of this opinion as we consider relevant, we are of the opinion
that:
(a) each of the Debentures constitutes valid, binding and enforceable
obligations of each of the parties thereto.
(b) it is not necessary to file, register or record the Debentures in any
public place in England and Wales.
(c) no ad valorem stamp duty (or documentary taxes other than
standard court fees or nominal stamp duty) is payable in the United
Kingdom in respect of the execution, delivery or enforcement of the
Debentures.
156
(d) We are aware of no reason why the choice of English law to
govern the Debentures should not be recognised as a valid choice of law
under English conflicts of laws and given effect as such by the courts of
England.
(e) No consent, approval or authorisation of, or notice to any
governmental or regulatory authority of England having jurisdiction
with respect to the execution, delivery and performance of the
Debentures is required for the execution and delivery by the parties to
the Debentures or the performance of the transactions on its part
contemplated therein.
(f) The Debentures are effective to create security interests in favour
of the Security Trustee in respect of the assets which are the subject
thereof.
3. This opinion is subject to the following qualifications:
(a) The validity, binding effect and enforceability of the obligations
of the parties under the Debentures respectively may be limited by:
(i) the provisions of any applicable bankruptcy, liquidation,
insolvency, reorganisation, administration or other laws relating to or
affecting the enforcement of creditors' rights generally;
(ii) the provisions of English law applicable to contracts held to have
been frustrated by events happening after their execution; and
(iii) the principle that where any obligation of any person is to be
performed or observed in a jurisdiction outside England and Wales,
such obligation may not be enforceable under English law if and to the
extent that such performance or observance would be illegal under the
laws of such jurisdiction.
(b) Enforcement may be limited by general principles of equity. For
example, equitable remedies may not be available where damages are
considered by the court to be an adequate remedy. Accordingly, the
term "enforceable" in relation to any obligation means that it is of a type
which may be enforced, not that it will be enforced in all circumstances
in accordance with its terms.
(c) Where a party to the Debentures is vested with a discretion in
respect of any calculation, determination or certificate to be made or
given, such calculation, determination or certificate might be held not to
be final, conclusive or binding if the exercise of such discretion could be
shown to have been fraudulent, incorrect or arbitrary or not to have been
given or made by a party acting reasonably or in good faith.
(d) A remedy consequent or right arising upon default may not be
enforceable if construed by any tribunal as being a penalty, particularly
if such remedy involves enforcing an additional pecuniary remedy (such
as default or overdue interest) referable to such default.
(e) An English court may refuse to give effect to a purported
contractual obligation to pay costs imposed upon another party in
respect of the costs of any unsuccessful litigation
157
brought against that party before it and may not award by way of costs
all of the expenditure incurred by a successful litigant in proceedings
brought before that court.
(f) In the event of any proceedings being brought in respect of a
monetary obligation expressed to be payable in a currency other than
pounds sterling, an English court may, in its discretion, decline to give
judgment expressed as an order to pay such currency and may not
enforce the benefit of a currency indemnity clause.
(g) We express no opinion as to the enforceability of any provision
in the Debentures with regard to any United Kingdom stamp duty which
might subsequently become payable or any purported indemnity in
respect of such stamp duty.
(h) Provisions as to severability may not be binding under English
law. The question of whether or not any provision of the Debentures
which is illegal, invalid or unenforceable may be severed from the other
provisions of the Debentures in order to save those other provisions
would be determined by an English court in its discretion.
(i) Claims may become barred under the Limitation ▇▇▇ ▇▇▇▇ or may
be or become subject to set-off or counterclaim.
(j) Provisions in the Debentures providing that their provisions may
only be amended, waived or varied by an instrument in writing may not
be effective.
(k) Provisions exculpating a party from liability or a duty otherwise
owed and provisions imposing obligations of confidentiality may be
overridden by principles of law or equity. While exclusions of liability
for negligence are generally enforceable, they may not be enforceable,
for example, where there has been fraud or bad faith on the part of the
party attempting to enforce the exclusion. Further, exclusions for non-
reliance may not work when there has actually been reliance and the
other party knows this to be the case or there has been some form of
express warranty.
(l) The opinion expressed in 2(b) above is subject to the assumption
that none of the parties to the Debentures has any place of business in
England and Wales and therefore that the Debentures is not required to
be registered pursuant to Section 409 of the Companies ▇▇▇ ▇▇▇▇;
however, it is advisable that, in relation to each of the parties to the
Debentures, the prescribed particulars in respect of each of the
Debentures to which it is a party together with an executed copy thereof
be delivered to the Companies Office in accordance with Chapter 1 of
Part XII of the Companies ▇▇▇ ▇▇▇▇ in order that, even if the prescribed
particulars and such Debentures are not accepted by the register in the
event that such parties subsequently establishes a place of business in
the United Kingdom.
(m) This opinion relates only to English domestic law and not its
conflict of laws rules and, in particular, no opinion is expressed on the
enforceability or effectiveness of any of the Debentures to the extent
that such Debentures purport to create security on assets located outside
England and Wales; in this regard, please note that under the usual
English applications of the principles of the conflicts of law, contractual
or other obligations (including debts) are generally situated in the
jurisdiction in which the contractual or other obligations are
enforceable, which is usually taken to be the jurisdiction in which the
parties to the Debentures reside, and it will be
158
necessary to comply with the laws of that jurisdiction regarding security
in order to obtain an effective security interest in such obligations or
assets.
(n) We express no opinion as to the title of the parties to the
Debentures to the Collateral, as to the nature of the security created by
the Debentures (whether legal or equitable, fixed or floating), as to the
marketability of or rights of enforcement over the Collateral or as to any
defences which might be raised or rights claimed in relation to the
Collateral nor do we express any opinion as to the priority or perfection
of any security created or to be created by, or as to the effect on such
perfection of any stipulation in that regard in, the Debentures.
(o) Provisions in the Debentures permitting service of process
outside the United Kingdom may not be effective unless the prior leave
of an English court has been obtained in respect of such service.
(p) Any suit, action or proceeding against any of the parties hereto
with respect to the Debentures, or any action to enforce any judgement
entered by any court, may only be made where prior leave of an English
court has been obtained in respect of such service.
This opinion (which is strictly limited to the matters stated in this
letter and is not to be read as extending by implication to any other
matters not expressly and specifically referred to in this letter) is
addressed to and is for the benefit solely of the addressee of this letter, is
given solely in connection with the Debentures and may not be relied
upon by any other person or for any other purpose nor may it be quoted
or referred to in any public document.
Yours faithfully,
159
EXHIBIT D
SECURED PROMISSORY NOTE
(For Financing Equipment in accordance with
Equipment Agreement Exhibit A-__ and Equipment Agreement
Supplement No. __)
$________________ _______________ ___, ____
FOR VALUE RECEIVED, STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not
in its individual capacity, but solely as Obligee under a Trust Agreement
dated as of September [30], 1999 (the "Maker"), hereby promises to pay
to FOUR WINDS FUNDING CORPORATION (together with its
successors and assigns, the "Payee") or registered assigns thereof the
principal sum of [DOLLARS] $[_______], plus interest thereon at the
Applicable Debt Rate, on or before the Maturity Date (as defined in
Annex A to the Participation Agreement defined below) in lawful
money of the United States of America and in immediately available
funds. This Note and interest thereon shall be payable on dates, and
principal shall be payable in the amounts, set forth in the Payment and
Amortization schedule attached hereto as Annex A (as such may be
modified or amended in accordance with the terms of the Participation
Agreement defined below). A final payment of all unpaid principal of,
and interest on this Note and all other amounts due and payable with
respect hereto or the Participation Agreement shall be due and payable
on the Maturity Date.
Each payment on this Note described above shall be applied in
accordance with the Participation Agreement, as defined below.
This Note is one of the Notes described in and issued pursuant to the
Participation Agreement dated as of September [ ], 1999 (the
"Participation Agreement") among the Maker, as Obligee, and the
Payee, as Lender, State Street Bank and Trust Company in its individual
capacity, Commerzbank Aktiengesellschaft, New York Branch, as
Agent and Security Trustee, BTM Capital Corporation, as LC Issuer,
Bank of Tokyo-Mitsubishi Trust Company, as Owner Participant and
▇▇▇▇▇▇ International Industries, Inc., as Obligor and is entitled to the
benefits thereof and is subject to the terms and conditions set forth
therein. Upon the occurrence of a Loan Event of Default, the principal
of, Prepayment Premium and accrued interest on, this Note may be
declared to be due and payable in the manner and with the effect
provided in the Participation Agreement. Capitalized terms used in this
Note which are not otherwise defined herein have the meanings set forth
in the Participation Agreement.
In the event any sum payable hereunder is not paid when due (by
acceleration or otherwise), the principal amount hereof and, to the
extent permitted by law, Prepayment Premium, if any, and interest
hereon shall bear interest at the Overdue Rate, in accordance with
Section 5.5.4 of the Participation Agreement. Interest shall be
computed on the basis of a 360-day year for the number of days actually
elapsed.
This Note is subject to the repayment and prepayment provisions set
forth in Section 5 of the Participation Agreement.
The Maker waives presentment, demand, protest or notice of any
kind in connection with this Note,
160
Should the indebtedness represented by this Note or any part thereof
be collected at law or in equity or in bankruptcy, receivership or other
court proceeding or should this Note be placed in the hands of attorneys
for collection after default, the Maker, and any other Person who may
be liable hereunder in any capacity, agree to pay, on demand, in addition
to the principal, the Prepayment Premium, if any, and interest due and
payable hereon, all costs of collecting or attempting to collect this Note,
including attorneys' fees and expenses (including those incurred in
connection with any appeal).
This Note is issued as a registered Note, The Maker and the Payee
may deem and treat the Person in whose name this Note is registered on
the register held at the principal place of business of Agent as the
absolute owner hereof (whether or not this Note shall be overdue) for
the purpose of receiving payments of principal, the Prepayment
Premium, if applicable, and interest and for all other purposes, and the
Maker and the Payee shall not be affected by any notice to the contrary.
In accordance with the provisions of the Participation Agreement, this
Note may be transferred only on such register.
The holder of this Note shall have recourse for all liabilities and
obligations arising under this Note, the Participation Agreement and the
other Loan Documents to the Collateral, all as more particularly set
forth in the Participation Agreement.
Neither this Note nor the Participation Agreement shall require the
payment or permit the collection of interest in excess of the maximum
permitted by law. If any such excess of interest is provided for, or shall
be adjudicated to be so provided for, herein or in the Participation
Agreement, the Maker shall not be obligated to pay such interest in
excess of the maximum amount permitted by law, and the right to
demand the payment of any such excess shall be and hereby is waived.
This provision shall control any other provision of this Note or the
Agreement.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the Maker has caused this Promissory
Note to be signed under seal on the date first above written.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under Trust Agreement dated as of
September 30, 1999
By:_____________________________________
Name:
Title:
161
EXHIBIT D
Payment and Amortization Schedule
Payment Date Principal Payment
(Last LIBOR Banking Day of:)
162
EXHIBIT E
[FORM OF]
FUNDING NOTICE AND INDEMNITY
AGREEMENT
This FUNDING NOTICE AND INDEMNITY AGREEMENT dated
as of ______ __, _____ (this "Agreement") is made among ▇▇▇▇▇▇
INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware
corporation ("Harman"), Bank of Tokyo-Mitsubishi Trust Company
("BTM") and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, N.A. not in its individual capacity but solely as
trustee ("Trustee").
W I T N E S S E T H:
WHEREAS, Harman, BTM, State Street Bank and Trust Company
of Connecticut, N.A. in its individual capacity and in its capacity as
trustee, Four Winds Funding Corporation ("Lender"), Commerzbank
Aktiengesellaschaft, New York Branch and BTM Capital Corporation
have entered into that certain Participation Agreement dated as of
September 30, 1999 (the "Participation Agreement") and Harman and
Trustee have entered into that certain Equipment Financing Agreement
dated as of September 30, 1999 (the "Equipment Agreement")
(capitalized terms not otherwise defined herein shall have the meanings
assigned to them in Appendix A to the Participation Agreement);
WHEREAS, pursuant to the Participation Agreement, Trustee has
agreed, subject to the satisfaction of certain conditions precedent, to pay
to Harman on each Funding Date an amount equal to the aggregate of
the Acquisition Costs of the Equpment to be delivered on such Funding
Date; and
WHEREAS, pursuant to the Participation Agreeement, BTM, as
owner participant, has agreed to provide Trustee on each Funding Date
a portion of the amount to be paid by Trustee to Harman equal to the
aggregate of the Equity Components of the Equipment to be delivered
on such Funding Date (the "Equity Commitment").
NOW, THEREFORE, in order to induce BTM to fund its Equity
Commitment, Harman provides the following notices and agrees with
BTM and Trustee as follows:
11. Harman hereby irrevocably notifies BTM, Trustee, the Lender and
the Agent that with respect to the next Funding Date, (i) the aggregate
amount of the Acquisition Costs for the Equipment to be transferred on
such Funding Date is US$[ ], (ii) the aggregate amount of the
Equity Components of such Equipment is $[ ] and (iii) the
scheduled Funding Date is [ ] (the "Scheduled Funding Date").
Harman hereby requests BTM to establish on the second LIBOR
Banking Day prior to the Scheduled Funding Date, the Equity Rate for
the Equipment to be delivered on the Funding Date (such rate, the
"Initial Eurodollar Rate").
12. In order to facilitate the timely closing of the transactions
contemplated by the Participation Agreement and Equipment
Agreement, Harman hereby irrevocably instructs BTM to wire transfer
no later than 12:00 noon (New York City time) on the Scheduled
Funding Date the amount of the Equity Commitment for such Funding
Date in immediately available funds in
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars to the account of [_______________] as follows
(or such other account which [_______________] shall designate):
Bank:
Account No.:
[Other information]:
13. In the event that for any reason the closing under the Participation
Agreement scheduled on the Scheduled Funding Date does not occur by
3:00 p.m. (New York City time) on such date, Harman and BTM each
instruct Trustee to invest the Equity Commitment amount received by
Trustee from BTM for such Funding Date (the "Advance Funding
Amount") in overnight money-market investments with the income
earned on such investments paid to BTM. Harman agrees to pay
interest on the Advance Funding Amount to BTM for the period from
and including the Scheduled Funding Date to but excluding the earlier
of (i) the date the Advance Funding Amount is released to Harman by
the Trustee pursuant to the Participation Agreement or (ii) 12:00 noon
(New York City time) on the [______] Business Day after the
Scheduled Funding Date (the "Return Time"). Such interest shall
accrue at a rate per annum equal to the Initial Eurodollar Rate and shall
be payable (a) if the closing under the Participation Agreement occurs
before the Return Time, on the first Payment Date after the Funding
Date or (b) if the closing under the Participation Agreement does not
occur before the Return Time, by 10:00 a.m. (New York City time) on
the first Business Day after the Return Time, provided that, in either
case, Harman shall be entitled to a credit against the interest owed on
the Advance Funding Amount in the amount of the income earned on
the investment of the Advance Funding Amount. If the closing under
the Participation Agreement scheduled for the Scheduled Funding Date
does not occur by the Return Time, Harman and BTM hereby instruct
Trustee to transfer to BTM on the first Business Day after the Return
Time the amount of the Equity Commitment received by Trustee for the
Scheduled Funding Date. Further, in the event closing under the
Participation Agreement does not occur by 3:00 p.m. (New York time)
on the Scheduled Funding Date, Harman shall indemnify BTM and hold
BTM harmless from any loss, cost or expense which BTM may sustain
or incur as a result of BTM having made arrangements in the London
interbank market or otherwise to fund its Equity Commitment on the
Scheduled Funding Date and the closing under the Participation
Agreement failing to occur by 3:00 p.m. (New York City time) on that
date.
4. The provisions of Sections 10.3, 10.4, 10.8, 10.10, 10.11, 10.12 and
10.17 of the Participation Agreement are, by this reference, incorporated
herein as if set forth in full herein together with all necessary defined
terms, except that references to the term "Agreement" shall mean this
Agreement.
164
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
▇▇▇▇▇▇ INTERNATIONAL INDUSTRIES, INC.,
By:
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, N.A., not in its individual capacity but solely as
trustee under that certain Trust Agreement dated as of September 30,
1999
By:
Name:
Title:
165
TABLE OF CONTENTS
Page
1. Definitions 1
2. Representations and Warranties 2
2.1.Obligor Representations and Warranties 2
2.2.Obligee Representations and Warranties 5
2.3.Further Obligee Representations and Warranties 6
▇.▇.▇▇▇▇▇ Company Representations and Warranties 7
2.5.Owner Participant Representations and Warranties 8
2.6.Lender Representations and Warranties 9
2.7.Warranty Disclaimers 9
3.Conditions Precedent 10
3.1Obligee Conditions 10
3.2.Lender Conditions 11
4.Transfer Agreement 12
4.1.Owner Participant Commitment 12
4.2.Transfer of Equipment 12
▇.▇.▇▇▇▇▇▇▇▇▇ Agreement Supplements 13
4.4.Ownership; Rights 13
4.5 Funding Dates 14
5. Amount and Terms of Loan 14
5.1 Lender Commitment 14
5.2 Payment to Obligee 14
5.3 Note 15
5.4 Termination of Commitment 15
5.5 Payments 15
5.5.1 Principal 15
5.5.2 Interest 15
5.5.3 Commitment Fee 15
5.5.4 Overdue Rate 15
5.5.5 Payment Instructions 15
5.5.6 Withholding Tax 16
5.5.7 Business Day Convention 16
5.5.8 Increased Costs 16
5.5.9 Illegality 17
5.6 Prepayments Limited 18
5.7 Mandatory Prepayments 18
5.7.1 Event of Loss 18
5.7.2 Transfer of Items of Equipment by Obligor 18
5.7.3 Other Termination of Equipment Agreement 18
5.8 Application of Prepayments 18
5.9 Recalculation of Loan Payment and Amortization Schedule 18
5.10 Loan Events of Default 19
166
Page
5.11 Remedies of Lender 20
5.11.1 Rights in Collateral 20
5.11.2 Insolvency. 21
5.11.3 Delivery of Documents 21
5.11.4 Possession of Collateral 21
5.11.5 Sale of Collateral 22
5.11.6 Discharge 22
5.11.7 Appointment of Receiver 22
5.11.8 Redemption 23
5.11.9 Rights Cumulative; No Waiver 23
5.11.10 Termination of Proceedings 23
6. Covenants 23
6.1 Obligee Covenants 23
6.2 Further Obligee Covenants 25
6.3 Trust Company Covenants 26
6.4 Owner Participant Covenants 27
6.5. Lender and Security Trustee Covenant 27
6.6 Obligor Covenants 27
6.7 Obligor Negative Covenants 28
6.8 Covenant of Lender, Lessor, Agent and
Security Trustee, and Owner Participant 29
7. Security 29
7.1 Security Interest 29
7.2 Consent and Agreement of Obligor 30
7.3 Further Obligee Covenants 30
7.4 Further Assurances 31
7.5 Termination 32
7.6 Other Security 32
7.7 Power of Attorney 32
7.8 Assignment of Rights 33
7.9 Transfer of the Collateral by Lender 33
7.10 No Segregation of Monies; No Interest 33
7.11 Distribution of Moneys 33
7.11.1 Payments under the Equipment Agreement 33
7.11.2 Payments in Respect of an Event of Loss 34
7.11.3 Payment of the Unamortized Debt Balance
of any Item of Equipment 34
7.11.4 Payment upon Final Disposition of the
Items of Equipment 34
7.12 Payments after a Loan Event of Default 34
7.13 Application of Certain Other Payments 35
7.14. Other Payments 35
7.15 Retention of Amounts by Security Trustee 35
8. Indemnities 35
8.1 Obligor General Indemnification 35
8.2. Obligor General Tax Indemnity 37
8.3 Obligee Indemnities 40
8.4 Survival 40
9. Agent for Lender 40
167
Page
9.1 Authorization and Action 40
9.2 Agent's Reliance, etc. 41
9.3 Agent and Affiliates 41
9.4 Lender Credit Decision 41
9.5 Indemnification 41
9.6 Successor Agent 42
9.7 Holder List; Ownership of Notes 42
9A LC Issuer Transfer Option 42
9A.1 42
9A.2 42
10. Miscellaneous 43
10.1 Expenses and Recording 43
10.2 Modification 43
10.3 Governing Law, Jurisdiction and Venue; Waiver of Jury 44
10.4 Notices 44
10.5 Ownership of the Equipment. 45
10.6 Descriptive Headings, etc. 46
10.7 Benefit of Agreement; Assignment 46
10.8 Execution and Effectiveness 46
10.9 Registration 46
10.10 Confidentiality 46
10.11 Survival 47
10.12 Severability 47
10.13 No Broker 47
10.14 Performance by Lender. 48
10.15 Payment from Collateral; Limited Recourse. 48
10.16 No Proceedings. 48
10.17 Concerning Obligee. 48
168