Exhibit 10.70
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SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION
LOAN AND SECURITY AGREEMENT
BY AND AMONG
AMERCO,
A NEVADA CORPORATION
AND
AMERCO REAL ESTATE COMPANY,
A NEVADA CORPORATION
AS BORROWERS,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
▇▇▇▇▇ FARGO FOOTHILL, INC.
AS THE LEAD ARRANGER,
ADMINISTRATIVE AGENT, SYNDICATION AGENT AND COLLATERAL AGENT
DATED AS OF AUGUST 15, 2003
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TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION................................................................ 2
1.1 Definitions........................................................................ 2
1.2 Accounting Terms; GAAP............................................................. 32
1.3 Code............................................................................... 32
1.4 Construction....................................................................... 32
1.5 Schedules and Exhibits............................................................. 33
2. LOAN AND TERMS OF PAYMENT................................................................... 33
2.1 Revolver Advances.................................................................. 33
2.2 Term Loan.......................................................................... 34
2.3 Borrowing Procedures and Settlements............................................... 34
2.4 Payments........................................................................... 41
2.5 Overadvances....................................................................... 44
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations......... 44
2.7 Cash Management.................................................................... 46
2.8 Crediting Payments................................................................. 47
2.9 Designated Account................................................................. 47
2.10 Maintenance of Loan Account; Statements of Obligations............................. 47
2.11 Fees............................................................................... 48
2.12 Letters of Credit.................................................................. 48
2.13 LIBOR Option....................................................................... 51
2.14 Capital Requirements............................................................... 54
2.15 Joint and Several Liability of Borrowers........................................... 54
2.16 Registered Notes................................................................... 56
3. CONDITIONS; TERM OF AGREEMENT............................................................... 57
3.1 Conditions Precedent to the Initial Extension of Credit............................ 57
3.2 Conditions Subsequent to the Initial Extension of Credit........................... 61
3.3 Conditions Precedent to all Extensions of Credit................................... 63
3.4 Term............................................................................... 64
3.5 Effect of Termination.............................................................. 64
3.6 Early Termination by Borrowers..................................................... 64
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(continued)
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4. CREATION OF SECURITY INTEREST............................................................... 65
4.1 Grant of Security Interest......................................................... 65
4.2 Negotiable Collateral and Chattel Paper............................................ 65
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral............. 65
4.4 Delivery of Additional Documentation Required...................................... 66
4.5 Power of Attorney.................................................................. 66
4.6 Right to Inspect................................................................... 67
4.7 Control Agreements................................................................. 67
4.8 Commercial Tort Claims............................................................. 67
4.9 Vehicle Registration............................................................... 68
4.10 Grants, Rights and Remedies........................................................ 69
4.11 No Filings Required................................................................ 69
4.12 Survival........................................................................... 70
5. REPRESENTATIONS AND WARRANTIES.............................................................. 71
5.1 No Encumbrances.................................................................... 71
5.2 [Intentionally Omitted.]........................................................... 71
5.3 [Intentionally Omitted.]........................................................... 71
5.4 Equipment.......................................................................... 71
5.5 Location of Equipment.............................................................. 71
5.6 Equipment Records.................................................................. 71
5.7 Location of Chief Executive Office; FEIN; Organizational ID Number................. 71
5.8 Due Organization and Qualification; Subsidiaries; Affiliates....................... 71
5.9 Due Authorization; No Conflict..................................................... 72
5.10 Litigation......................................................................... 74
5.11 Financial Statements............................................................... 74
5.12 [Intentionally Omitted.]........................................................... 74
5.13 Employee Benefits.................................................................. 74
5.14 Environmental Condition............................................................ 75
5.15 Brokerage Fees..................................................................... 75
5.16 Intellectual Property.............................................................. 75
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TABLE OF CONTENTS
(continued)
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5.17 [Intentionally Omitted.]........................................................... 75
5.18 DDAs............................................................................... 75
5.19 Complete Disclosure................................................................ 75
5.20 Indebtedness, Etc. ................................................................ 76
5.21 Interim Order...................................................................... 76
5.22 Reservation Management System...................................................... 76
5.23 Administrative Priority............................................................ 76
5.24 Appointment of Trustee or Examiner; Liquidation.................................... 76
6. AFFIRMATIVE COVENANTS....................................................................... 76
6.1 Accounting System.................................................................. 76
6.2 Collateral Reporting............................................................... 76
6.3 Financial Statements, Reports, Certificates........................................ 77
6.4 Guarantor Reports.................................................................. 79
6.5 Documents Filed with the Court or Delivered to the U.S. Trustee or Committee....... 79
6.6 Maintenance of Properties.......................................................... 79
6.7 Taxes.............................................................................. 79
6.8 Insurance.......................................................................... 80
6.9 Location of Equipment.............................................................. 80
6.10 Compliance with Laws............................................................... 81
6.11 Leases............................................................................. 81
6.12 Brokerage Commissions.............................................................. 81
6.13 Existence.......................................................................... 81
6.14 Environmental...................................................................... 81
6.15 Disclosure Updates................................................................. 82
6.16 Material Contracts; Affiliate Contracts............................................ 82
6.17 Employee Benefits.................................................................. 82
6.18 Real Estate........................................................................ 83
7. NEGATIVE COVENANTS.......................................................................... 83
7.1 Indebtedness, Etc. ................................................................ 83
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TABLE OF CONTENTS
(continued)
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7.2 Liens.............................................................................. 84
7.3 Restrictions on Fundamental Changes................................................ 84
7.4 Disposal of Assets................................................................. 85
7.5 Change Name........................................................................ 85
7.6 Guarantee.......................................................................... 85
7.7 Nature of Business................................................................. 85
7.8 Prepayments and Amendments......................................................... 85
7.9 Change of Control.................................................................. 86
7.10 [Intentionally Omitted.]........................................................... 86
7.11 Distributions...................................................................... 86
7.12 Accounting Methods................................................................. 86
7.13 Formation of Subsidiaries; Investments............................................. 86
7.14 Transactions with Affiliates....................................................... 87
7.15 Suspension......................................................................... 87
7.16 [Intentionally Omitted.]........................................................... 87
7.17 Use of Proceeds.................................................................... 87
7.18 Change in Location of Chief Executive Office; Equipment with Bailees............... 87
7.19 Securities Accounts................................................................ 88
7.20 Financial Covenants................................................................ 88
7.21 No Prohibited Transactions Under ERISA............................................. 90
7.22 Sales and Leasebacks............................................................... 91
7.23 Interim Financing Order; Final Financing Order; Administrative Expense
Priority; Lien Priority; Payments.................................................. 91
8. EVENTS OF DEFAULT........................................................................... 92
9. THE LENDER GROUP'S RIGHTS AND REMEDIES...................................................... 95
9.1 Rights and Remedies................................................................ 95
9.2 Remedies Cumulative................................................................ 97
10. TAXES AND EXPENSES.......................................................................... 98
11. WAIVERS; INDEMNIFICATION.................................................................... 98
11.1 Demand; Protest; etc............................................................... 98
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TABLE OF CONTENTS
(continued)
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11.2 The Lender Group's Liability for Collateral........................................ 98
11.3 Indemnification.................................................................... 98
12. NOTICES..................................................................................... 99
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.................................................. 100
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.................................................. 101
14.1 Assignments and Participations..................................................... 101
14.2 Successors......................................................................... 105
15. AMENDMENTS; WAIVERS......................................................................... 105
15.1 Amendments and Waivers............................................................. 105
15.2 Replacement of Holdout Lender...................................................... 107
15.3 No Waivers; Cumulative Remedies.................................................... 107
16. AGENT; THE LENDER GROUP..................................................................... 107
16.1 Appointment and Authorization of Agent............................................. 107
16.2 Delegation of Duties............................................................... 108
16.3 Liability of Agent................................................................. 108
16.4 Reliance by Agent.................................................................. 109
16.5 Notice of Default or Event of Default.............................................. 109
16.6 Credit Decision.................................................................... 109
16.7 Costs and Expenses; Indemnification................................................ 110
16.8 Agent in Individual Capacity....................................................... 111
16.9 Successor Agent.................................................................... 111
16.10 Lender in Individual Capacity...................................................... 111
16.11 Withholding Taxes.................................................................. 112
16.12 Collateral Matters................................................................. 113
16.13 Restrictions on Actions by Lenders; Sharing of Payments............................ 115
16.14 Agency for Perfection.............................................................. 115
16.15 Payments by Agent to the Lenders................................................... 115
16.16 Concerning the Collateral and Related Loan Documents............................... 115
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information............................................. 116
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(continued)
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16.18 Several Obligations; No Liability.................................................. 117
16.19 [Intentionally Omitted.]........................................................... 117
16.20 Additional Agents.................................................................. 117
16.21 Quebec Security.................................................................... 117
17. GENERAL PROVISIONS.......................................................................... 118
17.1 Effectiveness...................................................................... 118
17.2 Section Headings................................................................... 119
17.3 Interpretation..................................................................... 119
17.4 Severability of Provisions......................................................... 119
17.5 Amendments in Writing.............................................................. 119
17.6 Counterparts; Telefacsimile Execution.............................................. 119
17.7 Revival and Reinstatement of Obligations........................................... 119
17.8 Integration........................................................................ 119
17.9 Parent as Agent for Borrowers...................................................... 120
17.10 Confidentiality.................................................................... 120
17.11 Agent as Party in Interest......................................................... 121
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance Agreement
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit B-2 Budget
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Affiliate Contracts
Schedule A-2 Agent's Account
Schedule C-1 Commercial Tort Claims
Schedule C-2 Commitments
Schedule D-1 Designated Account
Schedule E-1 Excluded Assets
Schedule G-1 Guarantors
Schedule M-1 Material Contracts
Schedule P-1 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule S-1 Senior Claims
Schedule S-2 Surplus Real Property Collateral
Schedule W-1 WPCarey Transaction
Schedule 2.7(a) Cash Management Banks
Schedule 3.1(w) Contracts with SAC Holding, SSI or PMSR
Schedule 3.1(ee) Book Value of Trucks
Schedule 3.2(h) Zoning Letters
Schedule 3.2(i) Subordinated, Non-Disturbance and Attornment Agreements
Schedule 3.2(j) AREC Transfer Properties
Schedule 5.7 Chief Executive Office; FEIN; Organizational ID Number
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' and Guarantors' Subsidiaries
Schedule 5.8(d) Subscriptions; Options; Warrants
Schedule 5.8(e) Affiliates
Schedule 5.10 Litigation
Schedule 5.13 Employee Benefits
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20(a) Indebtedness as of the Closing Date
Schedule 5.20(b) TRAC Lease Transactions as of the Closing Date
SENIOR SECURED SUPER-PRIORITY DEBTOR-IN-POSSESSION
LOAN AND SECURITY AGREEMENT
THIS SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION LOAN
AND SECURITY AGREEMENT (this "Agreement"), is entered into as of August 15,
2003, between and among, on the one hand, the lenders identified on the
signature pages hereof (such lenders, together with their respective successors
and assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), ▇▇▇▇▇ FARGO FOOTHILL, INC., a California
corporation, as the lead arranger, administrative agent, syndication agent and
collateral agent for the Lenders ("Agent") and, on the other hand, AMERCO, a
Nevada corporation ("Parent"), and AMERCO REAL ESTATE COMPANY, a Nevada
corporation ("AREC") (AREC and Parent are referred to hereinafter each
individually as a "Borrower," and individually and collectively, jointly and
severally, as "Borrowers").
WHEREAS, on June 20, 2003 (the "Parent Relief Date"), Parent
filed a voluntary petition for relief pursuant to Chapter 11 of the Bankruptcy
Code in the United States Bankruptcy Court for the District of Nevada (the
"Court"), and Parent continues to operate its business and manage its properties
as debtor-in-possession pursuant to Section 1107 and 1108 of the Bankruptcy
Code; and
WHEREAS, on August 14, 2003 (the "Second Relief Date"), AREC
filed voluntary petitions for relief pursuant to Chapter 11 of the Bankruptcy
Code with the Court, and such Borrowers continue to operate their respective
businesses and manage their properties as debtors-in-possession pursuant to
Section 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, Borrowers have requested that the Lenders provide a
senior secured, super-priority debtor-in-possession revolving and term loan
credit facility of up to $300,000,000 to fund ongoing working capital
requirements of Borrowers, to refinance certain indebtedness of Borrowers
arising prior to the Second Relief Date, and for other general corporate
purposes of Borrowers, and the Lenders are willing to provide such financing to
Borrowers in accordance with and subject to the terms and conditions set forth
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the agreements, provisions
and covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrowers, Agent and
the Lenders do hereby agree as follows:
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, Chattel Paper,
or a General Intangible.
"Accounts" means any Person's now owned or hereafter acquired
right, title, and interest with respect to "accounts" as such term is defined in
the Code, and any and all Supporting Obligations in respect thereof.
"ACH Transactions" means any cash management or related
services (including the Automated Clearing House processing of electronic funds
transfers through the direct Federal Reserve Fedline system) provided by a Bank
Product Provider for the account of Administrative Borrower or its Subsidiaries.
"Additional Documents" has the meaning set forth in Section
4.4.
"Adequate Protection Liens" means, to the extent approved by
order of the Court, (a) a lien under Section 361(2) of the Bankruptcy Code in
favor of BMO Global Capital Solutions, Inc. ("BMO") and Citibank, N.A.
("Citibank"), as the agents under certain synthetic lease facilities owned and
managed by AREC, on a pari passu basis, on all property owned by AREC other than
property which is currently encumbered by the BMO and Citibank synthetic lease
facilities, which lien shall secure only the amount of any actual diminution in
the value of each such party's interest in its existing collateral during the
pendency of the Chapter 11 Case, and (b) a lien under Section 361(2) of the
Bankruptcy Code, in favor of the Existing Secured Lender in the real property
and improvements owned by Subsidiaries of AREC, which lien shall secure only the
amount of any actual diminution in the value during the pendency of the Chapter
11 Case of the Existing Secured Lender's interests in intercompany receivables
owed AREC by any direct or indirect Subsidiary of Parent; provided, the liens
under clauses (a) and (b) above shall at all times be junior and subordinate to
the Lien of Agent securing the Obligations.
"Administrative Borrower" has the meaning set forth in Section
17.9.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of Section 7.14 hereof: (a) any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed to control such Person, (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person, and (c) each
partnership
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or joint venture in which a Person is a partner or joint venturer shall be
deemed to be an Affiliate of such Person.
"Affiliate Contracts" means each of the agreements set forth
on Schedule A-1 which shall include any agreement to which any Loan Party is a
party, on the one hand, and any Affiliate of such Loan Party is a party, on the
other hand, as such agreements are in place as of the Closing Date.
"Agency Letter" means that certain letter agreement executed
and delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and Agent, the form and substance
of which are reasonably satisfactory to Agent.
"Agent" means Foothill, solely in its capacity as
administrative agent and collateral agent for the Lenders hereunder, and any
successor thereto.
"Agent Advances" has the meaning set forth in Section
2.3(e)(i).
"Agent's Account" means the account identified on Schedule
A-2.
"Agent's Liens" means the Liens granted by Borrowers and
Guarantors to Agent under this Agreement or the other Loan Documents.
"Agent-Related Persons" means Agent, together with its
Affiliates, officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"AREC" has the meaning set forth in the recitals of this
Agreement.
"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance
Agreement in the form of Exhibit A-1.
"Authorized Person" means any officer or employee of
Administrative Borrower.
"Availability" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrowers are entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations (other than
Bank Product Obligations) and all sublimits and reserves applicable under this
Agreement).
"Avoidance Actions" means actions available to the bankruptcy
estate of Borrowers in the Chapter 11 Case pursuant to Sections 502(d), 544,
545, 547, 548, 549, 550 or 551 of the Bankruptcy Code.
"Bank Product" means any financial accommodation extended to
Administrative Borrower or its Subsidiaries by a Bank Product Provider (other
than pursuant to this Agreement)
3
including: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) transactions under Hedge
Agreements.
"Bank Product Agreements" means those agreements entered into
from time to time by Administrative Borrower or its Subsidiaries with a Bank
Product Provider in connection with the obtaining of any of the Bank Products.
"Bank Product Obligations" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Administrative
Borrower or its Subsidiaries to any Bank Product Provider pursuant to or
evidenced by the Bank Product Agreements and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all such amounts
that Administrative Borrower or its Subsidiaries are obligated to reimburse to
Agent or any member of the Lender Group as a result of Agent or such member of
the Lender Group purchasing participations from, or executing indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Administrative Borrower or
its Subsidiaries.
"Bank Product Provider" means ▇▇▇▇▇ Fargo or any of its
Affiliates.
"Bank Product Reserves" means, as of any date of
determination, the lesser of (a) zero, and (b) the amount of reserves that Agent
has established (based upon the Bank Product Providers' reasonable determination
of the credit exposure in respect of then extant Bank Products) for Bank
Products then provided or outstanding.
"Bankrupt Subsidiaries" means, collectively, Fourteen PAC
Company, a Nevada corporation, Fifteen PAC Company, a Nevada corporation, and
INW Company, a Washington corporation.
"Bankruptcy Code" means Title 11 of the United States Code, as
in effect from time to time.
"Bankruptcy Professionals" means (a) professionals retained by
any Borrower in connection with the Chapter 11 Case, (b) to the extent not
included in clause (a) above, other Persons appointed pursuant to Sections 327,
330, 331 and 1103 of the Bankruptcy Code, and (c) professionals retained by the
Committee, in each case, as appointed by the Court.
"Base LIBOR Rate" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/100%), to be the rate at which Dollar deposits (for
delivery on the first day of the requested Interest Period) are offered to major
banks in the London interbank market on or about 11:00 a.m. (California time) 2
Business Days prior to the commencement of the applicable Interest Period, for a
term and in an amount comparable to the Interest Period and amount of the LIBOR
Rate Loan requested (whether as an initial LIBOR Rate Loan or as a conversion of
a Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.
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"Base Rate" means, the rate of interest announced within ▇▇▇▇▇
Fargo at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of ▇▇▇▇▇ Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as ▇▇▇▇▇ Fargo may designate.
"Base Rate Loan" means each portion of an Advance or the Term
Loan that bears interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means 1.00 percentage points.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA
Affiliate of any Borrower has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"Board of Directors" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf thereof.
"Books" means any Person's now owned or hereafter acquired
books and records (including all of its Records indicating, summarizing, or
evidencing its assets (including the Collateral) or liabilities, all of any
Person's Records relating to its or their business operations or financial
condition, and all of its goods or General Intangibles related to such
information).
"Borrower" and "Borrowers" have the respective meanings set
forth in the preamble to this Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances
(or term loans, in the case of the Term Loan) made on the same day by the
Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing
Loan, or by Agent in the case of an Agent Advance, in each case, to
Administrative Borrower.
"Borrowing Base" means, as of any date of determination, the
result of:
(a) 40.0% of the Fair Market Valuation, minus
(b) the sum of (i) the Bank Product Reserves, (ii) the
Environmental Remediation Reserve, (iii) the Title Reserve and
(iv) the aggregate amount of other reserves, if any,
established by Agent under Section 2.1(b).
"Borrowing Base Certificate" means a certificate in the form
of Exhibit B-1 delivered by the chief financial officer of Parent to Agent.
"Budget" means the operating budget of Borrowers relative to
Borrowers' operations in the Chapter 11 Case, delivered to and accepted by the
Agent on behalf of the Lender Group on the Second Relief Date, in substantially
the same form as Exhibit B-2 attached hereto, together with any replacement
budget delivered thereafter that is satisfactory to the Agent and the Required
Lenders in their Permitted Discretion.
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"Business Day" means any day that is not a Saturday, Sunday,
or other day on which banks are authorized or required to close in the State of
California, except that, if a determination of a Business Day shall relate to a
LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to any Person for
any period, gross expenditures that are capital expenditures as determined in
accordance with GAAP for such period, whether such expenditures are paid in cash
or financed; minus lease funding received pursuant to operating and capital
lease commitments for such period; minus Net Dispositions for such period.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP.
"Carve-Out Amount" means an aggregate amount equal to the sum
of (a) $5,000,000, plus (b) the Holdback Amount; provided, however, that such
amount shall not include (a) professional fees and expenses payable to
Bankruptcy Professionals that are accrued and paid prior to the Maturity Date,
or (b) fees payable to the U.S. Trustee in the Chapter 11 Case pursuant to the
Bankruptcy Code, 28 U.S.C. Section 1930, or other similar statute mandating
payment of U.S. Trustee fees.
"Carve-Out Expenses" means fees and expenses payable (a) to
Bankruptcy Professionals, and (b) pursuant to 28 U.S.C. Section 1930 in
connection with the Chapter 11 Case, provided, that Carve-Out Expenses shall not
include any other claims that are or may be senior to or pari passu with any of
the Carve-Out Expenses.
"Cash Collateral" has the meaning ascribed to such term in
Section 363(a) of the Bankruptcy Code.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) demand Deposit Accounts maintained with any
bank organized under the laws of the United States or any state thereof so long
as the amount
6
maintained with any individual bank is less than or equal to $100,000 and is
insured by the Federal Deposit Insurance Corporation, and (f) Investments in
money market funds substantially all of whose assets are invested in the types
of assets described in clauses (a) through (e) above.
"Cash Management Account" has the meaning set forth in Section
2.7(a).
"Cash Management Agreements" means those certain cash
management agreements, in form and substance satisfactory to Agent, including
without limitation the cash management agreement with respect to the
Concentration Account, each of which is among the Administrative Borrower or one
of its Subsidiaries, Agent, and one of the Cash Management Banks.
"Cash Management Bank" has the meaning set forth in Section
2.7(a).
"Certificate(s) of Title" has the meaning set forth in Section
4.9(a).
"Change of Control" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than
Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 10%, or more, of the Stock of
Parent having the right to vote for the election of members of the Board of
Directors, or (b) a majority of the members of the Board of Directors do not
constitute Continuing Directors, or (c) any Borrower ceases to own, directly or
indirectly, and control 100% of the outstanding capital Stock of any of its
Subsidiaries extant as of the Closing Date unless the disposition, liquidation
or merger of such Subsidiary was permitted by Section 7.3 hereof.
"Chapter 11 Case" means the voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code filed by Borrowers in the Court on June
20, 2003, with respect to Parent, and August 14, 2003, with respect to AREC and
consolidated for purposes of administration only in the Chapter 11 case of
Parent.
"Chattel Paper" means any Person's now owned or hereafter
acquired right, title and interest in respect of "chattel paper" as such term is
defined in the Code, including, without limitation, any tangible or electronic
chattel paper.
"Closing Date" means the date of the making of the initial
Advance (or other extension of credit) hereunder.
"Code" means the New York Uniform Commercial Code, as in
effect from time to time.
"Collateral" means all of each Borrower's now owned or
hereafter acquired right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
7
(c) Chattel Paper,
(d) Commercial Tort Claims,
(e) Deposit Accounts,
(f) Equipment,
(g) General Intangibles,
(h) Inventory,
(i) Investment Property,
(j) Negotiable Collateral,
(k) Real Property Collateral,
(l) Supporting Obligations,
(m) money, cash, Cash Equivalents, or other assets of
each such Borrower that now or hereafter come into the possession, custody, or
control of any member of the Lender Group,
(n) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Chattel Paper,
Deposit Accounts, Equipment, General Intangibles, Inventory, Investment
Property, Negotiable Collateral, Real Property, Supporting Obligations, money,
deposit accounts, or other tangible or intangible property resulting from the
sale, exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof; and
(o) to the extent not included in the foregoing, all
other personal property of Borrowers of any kind or description;
provided, however, that the Excluded Assets shall not be included in the
Collateral.
"Collateral Access Waiver" means a waiver contained in the
Interim Order and the Final Order with respect to any lessor, warehouseman,
processor, consignee, or other Person in possession of, having a Lien upon, or
having rights or interests in the Collateral.
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds) of Borrowers.
"Commercial Tort Claims" means any Person's now owned or
hereafter acquired right, title and interest with respect to any "commercial
tort claim" as such term is defined in the Code, including, without limitation,
the commercial tort claims listed on Schedule C-1, but specifically excluding
the PWC Litigation.
8
"Commitment" means, with respect to each Lender, its Revolver
Commitment, its Term Loan Commitment or its Total Commitment, as the context
requires, and, with respect to all Lenders, their Revolver Commitments, their
Term Loan Commitments, or their Total Commitments, as the context requires, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-2 or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Committee" means the official committee of unsecured
creditors formed, appointed or approved by the U.S. Trustee in the Chapter 11
case.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer of Parent to
Agent.
"Concentration Account" means account number 42-4903 of U-Haul
maintained at Bank One, Arizona or such other deposit account (located in the
United States) established by Borrower with the consent of Agent.
"Consent" means the written approval or consent to the
transactions contemplated by this Agreement and the Loan Documents duly executed
and delivered by the Existing Secured Lender, or the inclusion of such
provisions in the Interim Order and the Final Order as may be acceptable to
Agent.
"Consolidated" means, with respect to Parent, the
consolidation of the income statement accounts of Parent's Subsidiaries with
those of Parent, all in accordance with GAAP, provided, that "consolidated" will
not include (i) the consolidation of the accounts of SAC Holding with the
accounts of Parent but for the inclusion of interest income earned on the Junior
Notes of SAC Holding and management fees earned by U-Haul related to properties
it manages that are owned by SAC Holding; and (ii) the consolidation of the
accounts of the Insurance Subsidiaries with the accounts of Parent but for the
inclusion of pre-tax net income earned by (or losses of) the Insurance
Subsidiaries.
"Consolidated Charges" means, for any period, any
extraordinary and/or non-recurring Consolidated charges of Parent for such
period in an aggregate amount not to exceed $50,000,000 per year or $10,000,000
in each of the first two fiscal quarters following the Closing Date, and
$20,000,000 in each of the next two succeeding fiscal quarters, including
restructuring charges, payments to restructuring financial advisors and legal
counsel, non-cash impairment of asset charges and other non-cash write-off's
that were deducted in arriving at Consolidated Net Income.
"Consolidated Cash Interest Expense" means, for any period,
the Consolidated interest expense of Parent paid in cash for such period
(including, without limitation, the Unused Line Fees, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capitalized Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of a Letter of Credit or bankers'
acceptance financing and net payment pursuant to Hedge Agreements), provided
that Consolidated Cash Interest Expense shall exclude interest expense accrued
or capitalized during such period.
9
"Consolidated EBITDA" means, for any period, the sum, without
duplication, of (i) Consolidated Net Income for such period; plus (ii)
Consolidated Interest Expense for such period; plus (iii) provision for
Consolidated taxes of Parent based on income or profits for such period (to the
extent such income or profits were included in computing the Consolidated Net
Income for such period); plus (iv) Consolidated depreciation, amortization and
other non-cash expense of Parent; plus (v) Consolidated Charges in each case
that were deducted in determining the Consolidated Net Income for such period;
minus (vi) pre-tax net income of the Insurance Subsidiaries; plus (vii) losses
of the Insurance Subsidiaries; minus (viii) gains from sales of any Real
Property; plus (ix) losses from sales of any Real Property.
"Consolidated EBITDAR" means, for any period, the sum of
Consolidated EBITDA, plus, to the extent deducted in computing Consolidated Net
Income for such period and to the extent not added back to Consolidated Net
Income in the calculation of Consolidated EBITDA for such period, Consolidated
rent expense of Parent in connection with operating leases as determined in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the
Consolidated interest expense of Parent for such period, whether paid, accrued
or capitalized (including, without limitation, amortization of original issue
discount, non-cash interest payments, Unused Line Fees, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capitalized Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of a Letter of Credit or bankers'
acceptance financing and net payments pursuant to Hedge Agreements).
"Consolidated Net Income" means, for any period, the net
income of Parent for such period, determined in accordance with GAAP, provided
that such net income is calculated pursuant to the income statement presentation
set forth in the definition of "Consolidated".
"Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent (as such terms are used in Rule 14a-11 under the
Exchange Act) and whose initial assumption of office resulted from such contest
or the settlement thereof.
"Control Agreement" means a control agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by
Administrative Borrower or one of its Subsidiaries, Agent, and the applicable
securities intermediary with respect to a Securities Account or a bank with
respect to a Deposit Account.
"Copyright Security Agreement" means that certain copyright
security agreement executed and delivered by all Borrowers and Guarantors that
own copyrights as of the Closing Date, and Agent, the form and substance of
which are reasonably satisfactory to Agent.
10
"Court" has the meaning set forth in the recitals of this
Agreement.
"Credit Card Agreements" means those certain agreements
between Agent and the credit card processors of Borrowers or Guarantors pursuant
to which such credit card processors agree to transfer on a daily basis all
credit card receipts of Borrowers or Guarantors, as applicable, into the
Concentration Account or other Cash Management Account acceptable to Agent.
"Daily Balance" means, with respect to any Obligation and each
day during the term of this Agreement, the amount of such Obligation owed at the
end of such day.
"DDA" means any checking or other demand deposit account
maintained by any Borrower.
"Dealer List" has the meaning set forth in Section 6.2(d).
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first
3 days from and after the date the relevant payment is due, and (b) thereafter,
at the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin) applicable thereto.
"Deposit Accounts" means any Person's now owned or hereafter
acquired right, title and interest with respect to any "deposit account" as such
term is defined in the Code, including, without limitation, any DDAs.
"Designated Account" means that certain DDA of Administrative
Borrower identified on Schedule D-1.
"Designated Account Bank" means the designated institution
that has been designated as such on Schedule D-1 or has otherwise been
designated as such, in writing, by Borrowers to Agent.
"Disbursement Letter" means an instructional letter executed
and delivered by Administrative Borrower to Agent regarding the initial
extensions of credit to be made on the Closing Date, the form and substance of
which are reasonably satisfactory to Agent.
"Dollars" or "$" means United States dollars.
"Dormant Subsidiaries" means, collectively, EJOS, Inc., an
Arizona corporation, Japal, Inc., a Nevada corporation, M.V.S., Inc., a Nevada
corporation, Pafran, Inc., a Nevada corporation, Sophmar, Inc., a Nevada
corporation, Picacho Peak Investments Co, a Nevada corporation, and U-Haul
Inspections, Ltd., a British Columbia company.
11
"Drawdown Date" means the earlier of (a) August 29, 2003, or
(b) three Business Days after Agent's receipt of a written notice from
Administrative Borrower requesting the advance of the Term Loan.
"Due Diligence Letter" means the due diligence letter sent by
Agent's counsel to Administrative Borrower, together with Administrative
Borrower's completed responses to the inquiries set forth therein, the form and
substance of such responses to be reasonably satisfactory to Agent.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender that was party hereto as of the Closing Date, including, without
limitation, a fund or account managed by such Lender or an Affiliate of such
Lender or its investment manager (a "Related Fund"), (e) so long as no Event of
Default has occurred and is continuing, any other Person approved by Agent and
Administrative Borrower (which approval of Administrative Borrower shall not be
unreasonably withheld, delayed or conditioned), and (f) during the continuation
of an Event of Default, any other Person approved by Agent.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower or any predecessor in interest, (b) from adjoining
properties or businesses, or (c) from or onto any facilities which received
Hazardous Materials generated by any Borrower or any predecessor in interest.
"Environmental Indemnity Agreements" means, collectively,
those certain environmental indemnity agreements executed and delivered by
Borrowers and Guarantors in favor of Agent, for the benefit of the Lender Group
and the Bank Product Providers, in form and substance reasonably satisfactory to
Agent.
"Environmental Law" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy, or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on
Borrowers, relating to the environment, employee health and safety, or Hazardous
Materials, including CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et
12
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
U.S.C. Section 11001 et seq.; the Hazardous Material Transportation Act, 49
U.S.C. Section 1801 et seq.; and the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq. (to the extent it regulates occupational exposure to
Hazardous Materials); any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Environmental Remediation Reserve" means a reserve against
Availability, in an amount determined by Agent upon consultation with its
environmental experts, with respect to environmental remediation costs for
certain of the Real Property Collateral, as the amount of such reserve may
increase or decrease from time to time in Agent's Permitted Discretion;
provided, however, the amount of such reserve established by Agent as of the
Closing Date shall not (a) increase without prior consultation with Borrowers,
or (b) decrease without the consent of the Required Lenders.
"Equipment" means any Person's now owned or hereafter acquired
right, title, and interest with respect to equipment, machinery, machine tools,
motors, furniture, furnishings, fixtures, Vehicles, tools, parts, goods (other
than consumer goods, farm products, or Inventory), wherever located, including
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower or a Subsidiary of a Borrower under IRC Section 414(b), (b) any trade
or business subject to ERISA whose employees are treated as employed by the same
employer as the employees of a Borrower or a Subsidiary of a Borrower under IRC
Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which a Borrower or a Subsidiary of a Borrower is a member
under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with a Borrower or a Subsidiary of a Borrower and whose employees
are aggregated with the employees of a Borrower or a Subsidiary of a Borrower
under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan, (b) the withdrawal of any Borrower, any of
any Borrower's Subsidiaries or
13
ERISA Affiliates from a Benefit Plan during a plan year in which it was a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c) the
providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1), (2)
or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of Borrower, any of Borrower's Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any plan under Section
401(a)(29) of the IRC by any Borrower or any of its Subsidiaries or any of their
ERISA Affiliates.
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to the difference between (a) the
lesser of (i) the Borrowing Base or (ii) the sum of (1) the Maximum Revolver
Amount plus (2) the Term Loan Amount, and (b) the Obligations then outstanding.
"Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.
"Excluded Assets" means (i) the Avoidance Actions, (ii)
Borrowers' Real Property subject to the Synthetic Leases, (iii) the Junior Notes
and proceeds received from the monetization of Junior Notes, (iv) Borrowers'
intercompany receivables subject to the Lien of Existing Secured Lender, (v) all
Real Property set forth on Schedule E-1 under contract of sale, (vi) all Real
Property subject to a first priority Lien of Oxford as of the Closing Date, as
set forth on Schedule E-1, (vii) sale proceeds from the WPCarey Transaction to
the extent such sale proceeds are fully utilized in such transaction, and (viii)
any and all proceeds from any settlement, judgment or other recovery from the
PWC Litigation.
"Existing Secured Lender" means JP MorganChase Bank, as
Administrative Agent for the Lenders under that certain 3-Year Credit Agreement
dated as of June 28, 2002.
"Fair Market Valuation" means the most recent fair market
valuation acceptable to the Lender Group (and determined at the direction or
request of Agent or the Lender Group by a third party appraiser acceptable to
the Lender Group) of the Real Property Collateral acceptable to Agent which is
subject to a valid and perfected first priority Agent's Lien, subject only to
Permitted Liens.
"Family Member" means, with respect to any individual, any
other individual having a relationship by blood (to the second degree of
consanguinity) marriage, or adoption to such individual.
"Family Trusts" means, with respect to any individual, trusts
or other estate planning vehicles established for the benefit of such individual
or Family Members of such individual and in respect of which such individual
serves as trustee or in a similar capacity.
14
"Fee Letter" means that certain fee letter, dated as of even
date herewith, between Borrowers and Agent, in form and substance satisfactory
to Agent.
"FEIN" means Federal Employer Identification Number.
"Final Order" means the order of the Court entered in the
Chapter 11 Case after a final hearing under Bankruptcy Rule 4001(c)(2), in form
and substance reasonably satisfactory to Agent or the Lender Group, as set forth
in Section 3.2(b), and from which no appeal has been timely filed, or if timely
filed, such appeal has been dismissed (unless Agent, on behalf of the Required
Lenders, waives such requirement), together with all extensions, modifications
and amendments thereto, that, among other matters but not by way of limitation,
authorizes Borrowers to obtain credit and incur Indebtedness, and grant Liens
under this Agreement and the other Loan Documents in favor of Agent to secure
the Obligations, as the case may be, and provides for the super-priority of
Agent's and the Lenders' claims, all as set forth in such Final Order.
"Final Order Date" means the date that the Final Order is
entered by the Court.
"FIRREA" means Financial Institutions Reform, Recovery and
Enforcement Act, as in effect from time to time.
"Fixed Charges" means, for any period, the sum, without
duplication, of (i) Consolidated Cash Interest Expense, (ii) principal payments
paid during such period in respect of Indebtedness (excluding principal payments
made with the proceeds of the initial Advance on the Closing Date and proceeds
of the Term Loan), (iii) all federal, state, and local income taxes paid in cash
during such period, and (iv) dividends paid in cash during such period.
"Fixed Charge Coverage Ratio" means, with respect to Parent on
a Consolidated basis for any period, the ratio of (i) Consolidated EBITDA for
such period minus Capital Expenditures made (to the extent not already incurred
in a prior period) or incurred during such period, to (ii) Fixed Charges for
such period.
"Foothill" means ▇▇▇▇▇ Fargo Foothill, Inc., a California
corporation.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section
2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Intangibles" means any Person's now owned or
hereafter acquired right, title, and interest with respect to general
intangibles (as that term is defined in the Code), including payment
intangibles, contract rights, rights to payment, rights arising under common
law, statutes, or regulations, choses or things in action, goodwill, patents,
trade names, trademarks, servicemarks, copyrights, blueprints, drawings,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or licensing
agreements, infringement claims, computer programs, information
15
contained on computer disks or tapes, software, literature, reports, catalogs,
pension plan refunds, pension plan refund claims, insurance premium rebates, tax
refunds, and tax refund claims, and any and all Supporting Obligations in
respect thereof, and any other personal property other than goods, money,
Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Investment
Property, and Negotiable Collateral.
"General Syndication Closing Date" has the meaning set forth
in Section 14.1(k) hereof.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, bylaws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantor" and "Guarantors" means U-Haul, all Subsidiaries of
U-Haul, and all Subsidiaries of AMERCO, other than AREC, the Insurance
Subsidiaries and any Subsidiary formed under the laws of a jurisdiction outside
of the United States and Canada, Storage Realty, L.L.C., a Texas limited
liability company, the Bankrupt Subsidiaries, and the Dormant Subsidiaries. As
of the Closing Date, all Guarantors are listed on Schedule G-1.
"Guarantor Security Agreement" means, collectively, one or
more security agreements, hypothecs or other similar agreements executed and
delivered by Guarantors and Agent, the form and substance of which are
reasonably satisfactory to Agent.
"Guaranty" means, collectively, one or more general continuing
guaranty agreements executed and delivered by Guarantors in favor of Agent, for
the benefit of the Lender Group and the Bank Product Providers, in form and
substance reasonably satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedge Agreement" means any and all agreements, or documents
now existing or hereafter entered into by Administrative Borrower or its
Subsidiaries that provide for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging
Administrative Borrower's or
16
its Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.
"Holdback Amount" means, as of any date of determination prior
to the Maturity Date, the unpaid fees (provided that such fees do not exceed 20%
of the total fees on any statement) owed to any Bankruptcy Professional by
Borrowers (as calculated pursuant to the Court order approving the procedure for
interim compensation for such Bankruptcy Professional), provided that, with
respect to such fees incurred, (a) the services of such Bankruptcy Professional
were provided prior to the Maturity Date, (b) a statement for such services has
been delivered to Agent within 15 days after the end of each quarter in which
the services were performed, and (c) (i) there has been no objection filed with
the Court by Borrowers, the U.S. Trustee, the Committee, Agent, or any Lender
with respect to such fees, or (ii) a fee application has been approved by the
Court.
"Holdout Lender" has the meaning set forth in Section 15.2.
"Indebtedness" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations as a lessee under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of a Person or its
Subsidiaries, irrespective of whether such obligation or liability is assumed,
(e) all obligations to pay the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations under Hedge
Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Insurance Subsidiaries" means, collectively, Oxford and
RepWest.
"Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, however,
that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e)
17
below) to the next succeeding Business Day, (b) interest shall accrue at the
applicable rate based upon the LIBOR Rate from and including the first day of
each Interest Period to, but excluding, the day on which any Interest Period
expires, (c) any Interest Period that would end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (d) with respect to an Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period), the Interest Period shall end on the last Business Day of
the calendar month that is 1, 2, or 3 months after the date on which the
Interest Period began, as applicable, and (e) Borrowers (or Administrative
Borrower on behalf thereof) may not elect an Interest Period which will end
after the Maturity Date.
"Interim Order" means the order of the Court entered in the
Chapter 11 Case after a hearing, in form and substance reasonably satisfactory
to the Lender Group, which, among other matters but not by way of limitation,
authorizes Borrowers to obtain credit and incur Indebtedness on an interim
basis, grants Liens under this Agreement and the other Loan Documents, as the
case may be, in favor of Agent to secure the Obligations, and provides for the
super-priority of Agent's and the Lenders' claims, all as set forth in such
Interim Order.
"Interim Order Date" means the date that the Interim Order is
entered by the Court.
"Inventory" means any Person's now owned or hereafter acquired
right, title, and interest with respect to inventory, including goods held for
sale or lease or to be furnished under a contract of service, goods that are
leased by such Person as lessor, goods that are furnished by such Person under a
contract of service, and raw materials, work in process, or materials used or
consumed in such Person's business, including, without limitation, supplies and
embedded software.
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Investment Property" means any Person's now owned or
hereafter acquired right, title, and interest with respect to "investment
property" as that term is defined in the Code, and any and all Supporting
Obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"IRS" means the Internal Revenue Service of the United States
and any successor thereto.
"Issuing Lender" means Foothill or any other Lender that, at
the request of Administrative Borrower and with the consent of Agent agrees, in
such Lender's sole discretion,
18
to become an Issuing Lender for the purpose of issuing L/Cs or L/C Undertakings
pursuant to Section 2.12.
"Junior Notes" means those promissory notes issued by SAC
Holding to Nationwide Commercial Co., an Arizona corporation, U-Haul and Oxford
prior to the Closing Date.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section
2.12(a).
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Borrower or
its Subsidiaries under any of the Loan Documents that are paid or incurred by
the Lender Group, (b) out of pocket fees or charges paid, advanced or incurred
by Agent in connection with the Lender Group's transactions with Borrowers or
their Subsidiaries, including, fees or charges for photocopying, notarization,
couriers and messengers, telecommunication, public record searches (including
tax lien, litigation, and Uniform Commercial Code searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication, appraisal
(including periodic Collateral appraisals or appraisals of any other collateral
securing the obligations, business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement,
real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) costs and expenses incurred by Agent in the
disbursement of funds to or for the account of Borrowers or other members of the
Lender Group (by wire transfer or otherwise), (d) charges paid or incurred by
Agent resulting from the dishonor of checks, (e) reasonable costs and expenses
paid or incurred by the Lender Group to correct any default or enforce any
provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) audit fees and expenses of Agent related to
audit examinations of the Loan Parties' Books to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement,
(g) reasonable costs and expenses of third party claims or any other suit paid
or incurred by the Lender Group, in either case in connection with enforcing or
defending the Loan Documents or in connection with the transactions contemplated
by the Loan Documents or the Lender Group's relationship with any Borrower or
any Subsidiary of a Borrower, (h) Agent's and each Lender's reasonable fees and
expenses (including attorneys' fees) incurred in advising, structuring,
drafting, reviewing, administering, syndicating or
19
amending the Loan Documents, (i) fees and expenses of any financial advisor or
consultant retained by the Lender Group in connection with the Chapter 11 Case,
and (j) Agent's and each Lender's reasonable fees and expenses (including
attorneys', accountants', consultants', and other advisors' fees and expenses)
incurred in terminating, enforcing (including attorneys' accountants',
consultants', and other advisors' fees and expenses incurred in connection with
the Chapter 11 Case or any other "workout," "restructuring," or any other
Insolvency Proceeding concerning any Borrower or in exercising rights or
remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral or any other collateral securing the Obligations.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, attorneys and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of Credit
plus 100% of the amount of outstanding time drafts accepted by an Underlying
Issuer as a result of drawings under Underlying Letters of Credit.
"LIBOR Deadline" has the meaning set forth in Section
2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
L-1.
"LIBOR Option" has the meaning set forth in Section 2.13(a).
"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/16%) by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
"LIBOR Rate Loan" means each portion of an Advance or the Term
Loan that bears interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means 3.50 percentage points.
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset,
irrespective of whether (a) such interest shall be based on the common law,
statute, or contract, (b) such interest shall be recorded or perfected, and (c)
such interest shall be contingent upon the occurrence of some future event or
events or the existence of some future circumstance or circumstances, without
limiting the generality of the foregoing, the term "Lien" includes the lien or
security interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-
20
of-way, covenants, conditions, restrictions, leases, and other title exceptions
and encumbrances affecting Real Property.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement (together with all
exhibits and schedules hereto), the Agency Letter, the Bank Product Agreements,
the Cash Management Agreements, the Consent, the Control Agreements, the
Copyright Security Agreement, the Credit Card Agreements, the Disbursement
Letter, the Due Diligence Letter, the Environmental Indemnity Agreements, the
Fee Letter, the Final Order, the Guarantor Security Agreement, the Guaranty, the
Interim Order, the Letters of Credit, the Mortgages, the Officers' Certificate,
the Patent and Trademark Security Agreement, the Quebec Pledge Agreement, the
Stock Pledge Agreement, any note or notes executed by a Borrower in connection
with this Agreement and payable to a member of the Lender Group, and any other
agreement entered into, now or in the future, by any Borrower or any Guarantor
in connection with this Agreement.
"Loan Party" means any Borrower or any Guarantor, and "Loan
Parties" means all Borrowers and all Guarantors.
"Loan Pledgee" has the meaning set forth in Section 14.1(j).
"Loan Pledgor" has the meaning set forth in Section 14.1(j).
"Major Space Leases" means lease agreements pursuant to which
the proposed demised premises exceeds 5,000 square feet and the proposed term
thereof, inclusive of all extensions and renewals, exceeds 5 years.
"Management Agreements" means, collectively, those certain
property management agreements between Subsidiaries of U-Haul, on the one hand,
and any of SAC Holding or SSI, on the other hand.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrowers and their
Subsidiaries (other than the Insurance Subsidiaries) taken as a whole, (b) a
material impairment of a Borrower's or Subsidiary of a Borrower's ability to
perform its obligations under the Loan Documents to which it is a party or of
the Lender Group's ability to enforce the Obligations or realize upon the
Collateral or any other collateral securing the Obligations, or (c) a material
impairment of the enforceability or priority of the Agent's Liens with respect
to the Collateral or any other collateral securing the Obligations as a result
of an action or failure to act on the part of a Borrower or a Subsidiary of a
Borrower.
"Material Contracts" means the agreements set forth on
Schedule M-1, which include each of the agreements (a) filed in connection with
any Loan Party's SEC Filings and in existence as of the Closing Date, and (b)
those agreements to which any Loan Party is a party and the loss or breach of
which by such Loan Party would result in a Material Adverse Change, as such
agreements are in existence on the Closing Date or as amended to the extent
permitted hereunder.
21
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means (a) from the Interim Order
Date to the Final Order Date, $25,000,000, and (b) thereafter, $250,000,000.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Borrower or a Guarantor in favor of Agent, for the benefit of the Lender Group
and the Bank Product Providers, in form and substance reasonably satisfactory to
Agent, that encumber the Real Property Collateral and the related improvements
thereto.
"Multiemployer Plan" means a "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA) to which Parent, any of its Subsidiaries, or any
ERISA Affiliate has contributed, or was obligated to contribute, within the past
six (6) years.
"Negotiable Collateral" means any Person's now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, and documents,
and any and all Supporting Obligations in respect thereof.
"Net Disposition" means the aggregate amount of Net Proceeds
received from the disposition of any Equipment that is a capital asset during
any period.
"Net Proceeds" means, with respect to any asset disposition by
Parent or any Subsidiary of Parent or any proceeds from casualty insurance
received by Parent or any Subsidiary or any issuance by Parent or any Subsidiary
of Parent of Stock, the aggregate amount of cash or Cash Equivalents received
for such assets or Stock, net of (a) reasonable and customary transaction costs
and expenses, (b) transfer taxes (including sales and use taxes), (c) amounts
payable to holders of applicable Permitted Liens hereunder to the extent that
such Permitted Liens, if any, are senior in priority to the Agent's Liens, (d)
an appropriate reserve for income taxes in accordance with GAAP, and (e)
appropriate amounts to be provided as a reserve against liabilities or otherwise
held in escrow in association with any such disposition, in each case clauses
(a) though (e) to the extent the amounts so deducted are properly attributable
to such transaction and payable (or reserved) by Parent or any Subsidiary of
Parent in connection with such disposition or loss or the issuance of Stock,
including without limitation reasonable and customary commissions and
underwriting discounts, to a Person that is not an Affiliate of Parent or such
Subsidiary.
"Obligations" means (a) all loans (including the Term Loan),
Advances, debts, principal, interest, contingent reimbursement obligations with
respect to outstanding Letters of Credit, premiums, liabilities (including all
amounts charged to Borrowers' Loan Account pursuant hereto), obligations, fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses, lease payments, guaranties, covenants, and duties of any kind
and description owing by Borrowers to the Lender Group pursuant to or evidenced
by the Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all Lender Group Expenses that Borrowers are required to pay or
22
reimburse by the Loan Documents, by law, or otherwise, and (b) all Bank Product
Obligations. Any reference in this Agreement or in the Loan Documents to the
Obligations shall include all amendments, changes, extensions, modifications,
renewals replacements, substitutions, and supplements, thereto and thereof, as
applicable.
"Officers' Certificate" means the representations and
warranties of officers form submitted by Agent to Administrative Borrower,
together with Administrative Borrower's completed responses to the inquiries set
forth therein, the form and substance of such responses to be reasonably
satisfactory to Agent.
"Organizational ID Number" means, with respect to any Person,
the organizational identification number assigned to such Person by the
applicable governmental unit or agency of the jurisdiction of organization or
formation of such Person.
"Originating Lender" has the meaning set forth in Section
14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
"Oxford" means Oxford Life Insurance Company, an Arizona
corporation, and its Subsidiaries, whether now existing or hereafter formed.
"Parent" has the meaning set forth in the preamble to this
Agreement.
"Participant" has the meaning set forth in Section 14.1(e).
"Participant Register" has the meaning set forth in Section
14.1(i).
"Patent and Trademark Security Agreement" means that certain
patent and trademark security agreement executed and delivered by all Borrowers
and Guarantors that own patent or trademarks as of the Closing Date, and Agent,
the form and substance of which are reasonably satisfactory to Agent.
"Permitted Discretion" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Dispositions" means (a) sales or other dispositions
by Administrative Borrower or its Subsidiaries of Equipment that is
substantially worn, damaged, or obsolete in the ordinary course of business, as
determined by Administrative Borrower, (b) the use or transfer of money or Cash
Equivalents by Administrative Borrower or its Subsidiaries in a manner that is
not prohibited by the terms of this Agreement or the other Loan Documents, (c)
the licensing by Administrative Borrower or its Subsidiaries, on a non-exclusive
basis, of patents, trademarks, copyrights, and other intellectual property
rights in the ordinary course of business, (d) sales or dispositions of any
Excluded Asset, (e) sales or dispositions of Surplus Real Property Collateral,
so long as the Net Proceeds received for such Surplus Real Property Collateral
are not less than 55% of the Fair Market Valuation for such Surplus Real
Property Collateral, as set forth on Schedule S-2, and the Net Proceeds from
such sale are delivered to Agent to be applied to the outstanding Obligations in
accordance with the provisions of this Agreement, (f) leases and licenses of
self-storage units to customers in the ordinary course of business, (g) the
granting of
23
billboard and cell tower leases on any Real Property, (h) the granting of space
leases in the ordinary course of business that do not constitute Major Space
Leases, (i) dispositions required in connection with condemnations or takings,
or dispositions in lieu thereof, where the just compensation paid on account
thereof does not exceed $250,000, (j) sales of investment assets by the
Insurance Subsidiaries, including, without limitation, bonds, real estate,
partnership interests, and security interest in Real Property, (k) so long as no
Event of Default has occurred and is continuing, dispositions of box-trucks,
vans and pickup trucks in the ordinary course of Administrative Borrower's and
U-Haul's fleet rotation program, so long as the book value of box-trucks and
pickup trucks subject to Agent's Liens does not at any time decrease by more
than $50,000,000 in the aggregate from the book value of such box-trucks and
pickup trucks subject to Agent's Liens, as of the Closing Date set forth on
Schedule 3.1(ee) (excluding decreases solely from depreciation charges on such
trucks), (l) the granting of Permitted Easements, (m) so long as no Default has
occurred and is then continuing, the sale in the ordinary course of business of
Vehicles acquired within the previous 130 days in connection with a TRAC Lease
Transaction to the extent the obligations thereunder are permitted by this
Agreement, and (n) other dispositions in an aggregate amount not to exceed
$2,500,000 per year.
"Permitted Easements" means (a) easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the use, repair, or maintenance of any
Real Property as herein provided and (b) if required by applicable Governmental
Authority, the dedication or transfer of unimproved portions of any Real
Property for road, highway or other public purposes; so long as, in each case
(i) such grant, dedication or transfer does not materially impair the value of
remaining useful life of the applicable Real Property or the fair market value
of such Real Property or materially impair or interfere with the use or
operations thereof, (ii) such grant, dedication or transfer, in Administrative
Borrower's business judgment, is reasonably necessary in connection with the
use, maintenance, alteration or improvement of the applicable Real Property and
(iii) such grant, dedication or transfer will not cause the applicable Real
Property or any portion thereof to fail to comply with the provisions of the
Loan Documents and all Applicable Law.
"Permitted Holder" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇, and their Family Members, and their Family Trusts.
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents, (b) Investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) Investments in any of the Insurance Subsidiaries in an
aggregate amount not to exceed $95,000,000 in the aggregate provided such
Investment is approved by the Court and is required to maintain compliance with
the minimum capital requirements or demands proscribed by the Arizona Department
of Insurance or other applicable Governmental Authorities, (e) Investments by
any Loan Party in any other Loan Party; provided, to the extent such Investment
is in the form of Indebtedness, such Indebtedness shall be unsecured, (f)
Investments by the Insurance Subsidiaries from their respective portfolios in
the ordinary course of business, including, without limitation, Investments in
bonds, real estate, partnership interests, and security interests in Real
Property, (g) Investments by U-Haul, Oxford and Nationwide Commercial Co.
evidenced by the Junior Notes not to exceed the principal amount outstanding
thereunder as of the Closing Date (except for increases in principal resulting
solely from the accrual of interest thereon), and (h) payments
24
by U-Haul and its Subsidiaries of expenses on behalf of SAC Holdings pursuant to
the Management Agreements, to the extent such payments are allowed by the Court
and provided that all such expenses are promptly reimbursed by the appropriate
other parties to the Management Agreements, and (i) other Investments in an
aggregate amount not to exceed $2,500,000 per year.
"Permitted Liens" means (a) Liens held by Agent for the
benefit of Agent and the Lenders, (b) Liens for unpaid taxes that (i) are not
yet delinquent, (ii) to the extent non-payment thereof is permitted by the
Bankruptcy Code or (iii) are the subject to a Permitted Protest so long as
adequate reserves with respect thereto have been established in accordance with
GAAP, (c) Liens set forth on Schedule P-1, (d) (i) the interests of lessors
under operating leases (other than operating leases under a TRAC Lease
Transaction), and (ii) the interests of lessors in Vehicles under TRAC Lease
Transactions to the extent the obligations thereunder are permitted by this
Agreement; (e) purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Purchase Money
Indebtedness permitted hereunder and so long as such Lien attaches only to the
asset purchased or acquired and the proceeds thereof, (f) Liens arising by
operation of law in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, incurred in the ordinary course of business
and not in connection with the borrowing of money, and which Liens are
subordinate to the Liens of Agent and the Lenders pursuant to the Interim Order
and the Final Order; provided that if any such Lien arises from the nonpayment
of such claims or demand when due, such claims or demands do not exceed the
amounts, if any, set forth in the Interim Order or the Final Order, (g) Liens
arising from deposits made in connection with obtaining worker's compensation or
other unemployment insurance, (h) Liens or deposits to secure performance of
bids, tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, (i) Liens granted as security for surety
or appeal bonds in connection with obtaining such bonds in the ordinary course
of business, (j) Liens with respect to the Real Property Collateral that are
exceptions to the commitments for title insurance issued in connection with the
Mortgages, as accepted by Agent, or are set forth in the preliminary title
reports delivered to Agent with respect to Real Property Collateral owned by
Borrowers, as accepted by Agent, (k) with respect to any Real Property,
Permitted Easements, (l) Liens arising after the Second Relief Date from
judgments and attachments in connection with court proceedings provided that the
attachment or enforcement of such Liens would not result in an Event of Default
hereunder and such Liens are subject to a Permitted Protest and no material
Collateral is subject to a material risk of loss or forfeiture and the claims in
respect of such Liens are fully covered by insurance (subject to ordinary and
customary deductibles) and a stay of execution pending appeal or proceeding for
review is in effect, (m) Liens for Carve-Out Expenses not exceeding the Carve
Out Amount, (n) Liens securing Senior Claims, and (o) the Adequate Protection
Liens.
"Permitted Protest" means the right of Administrative Borrower
or any of its Subsidiaries, as applicable, to protest any Lien (other than any
such Lien that secures the Obligations), taxes (other than payroll taxes or
taxes that are the subject of a United States federal tax lien), or rental
payment, provided that (a) a reserve with respect to such obligation is
established on such Person's Books in such amount as is required under GAAP, (b)
any such protest is instituted promptly and prosecuted diligently by
Administrative Borrower or any of its Subsidiaries, as applicable, in good
faith, and (c) Agent is satisfied that, while any such protest is
25
pending, there will be no impairment of the enforceability, validity, or
priority of any of the Agent's Liens.
"Person" means any natural person, corporation, limited
liability company, limited partnership, general partnership, limited liability
partnership, joint venture, trust, land trust, business trust, or other
organization, irrespective of whether it is a legal entity, and any government
and agency or political subdivision thereof.
"Personal Property Collateral" means all Collateral other than
Real Property.
"PBGC" means the Pension Benefit Guaranty Corporation as
defined in Title IV of ERISA, or any successor thereto.
"Pledge" has the meaning set forth in Section 14.(j).
"PMSR" means Private Mini Storage Realty, L.P., a Texas
limited partnership.
"PMSR Support Documents" means, collectively, (i) that certain
Support Party Agreement dated as of December 30, 1997 by and between Parent and
PMSR in favor of JPMorganChase Bank, as administrative agent, as successor to
The Chase Manhattan Bank, (ii) that certain Non-Exoneration Agreement dated as
of March 3, 2003 between Parent and JPMorganChase Bank, as administrative agent,
and (iii) that certain Support Party Agreement dated as of February 28, 2003 by
and between Parent and PM Preferred Properties, L.P. in favor of GMAC Commercial
Holding Corp., as administrative agent, as amended by the First Amendment to
Support Party Agreement dated as of June 13, 2003, in each case as amended from
time to time with the approval of the Court (provided such amendment does not
increase the obligations of any Loan Party thereunder).
"Projections" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements together with
appropriate supporting details and a statement of underlying assumptions, all
prepared on a basis consistent with the presentation set forth in the definition
of "Consolidated" and on a basis consistent with Parent's financial statements
delivered to Lenders prior to the Closing Date.
"Pro Rata Share" means, as of any date of determination:
(a) with respect to a Lender's obligation to make
Advances and receive payments of principal, interest, fees, costs, and expenses
with respect thereto, (i) prior to the Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender's Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii)
from and after the time that the Revolver Commitments have been terminated or
reduced to zero, the percentage obtained by dividing (y) the aggregate
outstanding principal amount of such Lender's Advances by (z) the aggregate
outstanding principal amount of all Advances,
(b) with respect to a Lender's obligation to participate
in Letters of Credit, to reimburse the Issuing Lender, and to receive payments
of fees with respect thereto, (i) prior to the Revolver Commitments being
terminated or reduced to zero, the percentage obtained by
26
dividing (y) such Lender's Revolver Commitment, by (z) the aggregate Revolver
Commitments of all Lenders, and (ii) from and after the time that the Revolver
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (y) the aggregate outstanding principal amount of such Lender's
Advances by (z) the aggregate outstanding principal amount of all Advances,
(c) with respect to a Lender's obligation to make the
Term Loan and receive payments of interest, fees, and principal with respect
thereto, (i) prior to the making of the Term Loan, the percentage obtained by
dividing (y) such Lender's Term Loan Commitment, by (z) the aggregate amount of
all Lenders' Term Loan Commitments, and (ii) from and after the making of the
Term Loan, the percentage obtained by dividing (y) the principal amount of such
Lender's portion of the Term Loan by (z) the principal amount of the Term Loan,
and
(d) with respect to all other matters as to a particular
Lender (including the indemnification obligations arising under Section 16.7),
the percentage obtained by dividing (i) such Lender's Revolver Commitment plus
the outstanding principal amount of such Lender's portion of the Term Loan, by
(ii) the aggregate amount of Revolver Commitments of all Lenders plus the
outstanding principal amount of the Term Loan; provided, however, that in the
event the Revolver Commitments have been terminated or reduced to zero, Pro Rata
Share under this clause shall be the percentage obtained by dividing (A) the
outstanding principal amount of such Lender's Advances plus such Lender's
ratable portion of the Risk Participation Liability with respect to outstanding
Letters of Credit plus the outstanding principal amount of such Lender's portion
of the Term Loan, by (B) the outstanding principal amount of all Advances plus
the aggregate amount of the Risk Participation Liability with respect to
outstanding Letters of Credit plus the outstanding principal amount of the Term
Loan.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"PWC Litigation" means that certain claim filed by
Administrative Borrower against PricewaterhouseCoopers on or about June 5, 2003
in the Superior Court of Arizona, Maricopa County, No. CV2003-011032, and all
related disputes between Administrative Borrower and PricewaterhouseCoopers.
"Qualified Cash" means, as of any date of determination, the
amount of unrestricted cash and Cash Equivalents of Borrowers and their
Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any
combination thereof, and which such Deposit Account or Securities Account is the
subject of a Control Agreement and is maintained by a branch office of the bank
or securities intermediary located within the United States.
"Quebec Pledge Agreement" means that certain pledge agreement
executed and delivered by U-Haul (Canada) and Agent, the form and substance of
which are reasonably satisfactory to Agent.
27
"Real Property" means any estates or interests in real
property now owned or hereafter acquired by any Loan Party and the improvements
thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1 and any Real Property hereafter acquired by
a Loan Party.
"Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Redirection Notice" had the meaning set forth in Section
14.1(j).
"Register" has the meaning set forth in Section 14.1(h).
"Registered Loan" has the meaning set forth in Section 2.16.
"Registered Note" has the meaning set forth in Section 2.16.
"Related Fund" has the meaning set forth in clause (d) of the
definition of Eligible Transferee.
"Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 U.S.C. Section 9601.
"Report" has the meaning set forth in Section 16.17.
"Reportable Event" means any of the events described in
Section 4043(c) of ERISA or the regulations thereunder other than a Reportable
Event as to which the provision of 30 days' notice to the PBGC is waived under
applicable regulations.
"Replacement Lender" has the meaning set forth in Section
15.2.
"RepWest" means Republic Western Insurance Company, an Arizona
corporation, and its Subsidiaries, whether now existing or hereafter formed.
"Required Availability" means that the sum of (a) Excess
Availability plus (b) Qualified Cash exceeds $40,000,000.
"Required Lenders" means, at any time, Lenders whose Pro Rata
Shares aggregate 51% of the Total Commitments, or if the Commitments have been
terminated irrevocably, 51% of the Obligations (other than Bank Product
Obligations) then outstanding.
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"Reservation Management System" means the software system
known as "Micores," which is used in connection with customer reservations of
U-Haul products and services.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Retiree Health Plan" means an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to
individuals after termination of their employment, other than as required by
Section 601 of ERISA.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-2 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"SAC Holding" means, collectively, SAC Holding Corporation, a
Nevada corporation, SAC Holding II Corporation, a Nevada corporation, and each
of their respective Subsidiaries, whether now existing or hereafter formed.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"SEC Filings" means, with respect to any Person, all reports,
documents and other information filed by such Person pursuant to the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended,
and all other rules and regulations promulgated by the SEC, including such
Person's filed Form 10-K and subsequently filed quarterly reports on Form 10-Q
and current reports on Form 8-K.
"Second Relief Date" has the meaning set forth in the recitals
of this Agreement.
29
"Securities Account" means a "securities account" as that term
is defined in the Code.
"Senior Claims" means the Liens described on Schedule S-1
hereto, in each case, to the extent allowed by the Court.
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section
2.3(f)(i).
"SSI" means Self-Storage International Holding Corporation, a
Nevada corporation, and any Subsidiary thereof, whether now existing or
hereafter formed.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Stock Pledge Agreement" means, collectively, one or more
stock pledge agreements, the form and substance of which are reasonably
satisfactory to Agent, executed and delivered by each Borrower or Guarantor that
owns Stock of a Subsidiary of Parent; provided a Stock Pledge Agreement shall
not be required in connection with the Stock of the Dormant Subsidiaries, the
Bankrupt Subsidiaries, or Storage Realty, L.L.C.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity; provided, however, PMSR, SAC Holding and SSI shall not be deemed to be
Subsidiaries of any Borrower herein.
"Supporting Obligation" means any Person's now owned or
hereafter acquired right, title and interest with respect to any "supporting
obligation" as that term is defined in the Code.
"Surplus Real Property Collateral" means the Real Property
Collateral set forth on Schedule S-2.
"Swing Lender" means Foothill or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Synthetic Leases" means, collectively, (i) that certain
Amended and Restated Master Lease and Open-End Mortgage dated as of July 27,
1999 among U-Haul, AREC, the various lessors identified therein and BMO Global
Solutions, Inc., (ii) that certain Master Lease
30
dated as of September 24, 1999 between BMO Global Capital Solutions, Inc. and
AREC; and (iii) that certain Canadian U-Haul Master Lease dated as of April 5,
2001 between Computershare Trust Company of Canada, as successor to Montreal
Trust Company of Canada, and U-Haul (Canada).
"Taxes" has the meaning set forth in Section 16.11.
"Term Loan" has the meaning set forth in Section 2.2(a).
"Term Loan Amount" means $50,000,000.
"Term Loan Commitment" means, with respect to each Lender, its
Term Loan Commitment and, with respect to all Lenders, their Term Loan
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-2 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Title Reserve" means a reserve against Availability in an
amount determined by Agent upon consultation with its counsel with respect to
title defects and exceptions for certain of the Real Property Collateral.
"Total Commitment" means, with respect to each Lender, its
Total Commitment, and, with respect to all Lenders, their Total Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-2 attached hereto or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"TRAC Lease Obligations" means, in connection with any TRAC
Lease Transaction that is an operating lease, the fair market value, at any
time, of the assets acquired by the Loan Parties under all TRAC Lease
Transactions.
"TRAC Lease Transaction" means any financing arrangement
entered into by any Loan Party pursuant to a Terminal Residual Adjustment Clause
lease whereby (a) (i) the ownership of a Vehicle that is owned by such Loan
Party is transferred to a lessor within 130 days of the acquisition of such
Vehicle or (ii) the ownership of a Vehicle is transferred to a lessor by someone
other than a Loan Party, and (b) the Vehicle so transferred is leased back by
the Loan Party.
"U-Haul" means U-Haul International, Inc., a Nevada
corporation.
"U-Haul (Canada)" means U-Haul Co. (Canada) Ltd./U-Haul Co.
(Canada) Ltee, an Ontario corporation.
"U-Haul Dealer" means any Person that leases Vehicles on
behalf of U-Haul in the ordinary course of business.
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"Underlying Issuer" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that
has been issued by an Underlying Issuer.
"Unused Line Fee" has the meaning set forth in Section
2.11(a).
"U.S. Trustee" means the United States Trustee appointed to
the Chapter 11 Case.
"Vehicle" or "Vehicles" means any vehicle (including any motor
vehicle), trailer or other asset of any Borrower represented by a certificate of
title.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association.
"WPCarey Transaction" means the transaction, in form and
substance reasonably satisfactory to Agent, whereby UH Storage (DE) Limited
Partnership, a Delaware limited partnership, or other Affiliate of W.P. ▇▇▇▇▇ &
Co., LLC, will acquire the Real Property that is subject to the Synthetic Leases
(excluding Real Property located in Canada) and such Synthetic Leases shall be
paid in full and terminated, all as more fully set forth on Schedule W-1.
1.2 ACCOUNTING TERMS; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that for purposes
of determining compliance with any covenant set forth in Article 7, such terms
shall be construed in accordance with GAAP as in effect on the date of this
Agreement applied on a basis consistent with the application used in preparing
Borrowers' audited financial statements referred to in Section 6.3. If any
change in accounting principles from those used in the preparation of the
audited financial statements referred to in Section 6.3 hereafter occasioned by
the promulgation of any rule, regulation, pronouncement or opinion by or
required by the Financial Accounting Standards Board (or successors thereto or
agencies with similar functions) would result in a change in the method of
calculation of financial covenants, standards or terms found in Article 1 or
Article 7, the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating Parent's financial condition shall be the same
after such change as if such change had not been made; provided, however, the
parties hereto agree to construe all terms of an accounting or financial nature
in accordance with GAAP as in effect prior to any such change in accounting
principles until the parties hereto have amended the applicable provisions of
this Agreement.
1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any
other Loan Document clearly requires otherwise, references to the plural include
the singular, references to
32
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement or any other Loan Document
refer to this Agreement or such other Loan Document, as the case may be, as a
whole and not to any particular provision of this Agreement or such other Loan
Document, as the case may be. Section, subsection, clause, schedule, and exhibit
references herein are to this Agreement unless otherwise specified. Any
reference in this Agreement or in the other Loan Documents to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to the repayment in full of the Obligations shall mean the
repayment in full in cash of all Obligations other than contingent
indemnification Obligations and any other Bank Product Obligations that at such
time are allowed by the applicable Bank Product Provider to remain outstanding
and are not required to be repaid or cash collateralized pursuant to the
provisions of this Agreement. Any reference herein to any Person shall be
construed to include such Person's successors and assigns. Any requirement of a
writing contained herein or in the other Loan Documents shall be satisfied by
the transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement, together with any amendments, restatements,
supplements, or other modifications to such schedules and exhibits permitted
hereunder shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement
and relying upon the representations and warranties set forth herein, and
subject to the Interim Order and the Final Order, and during the term of this
Agreement, each Lender with a Revolver Commitment agrees (severally, not jointly
or jointly and severally) to make advances ("Advances") to Borrowers in an
amount at any one time outstanding not to exceed such Lender's Pro Rata Share of
an amount equal to the lesser of (i) the Maximum Revolver Amount less the Letter
of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit Usage less
the outstanding balance of the Term Loan.
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) Carve-Out Expenses up to the Carve-Out Amount, (ii)
sums that Borrowers are required to pay (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and have failed to pay under any Section of this Agreement or any
other Loan Document, (iii) amounts required to be paid to any Governmental
Authority for mortgage, stamp or other documentary taxes with
33
respect to any Mortgage delivered pursuant to this Agreement, and (iv) amounts
owing by Borrowers or their Subsidiaries to any Person to the extent secured by
a Lien on, or trust over, any of the Collateral which Lien or trust, in the
Permitted Discretion of Agent likely would have a priority superior to the
Agent's Liens (such as Liens or trusts in favor of landlords, warehousemen,
carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for
ad valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral; provided, however, the amount of any
such reserve established by Agent in its Permitted Discretion after the Closing
Date shall only be reduced with the consent of the Required Lenders.
(c) The Lenders with Revolver Commitments shall have no
obligation to make additional Advances hereunder to the extent such additional
Advances would cause the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
2.2 TERM LOAN.
(a) Subject to the terms and conditions of this
Agreement, on the Drawdown Date each Lender with a Term Loan Commitment agrees
(severally, not jointly or jointly and severally) to make term loans
(collectively, the "Term Loan") to Borrowers in an amount equal to such Lender's
Pro Rata Share of an amount equal to the lesser of (i) the Term Loan Amount, or
(ii) the Borrowing Base less the Revolver Usage as of such date. The Term Loan
shall be repaid in full on the Maturity Date.
(b) The outstanding unpaid principal balance and all
accrued and unpaid interest under the Term Loan shall be due and payable on the
date of termination of this Agreement, whether by its terms, by prepayment, or
by acceleration. All amounts outstanding under the Term Loan shall constitute
Obligations.
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made
by an irrevocable written request by an Authorized Person delivered to Agent
(which notice must be received by Agent no later than 10:00 a.m. (California
time) on the Business Day prior to the date that is the requested Funding Date
specifying (i) the amount of such Borrowing, and (ii) the requested Funding
Date, which shall be a Business Day; provided, however, that (x) in the case of
a request for Swing Loan in an amount of $1,000,000, or less, such notice will
be timely received if it is received by Agent no later than 10:00 a.m.
(California time) on the Business Day that is the requested Funding Date, and
(y) in the case of the Term Loan, Agent shall have received three Business Days'
notice prior to the requested Funding Date, if such Funding Date will be prior
to August 29, 2003), specifying (i) the amount of such Borrowing, and (ii) the
requested Funding Date, which shall be a Business Day. At Agent's election, in
lieu of delivering the above-described written request, any Authorized Person
may give Agent telephonic notice of such request by the required time, with such
telephonic notice to be confirmed in writing within 24
34
hours of the giving of such notice and the failure to provide such written
confirmation shall not affect the validity of the request. Upon the making of
any request for a Borrowing hereunder, Borrowers shall be deemed to have
certified that all conditions set forth in Section 3.3 hereof have been
satisfied.
(b) AGENT'S ELECTION. Promptly after receipt of a request
for a Borrowing pursuant to Section 2.3(a), Agent shall elect, in its
discretion, (i) to have the terms of Section 2.3(c) apply to such requested
Borrowing, or (ii) if the Borrowing is for an Advance, to request Swing Lender
to make a Swing Loan pursuant to the terms of Section 2.3(d) in the amount of
the requested Borrowing; provided, however, that if Swing Lender declines in its
sole discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall
elect to have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have
the terms of this Section 2.3(c) apply to a requested
Borrowing as described in Section 2.3(b), then promptly after
receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders, not later than 1:00
p.m. (California time) on the Business Day immediately
preceding the Funding Date applicable thereto (or two Business
Days immediately preceding the Funding Date applicable thereto
in the case of the Term Loan), by telecopy, telephone, or
other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's
Pro Rata Share of the requested Borrowing available to Agent
in immediately available funds, to Agent's Account, not later
than 10:00 a.m. (California time) on the Funding Date
applicable thereto. After Agent's receipt of the proceeds of
such Advances (or the Term Loan, as applicable), upon
satisfaction of the applicable conditions precedent set forth
in Section 3 hereof, Agent shall make the proceeds thereof
available to Administrative Borrower on the applicable Funding
Date by transferring immediately available funds equal to such
proceeds received by Agent to Administrative Borrower's
Designated Account; provided, however, that, subject to the
provisions of Section 2.3(i), Agent shall not request any
Lender to make, and no Lender shall have the obligation to
make, any Advance (or its portion of the Term Loan) if Agent
shall have actual knowledge that (1) one or more of the
applicable conditions precedent set forth in Section 3 will
not be satisfied on the requested Funding Date for the
applicable Borrowing unless such condition has been waived, or
(2) the requested Borrowing would exceed the Availability on
such Funding Date.
(ii) Unless Agent receives notice from a Lender
on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, prior to 9:00 a.m.
(California time) on the date of such Borrowing, that such
Lender will not make available as and when required hereunder
to Agent for the account of Borrowers the amount of that
Lender's Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made or will make such amount available
to Agent in immediately available funds on the Funding Date
and Agent may (but shall not be so required), in reliance upon
such assumption, make available to
35
Borrowers on such date a corresponding amount. If and to the
extent any Lender shall not have made its full amount
available to Agent in immediately available funds and Agent in
such circumstances has made available to Borrowers such
amount, that Lender shall on the Business Day following such
Funding Date make such amount available to Agent, together
with interest at the Defaulting Lender Rate for each day
during such period. A notice submitted by Agent to any Lender
with respect to amounts owing under this subsection shall be
conclusive, absent manifest error. If such amount is so made
available, such payment to Agent shall constitute such
Lender's Advance (or portion of the Term Loan, as applicable)
on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify
Administrative Borrower of such failure to fund and, upon
demand by Agent, Borrowers shall pay such amount to Agent for
Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the
Advances (or portion of the Term Loan, as applicable)
composing such Borrowing. The failure of any Lender to make
any Advance (or portion of the Term Loan, as applicable) on
any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance (or portion of the
Term Loan, as applicable) on such Funding Date, but no Lender
shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on any
Funding Date.
(iii) Agent shall not be obligated to transfer to
a Defaulting Lender any payments made by Borrowers to Agent
for the Defaulting Lender's benefit, and, in the absence of
such transfer to the Defaulting Lender, Agent shall transfer
any such payments to each other non-Defaulting Lender member
of the Lender Group ratably in accordance with their
Commitments (but only to the extent that such Defaulting
Lender's Advance was funded by the other members of the Lender
Group) or, if so directed by Administrative Borrower and if no
Default or Event of Default shall have occurred and be
continuing (and to the extent such Defaulting Lender's Advance
was not funded by the Lender Group), retain same to be
re-advanced to Borrowers as if such Defaulting Lender had made
Advances to Borrowers. Subject to the foregoing, Agent may
hold and, in its Permitted Discretion, re-lend to Borrowers
for the account of such Defaulting Lender the amount of all
such payments received and retained by Agent for the account
of such Defaulting Lender. Solely for the purposes of voting
or consenting to matters with respect to the Loan Documents,
such Defaulting Lender shall be deemed not to be a "Lender"
and such Lender's Commitment shall be deemed to be zero. This
Section shall remain effective with respect to such Lender
until (x) the Obligations under this Agreement shall have been
declared or shall have become immediately due and payable, (y)
the non-Defaulting Lenders, Agent, and Administrative Borrower
shall have waived such Defaulting Lender's default in writing,
or (z) the Defaulting Lender makes its Pro Rata Share of the
applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this
Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, to relieve or excuse the
36
performance by such Defaulting Lender or any other Lender of
its duties and obligations hereunder, or to relieve or excuse
the performance by Borrowers of their duties and obligations
hereunder to Agent or to the Lenders other than such
Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting
Lender of this Agreement and shall entitle Administrative
Borrower at its option, upon written notice to Agent, to
arrange for a substitute Lender to assume the Commitment of
such Defaulting Lender, such substitute Lender to be
acceptable to Agent. In connection with the arrangement of
such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and
Acceptance in favor of the substitute Lender (and agrees that
it shall be deemed to have executed and delivered such
document if it fails to do so) subject only to being repaid
its share of the outstanding Obligations (other than Bank
Product Obligations) (including an assumption of its Pro Rata
Share of the Risk Participation Liability) without any premium
or penalty of any kind whatsoever; provided further, however,
that any such assumption of the Commitment of such Defaulting
Lender shall not be deemed to constitute a waiver of any of
the Lender Groups' or Borrowers' rights or remedies against
any such Defaulting Lender arising out of or in relation to
such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the
consent of Swing Lender, as a Lender, to have the terms of
this Section 2.3(d) apply to a requested Borrowing as
described in Section 2.3(b), Swing Lender as a Lender shall
make such Advance in the amount of such Borrowing (any such
Advance made solely by Swing Lender as a Lender pursuant to
this Section 2.3(d) being referred to as a "Swing Loan" and
such Advances being referred to collectively as "Swing Loans")
available to Borrowers on the Funding Date applicable thereto
by transferring immediately available funds to Administrative
Borrower's Designated Account. Each Swing Loan shall be deemed
to be an Advance hereunder and shall be subject to all the
terms and conditions applicable to other Advances, except that
all payments on any Swing Loan shall be payable to Swing
Lender as a Lender solely for its own account (and for the
account of the holder of any participation interest with
respect to such Swing Loan). Subject to the provisions of
Section 2.3(i), Agent shall not request Swing Lender, as a
Lender, to make, and Swing Lender as a Lender shall not make,
any Swing Loan if Agent has actual knowledge that (i) one or
more of the applicable conditions precedent set forth in
Section 3 will not be satisfied on the requested Funding Date
for the applicable Borrowing unless such condition has been
waived, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date. Swing Lender as a Lender
shall not otherwise be required to determine whether the
applicable conditions precedent set forth in Section 3 have
been satisfied on the Funding Date applicable thereto prior to
making, in its sole discretion, any Swing Loan.
37
(ii) The Swing Loans shall be secured by the
Agent's Liens, shall constitute Obligations hereunder, and
shall bear interest at the rate applicable from time to time
to Advances that are Base Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrowers and
the Lenders, from time to time in Agent's sole discretion, (1)
after the occurrence and during the continuance of a Default
or an Event of Default, or (2) at any time that any of the
other applicable conditions precedent set forth in Section 3
have not been satisfied, to make Advances to Borrowers on
behalf of the Lenders that Agent, in its Permitted Discretion
deems necessary or desirable (A) to preserve or protect the
Collateral and any other collateral securing the Obligations,
or any portion thereof, (B) to enhance the likelihood of
repayment of the Obligations (other than the Bank Product
Obligations), or (C) to pay any other amount chargeable to
Borrowers pursuant to the terms of this Agreement, including
Lender Group Expenses and the costs, fees, and expenses
described in Section 10 (any of the Advances described in this
Section 2.3(e) shall be referred to as "Agent Advances"),
provided, that notwithstanding anything to the contrary
contained in this Section 2.3(e), the aggregate principal
amount of Agent Advances outstanding at any one time, when
taken together with the aggregate principal amount of
Overadvances made in accordance with Section 2.3(i)
outstanding at any time, shall not exceed an amount equal to
the lesser of (x) 5.0% of the Borrowing Base then in effect
and (y) $10,000,000. Each Agent Advance shall be deemed to be
an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that no such
Agent Advance shall be eligible for the LIBOR Option and all
payments thereon shall be payable to Agent solely for its own
account (and for the account of the holder of any
participation interest with respect to such Agent Advances).
(ii) The Agent Advances shall be repayable on
demand and secured by the Agent's Liens granted to Agent under
the Loan Documents, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded
portion of the Advances is intended by the Lenders to equal, at all times, such
Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, Agent, Swing Lender, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by Borrowers) that in
order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Advances, the Swing Loans, and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a
more frequent basis if so determined by Agent, (1) on behalf
of Swing Lender, with respect to each outstanding Swing Loan,
(2) for itself, with respect to each Agent Advance, and (3)
with respect to Borrowers' or
38
their Subsidiaries' Collections received, as to each by
notifying the Lenders by telecopy, telephone, or other similar
form of transmission, of such requested Settlement, no later
than 2:00 p.m. (California time) on the Business Day
immediately prior to the date of such requested Settlement
(the date of such requested Settlement being the "Settlement
Date"). Such notice of a Settlement Date shall include a
summary statement of the amount of outstanding Advances
(including Swing Loans and Agent Advances) for the period
since the prior Settlement Date. Subject to the terms and
conditions contained herein (including Section 2.3(c)(iii)):
(y) if a Lender's balance of the Advances (including Swing
Loans and Agent Advances) exceeds such Lender's Pro Rata Share
of the Advances (including Swing Loans and Agent Advances) as
of a Settlement Date, then Agent shall, by no later than 12:00
p.m. (California time) on the Settlement Date, transfer in
immediately available funds to a Deposit Account of such
Lender (as such Lender may designate) an amount such that each
such Lender shall, upon receipt of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances (including
Swing Loans and Agent Advances), and (z) if a Lender's balance
of the Advances, Swing Loans, and Agent Advances is less than
such Lender's Pro Rata Share of the Advances (including Swing
Loans and Agent Advances) as of a Settlement Date, such Lender
shall no later than 12:00 p.m. (California time) on the
Settlement Date transfer in immediately available funds to the
Agent's Account, an amount such that each such Lender shall,
upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances (including Swing Loans and
Agent Advances). Such amounts made available to Agent under
clause (z) of the immediately preceding sentence shall be
applied against the amounts of the applicable Swing Loan or
Agent Advance and, together with the portion of such Swing
Loan or Agent Advance representing Swing Lender's Pro Rata
Share thereof, shall constitute Advances of such Lenders. If
any such amount is not made available to Agent by any Lender
on the Settlement Date applicable thereto to the extent
required by the terms hereof, Agent shall be entitled to
recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of
the Advances, Swing Loans, and Agent Advances is less than,
equal to, or greater than such Lender's Pro Rata Share of the
Advances, Swing Loans, and Agent Advances as of a Settlement
Date, Agent shall, as part of the relevant Settlement, apply
to such balance the portion of payments actually received in
good funds by Agent with respect to principal, interest, and
fees payable by Borrowers and allocable to the Lenders
hereunder, and proceeds of Collateral and any other collateral
securing the obligations. To the extent that a net amount is
owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of
such next Settlement.
(iii) Between Settlement Dates, Agent, to the
extent no Agent Advances or Swing Loans are outstanding, may
pay over to Swing Lender any payments received by Agent, that
in accordance with the terms of this Agreement would be
applied to the reduction of the Advances, for application to
Swing
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Lender's Pro Rata Share of the Advances. If, as of any
Settlement Date, Collections of Borrowers or their
Subsidiaries received since the then immediately preceding
Settlement Date have been applied to Swing Lender's Pro Rata
Share of the Advances other than to Swing Loans, as provided
for in the previous sentence, Swing Lender shall pay to Agent
for the accounts of the Lenders, and Agent shall pay to the
Lenders, to be applied to the outstanding Advances of such
Lenders, an amount such that each Lender shall, upon receipt
of such amount, have, as of such Settlement Date, its Pro Rata
Share of the Advances. During the period between Settlement
Dates, Swing Lender with respect to Swing Loans, Agent with
respect to Agent Advances, and each Lender (subject to the
effect of letter agreements between Agent and individual
Lenders) with respect to the Advances other than Swing Loans
and Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
(g) NOTATION. As more fully set forth in Section 2.16 and
Section 14.1(h) Agent shall record on its books the principal amount of the
Advances (or portion of the Term Loan, as applicable) owing to each Lender,
including the Swing Loans owing to Swing Lender, and Agent Advances owing to
Agent, and the interests therein of each Lender, from time to time and such
records shall, absent manifest error, conclusively be presumed to be correct and
accurate. In addition, each Lender is authorized, at such Lender's option, to
note the date and amount of each payment or prepayment of principal of such
Lender's Advances (or portion of Term Loan, as applicable) in its books and
records, including computer records and such records shall, absent manifest
error, conclusively be presumed to be correct and accurate.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than
Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligations hereunder, and (ii) no
failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.
(i) OPTIONAL OVERADVANCES. Any contrary provision of this
Agreement notwithstanding, the Lenders hereby authorize Agent or Swing Lender,
as applicable, and Agent or Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Advances to
Borrowers notwithstanding that an Overadvance exists or thereby would be
created, so long as (i) after giving effect to such Advances, the sum of the
outstanding Revolver Usage and the outstanding principal amount of the Term Loan
does not exceed the Borrowing Base by an amount equal to the lesser of (x) 5.0%
of the Borrowing Base and (y) $10,000,000, (ii) after giving effect to such
Advances the outstanding Revolver Usage (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group Expenses) does
not exceed the Maximum Revolver Amount, (iii) the aggregate principal amount of
Overadvances made pursuant to this Section 2.3(i) when taken together with the
aggregate principal amount of Agent Advances made pursuant to Section 2.3(e)
does not exceed at any
40
time an amount equal to the lesser of (x) 5.0% of the Borrowing Base then in
effect and (y) $10,000,000, and (iv) at the time of the making of any such
Advance (including a Swing Loan), Agent does not believe, in good faith, that
the Overadvance created by such Advance will be outstanding for more than 90
days. The foregoing provisions are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Borrowers in any way.
The Advances and Swing Loans, as applicable, that are made pursuant to this
Section 2.3(i) shall be subject to the same terms and conditions as any other
Advance or Swing Loan, as applicable, except that they shall not be eligible for
the LIBOR Option and the rate of interest applicable thereto shall be the rate
applicable to Advances that are Base Rate Loans under Section 2.6(c) hereof
without regard to the presence or absence of a Default or Event of Default.
(i) In the event Agent obtains actual knowledge
that the Revolver Usage exceeds the amounts permitted by the
preceding paragraph, regardless of the amount of, or reason
for, such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice
would result in imminent harm to the Collateral or any other
collateral securing the Obligations or its value), and the
Lenders with Revolver Commitments thereupon shall, together
with Agent, jointly determine the terms of arrangements that
shall be implemented with Borrowers and intended to reduce,
within a reasonable time, the outstanding principal amount of
the Advances to Borrowers to an amount permitted by the
preceding paragraph. In the event Agent or any Lender
disagrees over the terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall
be implemented according to the determination of the Required
Lenders.
(ii) Each Lender with a Revolver Commitment shall
be obligated to settle with Agent as provided in Section
2.3(f) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender,
any intentional Overadvances made as permitted under this
Section 2.3(i), and any Overadvances resulting from the
charging to the Loan Account of interest, fees, or Lender
Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly provided
herein, all payments by Borrowers shall be made to Agent's
Account for the account of the Lender Group and shall be made
in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Except as
otherwise provided in paragraph (b)(iii) below, any payment
received by Agent later than 11:00 a.m. (California time),
shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
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(ii) Unless Agent receives notice from
Administrative Borrower prior to the date on which any payment
is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that
Borrowers have made (or will make) such payment in full to
Agent on such date in immediately available funds and Agent
may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the
extent Borrowers do not make such payment in full to Agent on
the date when due, each Lender severally shall repay to Agent
on demand such amount distributed to such Lender, together
with interest thereon at the Defaulting Lender Rate for each
day from the date such amount is distributed to such Lender
until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with respect to
Defaulting Lenders and except as otherwise provided in the
Loan Documents (including letter agreements between Agent and
individual Lenders), aggregate principal and interest payments
shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such
payments relate held by each Lender) and payments of fees and
expenses (other than fees or expenses that are for Agent's
separate account, after giving effect to any letter agreements
between Agent and individual Lenders) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type
of Commitment or Obligation to which a particular fee relates.
All payments shall be remitted to Agent and all such payments,
and all proceeds of any Loan Party's Accounts or other
Collateral received by Agent, shall be applied as follows:
(A) first, to pay any Lender Group
Expenses then due to Agent under the Loan Documents,
until paid in full,
(B) second, to pay any Lender Group
Expenses then due to the Lenders under the Loan
Documents, on a ratable basis, until paid in full,
(C) third, to pay any fees then due to
Agent (for its separate accounts, after giving effect
to any letter agreements between Agent and the
individual Lenders) under the Loan Documents until
paid in full,
(D) fourth, to pay any fees then due to
any or all of the Lenders (after giving effect to any
letter agreements between Agent and individual
Lenders) under the Loan Documents, on a ratable
basis, until paid in full,
(E) fifth, to pay interest due in
respect of all Agent Advances, until paid in full,
(F) sixth, ratably to pay interest due
in respect of the Advances (other than Agent
Advances), the Swing Loans, and the Term Loan until
paid in full,
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(G) seventh, to pay the principal of
all Agent Advances until paid in full,
(H) eighth, to pay the principal of all
Swing Loans until paid in full,
(I) ninth, so long as no Event of
Default has occurred and is continuing, and at
Agent's election (which election Agent agrees will
not be made if an Overadvance would be created
thereby), to pay amounts then due and owing by
Administrative Borrower or its Subsidiaries in
respect of Bank Products in an amount up to the
amount of the Bank Product Reserves, until paid in
full,
(J) tenth, so long as no Event of
Default has occurred and is continuing, to pay the
principal of all Advances until paid in full,
(K) eleventh, so long as no Event of
Default has occurred and is continuing, ratably to
pay all principal amounts then due and payable (other
than as a result of an acceleration thereof) with
respect to the Term Loan until paid in full,
(L) twelfth, if an Event of Default has
occurred and is continuing, ratably (i) to pay the
principal amount of all Advances until paid in full,
and (ii) to Agent, to be held by Agent, for the
ratable benefit of Issuing Lender and those Lenders
having a Revolver Commitment, as cash collateral in
an amount up to 105% of the then extant Letter of
Credit Usage until paid in full,
(M) thirteenth, if an Event of Default
has occurred and is continuing, to pay the
outstanding principal balance of the Term Loan until
the Term Loan is paid in full,
(N) fourteenth, if an Event of Default
has occurred and is continuing, to Agent, to be held
by Agent for the benefit of the Bank Product
Providers, as cash collateral in an amount up to the
amount of the Bank Product Reserve established prior
to the occurrence of, and not in contemplation of,
the subject Event of Default until Administrative
Borrower's and its Subsidiaries' obligations in
respect of the then extant Bank Products have been
paid in full or the cash collateral amount has been
exhausted,
(O) fifteenth, if an Event of Default
has occurred and is continuing, to pay any other
Obligations (including Bank Product Obligations)
until paid in full, and
(P) sixteenth, to Borrowers (to be
wired to the Designated Account) or such other Person
entitled thereto under applicable law.
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(ii) Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received
from each Lender in writing, such funds as it may be entitled
to receive, subject to a Settlement delay as provided in
Section 2.3(h).
(iii) In each instance, so long as no Event of
Default has occurred and is continuing, Section 2.4(b) shall
not be deemed to apply to any payment by Borrowers specified
by Borrowers to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of
this Agreement.
(iv) For purposes of the foregoing, "paid in
full" means payment of all amounts owing under the Loan
Documents according to the terms thereof, including loan fees,
service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on
interest, and expense reimbursements, whether or not the same
would be or is allowed or disallowed in whole or in part in
any Insolvency Proceeding.
(v) In the event of a direct conflict between
the priority provisions of this Section 2.4 and other
provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions
in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this
Section 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the
Lender Group pursuant to Sections 2.1 and 2.12 is greater than either the Dollar
or percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Borrowers immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in Section 2.4(b). In addition, Borrowers hereby
promise to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full to the Lender Group as and when due and payable
under the terms of this Agreement and the other Loan Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c)
below, all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows (i) if
the relevant Obligation is an Advance that is a LIBOR Rate Loan, at a per annum
rate equal to the LIBOR Rate plus the LIBOR Rate Margin, (ii) if the relevant
Obligation is a portion of the Term Loan that is a LIBOR Rate Loan, at a per
annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, (iii) if the
relevant Obligation is a portion of the Term Loan that is a Base Rate Loan, at a
per annum rate equal to the Base Rate plus the
44
Base Rate Margin, and (iv) otherwise, at a per annum rate equal to the Base Rate
plus the Base Rate Margin.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for
the ratable benefit of the Lenders with a Revolver Commitment, subject to any
letter agreement between Agent and individual Lenders), a Letter of Credit fee
(in addition to the charges, commissions, fees, and costs set forth in Section
2.12(f)) which shall accrue at a rate equal to 3.50% per annum times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn Letters
of Credit and except for Bank Product Obligations) that have
been charged to the Loan Account pursuant to the terms hereof
shall bear interest on the Daily Balance thereof at a per
annum rate equal to 2.00 percentage points above the per annum
rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above
shall be increased to 2.00 percentage points above the per
annum rate otherwise applicable hereunder.
(d) PAYMENT. Interest (other than Interest on LIBOR Rate
Loans), Letter of Credit fees, and all other fees payable hereunder shall be due
and payable, in arrears, on the first day of each month at any time that
Obligations or Commitments are outstanding. Borrowers hereby authorize Agent,
from time to time, without prior notice to Borrowers, to charge all interest and
fees, all Lender Group Expenses (as and when incurred), the charges,
commissions, fees, and costs provided for in Section 2.12(f) (as and when
accrued or incurred), the fees and costs provided for in Section 2.11 (as and
when accrued or incurred), and all other payments as and when due and payable
under any Loan Document (including the installments due and payable with respect
to the Term Loan and including any amounts due and payable to Bank Product
Providers in respect of Bank Products up to the amount of the then extant Bank
Product Reserve) to Borrowers' Loan Account, which amounts thereafter shall
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances hereunder. Any interest not paid when due shall be
compounded by being charged to Borrowers' Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day year for the
actual number of days elapsed. In the event the Base Rate is changed from time
to time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and the Lender Group, in
45
executing and delivering this Agreement, intend legally to agree upon the rate
or rates of interest and manner of payment stated within it; provided, however,
that, anything contained herein to the contrary notwithstanding, if said rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto, as of the date of this Agreement, Borrowers
are and shall be liable only for the payment of such maximum as allowed by law,
and payment received from Borrowers in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to
the extent of such excess.
2.7 CASH MANAGEMENT.
(a) Borrowers shall, and shall cause each of the
Guarantors to, (i) establish and maintain cash management services of a type and
on terms satisfactory to Agent at one or more of the banks set forth on Schedule
2.7(a) (each, a "Cash Management Bank"), and shall immediately after closing
request in writing and otherwise take such reasonable steps to ensure that all
of their Account Debtors forward payment of the amounts owed by them directly to
such Cash Management Bank, and (ii) deposit or cause to be deposited promptly,
and in any event no later than the first Business Day after the date of receipt
thereof, all Collections (including those sent directly by their Account Debtors
to a Cash Management Bank or Collections received at a retail location of any
Borrower or any Guarantor) into a bank account in Agent's name (a "Cash
Management Account") at one of the Cash Management Banks.
(b) The Cash Management Bank maintaining the
Concentration Account and such other Cash Management Banks as may be required by
Agent shall establish and maintain Cash Management Agreements with Agent and
Borrowers, in form and substance acceptable to Agent. Each such Cash Management
Agreement shall provide, among other things, that (i) all items of payment
deposited in such Cash Management Account and proceeds thereof are held by such
Cash Management Bank as agent or bailee-in-possession for Agent, (ii) the Cash
Management Bank has no rights of setoff or recoupment or any other claim against
the applicable Cash Management Account, other than for payment of its service
fees and other charges directly related to the administration of such Cash
Management Account and for returned checks or other items of payment, and (iii)
it immediately will forward by daily sweep all amounts in the applicable Cash
Management Account to the Concentration Account. Upon the terms and subject to
the conditions set forth in the Cash Management Agreement applicable to the
Concentration Account, all amounts received in the Concentration Account shall
be swept into the Agent's Account.
(c) So long as no Default or Event of Default has
occurred and is continuing, Administrative Borrower may amend Schedule 2.7(a) or
(b) to add or replace a Cash Management Account Bank or Cash Management Account;
provided, however, that (i) such prospective Cash Management Bank shall be
reasonably satisfactory to Agent and Agent shall have consented in writing in
advance to the opening of such Cash Management Account with the prospective Cash
Management Bank, and (ii) prior to the time of the opening of such Cash
Management Account, Borrowers or Guarantors, as applicable, and such prospective
Cash Management Bank shall have executed and delivered to Agent a Cash
Management Agreement. Borrowers or Guarantor, as applicable, shall close any of
their Cash Management Accounts (and establish replacement cash management
accounts in accordance with the foregoing sentence) promptly and in any event
within 30 days of notice from Agent that the creditworthiness of any
46
Cash Management Bank is no longer acceptable in Agent's reasonable judgment, or
as promptly as practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Cash Management Accounts
or Agent's liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the Obligations, and in which Borrowers are hereby deemed to
have granted a Lien to Agent.
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent
(whether from transfers to Agent by the Cash Management Banks pursuant to the
Cash Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any item is received into the Agent's
Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances
and the Term Loan, and Issuing Lender is authorized to issue the Letters of
Credit, under this Agreement based upon telephonic or other instructions
received from anyone purporting to be an Authorized Person, or without
instructions if pursuant to Section 2.6(d). Administrative Borrower agrees to
establish and maintain the Designated Account with the Designated Account Bank
for the purpose of receiving the proceeds of the Advances requested by Borrowers
and made by Agent or the Lenders hereunder. Unless otherwise agreed by Agent and
Administrative Borrower, any Advance, Agent Advance, or Swing Loan requested by
Borrowers and made by Agent or the Lenders hereunder shall be made to the
Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Lender
shall maintain an account on its books in the name of Borrowers (the "Loan
Account") on which Borrowers will be charged with the Term Loan, all Advances
(including Agent Advances and Swing Loans) made by Agent, Swing Lender, or the
Lenders to Borrowers or for Borrowers' account, the Letters of Credit issued by
Issuing Lender for Borrowers' account, and with all other payment Obligations
hereunder or under the other Loan Documents (except for Bank Product
Obligations), including, accrued interest, fees and expenses, and Lender Group
Expenses. In accordance with Section 2.8, the Loan Account will be credited with
all payments received by Agent from Borrowers or for Borrowers' account,
including all amounts received in the Agent's Account from any Cash Management
Bank. Agent shall render statements regarding the Loan Account to Administrative
Borrower, including principal, interest, fees, and including an itemization of
all charges and expenses constituting Lender Group Expenses owing, and such
statements, absent manifest error, shall be conclusively presumed to be correct
and accurate and
47
constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after receipt thereof by Administrative Borrower, Administrative
Borrower shall deliver to Agent written objection thereto describing the error
or errors contained in any such statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and
charges, which fees and charges shall be fully earned and due and non-refundable
when paid (irrespective of whether this Agreement is terminated thereafter) and
shall be apportioned among the Lenders in accordance with the terms of letter
agreements between Agent and individual Lenders:
(a) UNUSED LINE FEE. On the first day of each month
during the term of this Agreement, an unused line fee (the "Unused Line Fee") in
the amount equal to 0.5% per annum times the result of (a) the Maximum Revolver
Amount, less (b) the sum of (i) the average Daily Balance of Advances that were
outstanding during the immediately preceding month, plus (ii) the average Daily
Balance of the Letter of Credit Usage during the immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable under
the terms of the Fee Letter, the fees set forth in the Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. Audit,
appraisal, and valuation fees and charges as follows, (i) a fee of $850 per day,
per auditor, plus out-of-pocket expenses for each financial audit of a Borrower
performed by personnel employed by a Lender, and (ii) the actual charges paid or
incurred by Agent if it elects to employ the services of one or more third
Persons to perform financial audits of Borrowers, to appraise the Collateral, or
any portion thereof, or to assess a Borrower's business valuation.
2.12 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this
Agreement, the Issuing Lender agrees to issue letters of credit for the account
of Borrowers (each, an "L/C") or to purchase participations or execute
indemnities or reimbursement obligations (each such undertaking, an "L/C
Undertaking") with respect to letters of credit issued by an Underlying Issuer
(as of the Closing Date, the prospective Underlying Issuer is to be ▇▇▇▇▇ Fargo)
for the account of Borrowers. To request the issuance of an L/C or an L/C
Undertaking (or the amendment, renewal, or extension of an outstanding L/C or
L/C Undertaking), Administrative Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Lender) to the Issuing Lender and Agent (reasonably in
advance of the requested date of issuance, amendment, renewal, or extension) a
notice requesting the issuance of an L/C or L/C Undertaking, or identifying the
L/C or L/C Undertaking to be amended, renewed, or extended, the date of
issuance, amendment, renewal, or extension, the date on which such L/C or L/C
Undertaking is to expire, the amount of such L/C or L/C Undertaking, the name
and address of the beneficiary thereof (or of the Underlying Letter of Credit,
as applicable), and such other information as shall be necessary to prepare,
amend, renew, or extend such L/C or L/C Undertaking. If requested by the Issuing
Lender, Borrowers also shall be an applicant under the application with respect
to any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall have no obligation to issue a Letter of
Credit if any of the following would result after giving effect to the requested
Letter of Credit:
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(i) the Letter of Credit Usage would exceed the
Borrowing Base less the amount of outstanding Advances less
the outstanding balance of the Term Loan, or
(ii) the Letter of Credit Usage would exceed
$50,000,000, or
(iii) the Letter of Credit Usage would exceed the
Maximum Revolver Amount less the then extant amount of
outstanding Advances.
(b) Borrowers and the Lender Group acknowledge and agree
that certain Underlying Letters of Credit may be issued to support letters of
credit that already are outstanding as of the Closing Date. Each Letter of
Credit (and corresponding Underlying Letter of Credit) shall be in form and
substance acceptable to the Issuing Lender (in the exercise of its Permitted
Discretion), including the requirement that the amounts payable thereunder must
be payable in Dollars. If Issuing Lender is obligated to advance funds under a
Letter of Credit, Borrowers immediately shall reimburse such L/C Disbursement to
Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not
later than 11:00 a.m. (California time), on the date that such L/C Disbursement
is made, if Administrative Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 10:00 a.m. (California time), on such
date, or, if such notice has not been received by Administrative Borrower prior
to such time on such date, then not later than 11:00 a.m. (California time), on
(i) the Business Day that Administrative Borrower receives such notice, if such
notice is received prior to 10:00 a.m. (California time), on the date of
receipt, and, in the absence of such reimbursement, the L/C Disbursement
immediately and automatically shall be deemed to be an Advance hereunder and,
thereafter, shall bear interest at the rate then applicable to Advances that are
Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed
to be an Advance hereunder, Borrowers' obligation to reimburse such L/C
Disbursement shall be discharged and replaced by the resulting Advance. Promptly
following receipt by Agent of any payment from Borrowers pursuant to this
paragraph, Agent shall distribute such payment to the Issuing Lender or, to the
extent that Lenders have made payments pursuant to Section 2.12(c) to reimburse
the Issuing Lender, then to such Lenders and the Issuing Lender as their
interest may appear.
(c) Promptly following receipt of a notice of L/C
Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment
agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the
foregoing subsection on the same terms and conditions as if Borrowers had
requested such Advance and Agent shall promptly pay to Issuing Lender the
amounts so received by it from the Lenders. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Lender or the Lenders with
Revolver Commitment, the Issuing Lender shall be deemed to have granted to each
Lender with a Revolver Commitment, and each Lender with a Revolver Commitment
shall be deemed to have purchased, a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation Liability of
such Letter of Credit, and each such Lender agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of any payments made
by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by
49
the Issuing Lender and not reimbursed by Borrowers on the date due as provided
in clause (a) of this Section, or of any reimbursement payment required to be
refunded to Borrowers for any reason. Each Lender with a Revolver Commitment
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share of each
L/C Disbursement made by the Issuing Lender pursuant to this Section 2.12(b)
shall be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or Default
or the failure to satisfy any condition set forth in Section 3 hereof. If any
such Lender fails to make available to Agent the amount of such Lender's Pro
Rata Share of any L/C Disbursement made by the Issuing Lender in respect of such
Letter of Credit as provided in this Section, such Lender shall be deemed to be
a Defaulting Lender. Agent (for the account of the Issuing Lender) shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate until paid in full.
(d) Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless from any loss, cost, expense, or
liability, and reasonable attorneys fees incurred by the Lender Group arising
out of or in connection with any Letter of Credit; provided, however, that no
Borrower shall be obligated hereunder to indemnify for any loss, cost, expense,
or liability that is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group. Each Borrower agrees to
be bound by the Underlying Issuer's regulations and interpretations of any
Underlying Letter of Credit or by Issuing Lender's interpretations of any L/C
issued by Issuing Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers' instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group's
indemnification of any Underlying Issuer; provided, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability that is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group.
(e) Each Borrower hereby authorizes and directs any
Underlying Issuer to deliver to the Issuing Lender all instruments, documents,
and other writings and property received by such Underlying Issuer pursuant to
such Underlying Letter of Credit and to accept and rely upon the Issuing
Lender's instructions with respect to all matters arising in connection with
such Underlying Letter of Credit and the related application.
(f) Any and all charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
usage charge imposed by the prospective Underlying Issuer is .825% per annum
times
50
the face amount of each Underlying Letter of Credit, that such issuance charge
may be changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.
(g) If by reason of (i) any change after the Closing Date
in any applicable law, treaty, rule, or regulation or any change in the
interpretation or application thereof by any Governmental Authority, or (ii)
compliance by the Underlying Issuer or the Lender Group with any direction,
request, or requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement
is or shall be imposed or modified in respect of any Letter of
Credit issued hereunder, or
(ii) there shall be imposed on the Underlying
Issuer or the Lender Group any other condition regarding any
Underlying Letter of Credit or any Letter of Credit issued
pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may (and at the direction of the
Required Lenders, Agent shall), at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify
Administrative Borrower, and Borrowers shall pay on demand such amounts as Agent
may specify to be necessary to compensate the Lender Group for such additional
cost or reduced receipt, together with interest on such amount from the date of
such demand until payment in full thereof at the rate then applicable to Base
Rate Loans hereunder. The determination by Agent of any amount due pursuant to
this Section, as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest or demonstrable
error, be final and conclusive and binding on all of the parties hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of
having interest charged at the rate based upon the Base Rate, Borrowers shall
have the option (the "LIBOR Option") to have interest on all or a portion of the
Advances or the Term Loan be charged at a rate of interest based upon the LIBOR
Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the
last day of the Interest Period applicable thereto, (ii) the occurrence of an
Event of Default in consequence of which the Required Lenders or Agent on behalf
thereof elect to accelerate the maturity of all or any portion of the
Obligations, or (iii) termination of this Agreement pursuant to the terms
hereof. On the last day of each applicable Interest Period, unless
Administrative Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Base Rate Loans of the
same type hereunder. At any time that an Event of Default has occurred and is
continuing, Borrowers no longer shall have the option to request that Advances
or the Term Loan bear interest at the LIBOR Rate and Agent shall have the right
to
51
convert the interest rate on all outstanding LIBOR Rate Loans to the rate then
applicable to Base Rate Loans hereunder.
(b) LIBOR ELECTION.
(i) Administrative Borrower may, at any time and
from time to time, so long as no Event of Default has occurred
and is continuing, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. (California time) at least
3 Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of
Administrative Borrower's election of the LIBOR Option for a
permitted portion of the Advances or the Term Loan and an
Interest Period pursuant to this Section shall be made by
delivery to Agent of a LIBOR Notice received by Agent before
the LIBOR Deadline, or by telephonic notice received by Agent
before the LIBOR Deadline (to be confirmed by delivery to
Agent of a LIBOR Notice received by Agent prior to 5:00 p.m.
(California time) on the same day). Promptly upon its receipt
of each such LIBOR Notice, Agent shall provide a copy thereof
to each of the Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and
binding on Borrowers. In connection with each LIBOR Rate Loan,
each Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (a) the payment of any
principal of any LIBOR Rate Loan other than on the last day of
an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any LIBOR Rate
Loan other than on the last day of the Interest Period
applicable thereto, or (c) the failure to borrow, convert,
continue or prepay any LIBOR Rate Loan on the date specified
in any LIBOR Notice delivered pursuant hereto (such losses,
costs, and expenses, collectively, "Funding Losses"). Funding
Losses shall, with respect to Agent or any Lender, be deemed
to equal the amount determined by Agent or such Lender to be
the excess, if any, of (i) the amount of interest that would
have accrued on the principal amount of such LIBOR Rate Loan
had such event not occurred, at the LIBOR Rate that would have
been applicable thereto, for the period from the date of such
event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest
Period therefor), minus (ii) the amount of interest that would
accrue on such principal amount for such period at the
interest rate which Agent or such Lender would be offered were
it to be offered, at the commencement of such period, Dollar
deposits of a comparable amount and period in the London
interbank market. A certificate of Agent or a Lender delivered
to Administrative Borrower setting forth any amount or amounts
that Agent or such Lender is entitled to receive pursuant to
this Section shall be conclusive absent manifest error.
(iii) Borrowers shall have not more than 5 LIBOR
Rate Loans in effect at any given time. Borrowers only may
exercise the LIBOR Option for LIBOR
52
Rate Loans of at least $1,000,000 and integral multiples of
$500,000 in excess thereof.
(c) PREPAYMENTS. Borrowers may prepay LIBOR Rate Loans at
any time; provided, however, that in the event that LIBOR Rate Loans are prepaid
on any date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by Agent of proceeds of Collections in accordance with Section
2.4(b) or for any other reason, including early termination of the term of this
Agreement or acceleration of all or any portion of the Obligations pursuant to
the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the
Lenders and their Participants harmless against any and all Funding Losses in
accordance with clause (b) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with
respect to any Lender on a prospective basis to take into
account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased
costs due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general
applicability in corporate income tax laws) and changes in the
reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the
Reserve Percentage, which additional or increased costs would
increase the cost of funding loans bearing interest at the
LIBOR Rate. In any such event, the affected Lender shall give
Administrative Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit
the notice to each other Lender and, upon its receipt of the
notice from the affected Lender, Administrative Borrower may,
by notice to the affected Lender (y) require such Lender to
furnish to Administrative Borrower a statement setting forth
the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (z) repay the
LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market
conditions or any law, regulation, treaty, or directive, or
any change therein or in the interpretation of application
thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Advances
or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall
give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the
notice to each other Lender and (y) in the case of any LIBOR
Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the
last day of the Interest Period of such LIBOR Rate Loans, and
interest upon the LIBOR Rate Loans of such Lender thereafter
shall accrue interest at the rate then applicable to Base Rate
Loans, and (z) Borrowers shall not be entitled to elect the
LIBOR Option until such Lender determines that it would no
longer be unlawful or impractical to do so.
53
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the
contrary contained herein notwithstanding, neither Agent, nor any Lender, nor
any of their Participants, is required actually to acquire eurodollar deposits
to fund or otherwise match fund any Obligation as to which interest accrues at
the LIBOR Rate. The provisions of this Section shall apply as if each Lender or
its Participants had match-funded any Obligation as to which interest is
accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), will have the effect of reducing the return on such Lender's
or such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
2.15 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Agent and the Lenders under this
Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each Borrower, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Borrower without preferences or distinction among
them.
(c) If and to the extent that any Borrower shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Borrowers will make such payment with respect to, or
perform, such Obligation.
54
(d) The Obligations of each Borrower under the provisions
of this Section 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each such Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this
Agreement, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any Advances or Letters of Credit issued under or
pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any
action at any time taken or omitted by Agent or Lenders under or in respect of
any of the Obligations, any requirement of diligence or to mitigate damages and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by Agent or Lenders at any time or times in respect of
any default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without limiting
the generality of the foregoing, each of Borrowers assents to any other action
or delay in acting or failure to act on the part of any Agent or Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.15 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this Section
2.15, it being the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of such Borrower under
this Section 2.15 shall not be discharged except by performance and then only to
the extent of such performance. The Obligations of each Borrower under this
Section 2.15 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or any Agent or Lender. The joint and
several liability of the Persons composing Borrowers hereunder shall continue in
full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, constitution or place of formation of
any of the Persons composing Borrowers or any Agent or Lender.
(f) Each Borrower represents and warrants to Agent and
Lenders that such Borrower is currently informed of the financial condition of
Borrowers and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Obligations. Each Borrower
further represents and warrants to Agent and Lenders that such Borrower has read
and understands the terms and conditions of the Loan Documents. Each Borrower
hereby covenants that such Borrower will continue to keep informed of Borrowers'
financial condition, the financial condition of other guarantors, if any,
55
and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.
(g) The provisions of this Section 2.15 are made for the
benefit of the Agent, the Lenders and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all of
Borrowers as often as occasion therefor may arise and without requirement on the
part of any such Agent, Lender, successor or assign first to marshal any of its
or their claims or to exercise any of its or their rights against any of the
other Borrowers or to exhaust any remedies available to it or them against any
of the other Borrowers or to resort to any other source or means of obtaining
payment of any of the Obligations hereunder or to elect any other remedy.
Notwithstanding the entry of an order confirming a reorganization plan pursuant
to Chapter 11 of the Bankruptcy Code, the provisions of this Section 2.15 shall
remain in effect until all of the Obligations shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this Section
2.15 will forthwith be reinstated in effect, as though such payment had not been
made.
(h) Each Borrower hereby agrees that it will not enforce
any of its rights of contribution or subrogation against the other Borrowers
with respect to any liability incurred by it hereunder or under any of the other
Loan Documents, any payments made by it to Agent or the Lenders with respect to
any of the Obligations or any collateral security therefor until such time as
all of the Obligations have been paid in full in cash. Any claim which any
Borrower may have against any other Borrower with respect to any payments to
Agent or Lender hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.
(i) Each Borrower hereby agrees that, after the
occurrence and during the continuance of any Default or Event of Default, the
payment of any amounts due with respect to the indebtedness owing by any
Borrower to any other Borrower is hereby subordinated to the prior payment in
full in cash of the Obligations. Each Borrower hereby agrees that after the
occurrence and during the continuance of any Default or Event of Default, such
Borrower will not demand, ▇▇▇ for or otherwise attempt to collect any
indebtedness of any other Borrower owing to such Borrower until the Obligations
shall have been paid in full in cash. If, notwithstanding the foregoing
sentence, such Borrower shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
such Borrower as trustee for the Agent, and the Agent shall deliver any such
amounts to Agent for application to the Obligations in accordance with Section
2.4(b).
2.16 REGISTERED NOTES. Agent agrees to record each Advance and each
Lender's Term Loan on the Register referenced in Section 14.1(h). Each Advance
and each Lender's Term
56
Loan recorded on the Register (each a "Registered Loan") may not be evidenced by
promissory notes other than Registered Notes (as defined below). Upon the
registration of any Advance or any Lender's Term Loan, Borrowers agree at the
request of any Lender, to execute and deliver to such Lender a promissory note,
in conformity with the terms of this Agreement, in registered form to evidence
such Registered Loan, in form and substance reasonably satisfactory to such
Lender, and registered as provided in Section 14.1(h) (a "Registered Note"),
payable to the order of such Lender and otherwise duly completed, provided that
any Registered Note issued to evidence Advances or any Lender's Term Loan shall
be issued in the principal amount of the applicable Lender's Revolver Commitment
or Term Loan Commitment. Once recorded on the Register, each Advance and each
Lender's Term Loan may not be removed from the Register so long as it or they
remain outstanding, and a Registered Note may not be exchanged for a promissory
note that it is not a Registered Note.
2.17 SUPER-PRIORITY NATURE OF OBLIGATIONS. All Obligations under
the Loan Documents shall constitute administrative expenses of Borrowers in the
Chapter 11 Case with priority under Section 364(c)(1) of the Bankruptcy Code and
secured by Liens under Sections 362(c)(2) and (3) of the Bankruptcy Code over
any and all other administrative expenses of the kind specified in, without
limitation, Sections 105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b) and 726
of the Bankruptcy Code, and shall also have priority over any other claims and
liens, including any claims arising under Section 506(c) of the Bankruptcy Code,
subject and subordinate only to (a) the Carve-Out Expenses up to the Carve-Out
Amount, (b) Senior Claims, and (c) recoveries under Avoidance Actions, which
claims to the Avoidance Actions shall attach pari passu with other
administrative claimants. No other claim having a priority superior or pari
passu to that granted to or on behalf of Agent and the Lender Group by the
Interim Order or the Final Order, as the case may be, shall be granted or
approved while any of the Obligations or the Commitments under this Agreement
remain outstanding.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of the Lender Group, of each of the
conditions precedent set forth below:
(a) the Closing Date shall occur on or before August 20,
2003;
(b) Agent shall have received a Uniform Commercial Code
filing authorization letter, duly executed by each Guarantor or their
representative, together with appropriate financing statements on Form UCC-1
duly filed in such office or offices as may be necessary or, in the opinion of
Agent, desirable to perfect Agent's Liens in and to the collateral of such
Guarantor, and the Agent shall have received confirmation of the filing of all
such financing statements;
(c) Agent shall have received Uniform Commercial Code,
tax and judgment lien searches confirming the absence of any liens on the
Collateral other than the Permitted Liens;
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(d) Agent shall have received each of the following
documents, in form and substance satisfactory to Agent, duly executed, and each
such document shall be in full force and effect:
(i) the Agency Letter,
(ii) the Cash Management Agreements,
(iii) the Control Agreements,
(iv) the Copyright Security Agreement,
(v) the Disbursement Letter,
(vi) the Due Diligence Letter,
(vii) the Environmental Indemnity Agreements,
(viii) the Fee Letter,
(ix) the Guarantor Security Agreement, which
shall, among other things, grant Agent a Lien on the
Reservation Management System,
(x) the Guaranty,
(xi) the Mortgages executed by Guarantors,
(xii) the Officers' Certificate,
(xiii) the Patent and Trademark Security Agreement,
(xiv) the Quebec Pledge Agreement,
(xv) the Stock Pledge Agreement, together with
all certificates representing the shares of Stock pledged
thereunder, as well as Stock powers with respect thereto
endorsed in blank, and
(xvi) the Budget.
(e) Agent shall have received a certificate from the
Secretary of each Borrower attesting to the resolutions of such Borrower's Board
of Directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party and
authorizing specific officers of such Borrower to execute the same;
(f) Agent shall have received copies of each Borrower's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Borrower;
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(g) Agent shall have received a certificate of status
with respect to each Borrower, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;
(h) Agent shall have received certificates of status with
respect to each Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Borrower) in which its failure to
be duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
(i) Agent shall have received a certificate from the
Secretary of each Guarantor attesting to the resolutions of such Guarantor's
Board of Directors authorizing its execution, delivery, and performance of the
Loan Documents to which such Guarantor is a party and authorizing specific
officers of such Guarantor to execute the same;
(j) Agent shall have received copies of each Guarantor's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Guarantor;
(k) Agent shall have received a certificate of status
with respect to each Guarantor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Guarantor, which certificate shall indicate that such
Guarantor is in good standing in such jurisdiction;
(l) Agent shall have received certificates of status with
respect to each Guarantor, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Guarantor) in which its failure to
be duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Guarantor is in good standing in such
jurisdictions;
(m) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by Section 6.8, the form
and substance of which shall be reasonably satisfactory to Agent and its
counsel;
(n) Agent shall have received opinions of Borrowers'
counsel in form and substance reasonably satisfactory to the Lender Group,
including without limitation an opinion from Borrowers' counsel with respect to
Vehicle perfection matters and opinions from Agent's various local counsel as
Agent may reasonably request;
(o) Agent shall have received reasonably satisfactory
evidence (including a certificate of the chief financial officer or other senior
officer of Parent) that all tax returns required to be filed by Borrowers and
their Subsidiaries have been timely filed and all taxes upon Borrowers and their
Subsidiaries or their respective properties, assets, income, and franchises
(including Real Property taxes, sales taxes and payroll taxes) have been paid
prior to delinquency, except such taxes that are the subject of a Permitted
Protest;
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(p) Borrowers shall have the Required Availability after
giving effect to the initial extensions of credit hereunder;
(q) The Lender Group shall have completed its business,
legal, and collateral due diligence, including an investigation of the business,
assets, operations, properties (including compliance with FIRREA), condition
(financial or otherwise), contingent liabilities, prospects and Material
Contracts, and verification of Borrowers' representations and warranties to the
Lender Group, the results of which shall be satisfactory to the Lender Group;
(r) Agent shall have received completed reference checks
with respect to Borrowers' senior management, the results of which are
satisfactory to Agent in its sole discretion and copies of any employment
agreements between Borrowers and such senior management;
(s) Borrowers shall pay (i) all fees set forth in the Fee
Letter and hereunder and (ii) all Lender Group Expenses incurred in connection
with the transactions evidenced by this Agreement;
(t) Agent shall have received title reports for the Real
Property Collateral (except for the Real Property Collateral set forth on
Schedule 3.2(j)) owned by a Borrower showing that such Borrower is the vested
owner of such Real Property Collateral, free and clear of all title defects and
Liens except Permitted Liens;
(u) Agent shall have received (i) appraisals of the Real
Property Collateral satisfactory to the Lender Group, and (ii) mortgagee title
insurance policies (or marked commitments to issue the same) for the Real
Property Collateral owned by a Guarantor issued by a title insurance company
satisfactory to Agent (each a "Mortgage Policy" and, collectively, the "Mortgage
Policies") in amounts satisfactory to Agent assuring Agent that the Mortgages on
such Real Property Collateral owned by a Guarantor are valid and enforceable
first priority mortgage Liens on such Real Property Collateral owned by a
Guarantor free and clear of all defects and encumbrances except Permitted Liens,
and the Mortgage Policies otherwise shall be in form and substance satisfactory
to Agent;
(v) Agent shall have received an environmental site
report with respect to each parcel composing the Real Property Collateral; the
environmental consultants and surveyors retained for such reports or surveys,
the scope of the reports or surveys, and the results thereof shall be acceptable
to Agent;
(w) Agent shall have received executed copies of (i) each
Material Contract, (ii) each Affiliate Contract, and (iii) each contract between
any Loan Party, on the one hand, or any of SAC Holding, SSI or PMSR, on the
other hand (which, as of the Closing Date, are all of the contracts listed on
Schedule 3.1(w)), and a complete list of each Borrower's Subsidiaries, together
with a certificate of the Secretary of the Administrative Borrower certifying
each such document as being a true, correct, and complete copy thereof;
(x) Borrowers shall have received all licenses, approvals
or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery
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by Borrowers of this Agreement or any other Loan Document or with the
consummation of the transactions contemplated hereby and thereby;
(y) Borrowers and Guarantors shall have (i) completed the
procedures set forth in Section 4.9 for the registration of all Certificates of
Title, naming Agent as the sole lienholder, with the States of Arizona, Alaska
and Hawaii and the delivery of such original Certificates of Title after
registration thereof to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇ at Parent's location at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, (ii) delivered to Agent evidence of
approval from the State of Arizona for Borrowers to process and register the
Certificates of Title, in form and substance satisfactory to Agent, and (iii)
delivered to Agent a fidelity insurance policy naming Agent as loss payee or
bond endorsed to Agent, in each case in form and substance satisfactory to
Agent;
(z) the Interim Order, in form and substance reasonably
satisfactory to the Lender Group approving the transactions contemplated hereby
and granting a first priority perfected security interest in the Collateral
subject only to the Carve-Out Expenses up to the Carve-Out Amount and Senior
Claims and Avoidance Actions (which claims to recoveries under the Avoidance
Actions shall be pari passu claims) shall have been entered by the Court and
Agent shall have received a certified copy of such Interim Order and such
Interim Order shall not have been reversed, stayed, amended or otherwise
modified;
(aa) Amerco Real Estate Company, a Nevada corporation,
shall have become a debtor and debtor-in-possession under the Chapter 11 Case;
(bb) except as otherwise set forth in Section 5.11, no
Material Adverse Change shall have occurred;
(cc) the automatic stay shall have been modified to permit
the creation and perfection of Agent's Liens and security interests, and the
automatic stay shall have been automatically vacated to permit enforcement of
Agent's rights and remedies under the Loan Documents;
(dd) Agent shall have received the original 25% Demand
Bond in the original principal amount of Cdn$600,000,000 duly executed by U-Haul
(Canada) in favor of Agent and pledged to Agent pursuant to the Quebec Pledge
Agreement, together with any applicable endorsement or transfer with respect
thereto;
(ee) Agent shall have received Schedule 3.1(ee) from
Borrowers and Guarantors setting forth the book values of all box-trucks and
pickup trucks owned by the Loan Parties as of the Closing Date, subject to
Agent's first priority Liens, in form acceptable to Agent; and
(ff) all other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to the
Lender Group.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend
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credit hereunder) is subject to the fulfillment, on or before the date
applicable thereto, of each of the conditions subsequent set forth below (the
failure by Borrowers to so perform or cause to be performed constituting an
Event of Default):
(a) within 30 days of the Closing Date, Borrowers shall
deliver to Agent certified copies of the policies of insurance, together with
the endorsements thereto, as are required by Section 6.8, the form and substance
of which shall be reasonably satisfactory to Agent and its counsel;
(b) within 45 days of the Interim Order Date, the Final
Order, in form and substance reasonably satisfactory to Agent, shall have been
entered by the Court, and such Final Order shall not have been modified or
amended without the prior consent of Agent or have been reversed or stayed
pending appeal, and Borrowers shall have delivered a certified copy of the Final
Order to Agent; provided, however, to the extent such Final Order does not
contain provisions providing for the super-priority of the Liens securing the
Obligations substantially similar to such super-priority provisions contained in
the Interim Order or otherwise contains changes from the Interim Order that are
adverse in any material respect to the Lenders, such Final Order (or any
amendment or modification thereto modifying such super-priority provisions)
shall also be reasonably acceptable to all Lenders;
(c) on the Final Order Date, Borrowers shall deliver to
Agent an opinion of Borrowers' bankruptcy counsel, in form and substance
satisfactory to Agent in its sole discretion;
(d) within 60 days of the Interim Order Date, Borrowers
shall deliver to Agent Mortgages with respect to the Real Property Collateral
owned by Borrowers and such evidence that AREC is the vested owner of the Real
Property set forth next to its name on Schedule R-1 as may be requested by
Agent, in each case in form and substance acceptable to Agent;
(e) within 45 days of the Closing Date, Borrowers shall
deliver to Agent the Credit Card Agreements duly executed by the applicable
credit card processors, the form and substance of which are reasonably
satisfactory to Agent;
(f) within 120 days of the Closing Date, Agent shall have
received the results of the Canadian statutory lien searches, the results of
which are reasonably satisfactory to Agent;
(g) within 60 days of the Closing Date, Agent shall have
received certificates of status with respect AREC in the States of Maine,
Montana, New Hampshire, Utah, Vermont and Virginia, which certificates shall
indicate that such Borrower is in good standing in such States;
(h) within 60 days of the Closing Date, Borrowers shall
have received zoning letters, in form and substance acceptable to Agent, duly
executed by the appropriate Governmental Authorities, for the Real Property
Collateral located at the locations on Schedule 3.2(h) and Borrowers shall have
delivered copies of such zoning letters to Agent;
(i) within 30 days of the Closing Date, Agent shall have
received subordination, non-disturbance and attornment agreements duly executed
by the applicable Loan
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Party and tenant in favor of Agent with respect to the properties set forth on
Schedule 3.2(i), the form and substance of which are reasonably satisfactory to
Agent; and
(j) within 60 days of the Interim Order Date, Borrowers
shall use their best efforts to deliver to Agent copies of (i) owner's title
insurance policies in the name of AREC (or marked commitments to issue the same)
for the Real Property Collateral set forth on Schedule 3.2(j) evidencing that
AREC is the vested owner of record of such Real Property Collateral free and
clear of all Liens (other than Permitted Liens), with such policies in form and
substance satisfactory to Agent, or (ii) such other proof of vested ownership by
AREC that Agent deems acceptable in its Permitted Discretion; provided, no such
Real Property shall be included in the calculation of the Borrowing Base
hereunder until the satisfaction of the foregoing with respect thereto.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make all Advances (or
to extend any other credit hereunder) shall be subject to the following
conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor shall either
result from the making thereof;
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by any Governmental Authority
against any Borrower, Agent, any Lender, or any of their Affiliates;
(d) except as otherwise set forth in Section 5.11(b), no
Material Adverse Change shall have occurred;
(e) Agent shall have a first priority perfected security
in the Collateral except for (a) the Carve-Out Expenses up to the Carve-Out
Amount, (b) Senior Claims, and (c) recoveries under Avoidance Actions, which
claims to the Avoidance Actions shall attach pari passu with other
administrative claimants;
(f) on or prior to the date of such Advance, the Interim
Order or the Final Order, as the case may be, shall have been signed and entered
by the Bankruptcy Court, and such order shall be in full force and effect and
shall not have been reversed, stayed, modified or amended absent the express
written joinder or consent of Agent, on behalf of the Required Lenders, and,
unless Agent, on behalf of the Required Lenders, shall have expressly joined
therein or expressly consented thereto in writing, there shall be no motion
pending (i) to reverse, modify or amend the Interim Order or Final Order, as the
case may be, or (ii) to permit any administrative expense against Borrowers to
have administrative priority equal to or superior to the priority of Agent and
Lenders in respect of the Obligations; and
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(g) Agent shall have secured the Consent, and such
Consent shall be in full force and effect; provided, however, receipt of the
Consent shall not be a condition precedent to the making of the initial Advances
used solely to pay Lender Group Expenses and amounts due under the Fee Letter.
3.4 TERM. This Agreement shall become effective upon the execution
and delivery hereof by Borrowers, Agent and the Lenders and shall continue in
full force and effect for a term ending on the date (the "Maturity Date") that
is earliest of (a) ▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) the effective date of a plan of
reorganization in the Chapter 11 Case, and (c) date on which the Chapter 11 Case
of any Borrower is converted to a case under Chapter 7 of the Bankruptcy Code.
Agent, upon the election of the Required Lenders, shall have the right to
terminate the obligations of Lender Group under this Agreement immediately and
without notice upon the occurrence and during the continuation of an Event of
Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrowers with respect to any outstanding Letters of Credit and including all
Bank Product Obligations) shall immediately become due and payable without
notice or demand (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral (in an amount determined by Agent to satisfy the
reasonably estimated credit exposure) to be held by Agent for the benefit of the
Bank Product Providers with respect to the then extant Bank Product
Obligations). No termination of this Agreement, however, shall relieve or
discharge Borrowers of their duties, Obligations, or covenants hereunder and the
Agent's Liens in the Collateral shall remain in effect until all Obligations
have been fully and finally discharged and the Lender Group's obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been fully and finally
discharged and the Lender Group's obligations to provide additional credit under
the Loan Documents have been terminated irrevocably, Agent will, at Borrowers'
sole expense, execute and deliver any Uniform Commercial Code termination
statements, lien releases, mortgage releases, re-assignments of trademarks,
Vehicle registration releases, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the Agent's Liens and all
notices of security interests and liens previously filed by Agent with respect
to the Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at
any time upon 30 days prior written notice by Administrative Borrower to Agent,
to terminate this Agreement by paying to Agent, for the benefit of the Lender
Group and the Bank Product Providers, in cash, the Obligations (including (a)
either (i) providing cash collateral to be held by Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the then
extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the then extant Bank Product Obligations), in full to
be allocated based upon letter agreements between Agent and individual Lenders.
If Administrative Borrower has sent a notice of termination pursuant to the
provisions of this
64
Section, then the Commitments shall terminate and Borrowers shall be obligated
to repay the Obligations (including (a) either (i) providing cash collateral to
be held by Agent for the benefit of those Lenders with a Revolver Commitment in
an amount equal to 105% of the then extant Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the Issuing Lender, and
(b) providing cash collateral to be held by Agent for the benefit of the Bank
Product Providers with respect to the then extant Bank Product Obligations), in
full on the date set forth as the date of termination of this Agreement in such
notice.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to
Agent, for the benefit of the Lender Group and the Bank Product Providers, a
continuing security interest in all of its right, title, and interest in all
currently existing and hereafter acquired or arising Personal Property
Collateral in order to secure prompt repayment of any and all of the Obligations
in accordance with the terms and conditions of the Loan Documents and in order
to secure prompt performance by Borrowers of each of their covenants and duties
under the Loan Documents. The Agent's Liens in and to the Personal Property
Collateral shall attach to all Personal Property Collateral without further act
on the part of Agent or Borrowers. Anything contained in this Agreement or any
other Loan Document to the contrary notwithstanding, except for Permitted
Dispositions, Borrowers have no authority, express or implied, to dispose of any
item or portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL AND CHATTEL PAPER. Each Borrower
covenants and agrees with Agent that from and after the Closing Date and until
the date of termination of this Agreement in accordance with Section 3.5:
(a) In the event that any Collateral, including proceeds,
is evidenced by or consists of Negotiable Collateral of any Borrower, and if and
to the extent that perfection of priority of Agent's security interest with
respect to such Collateral is dependent on or enhanced by possession, the
applicable Borrower, immediately upon the request of Agent, shall endorse and
deliver physical possession of such Negotiable Collateral to Agent;
(b) Upon request by Agent, each Borrower shall take all
steps reasonably necessary to grant Agent control of all electronic Chattel
Paper of such Borrower in accordance with the Code and all "transferable
records" as defined in each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act; and
(c) In the event any Borrower, with Agent's consent,
retains possession of any Chattel Paper or instruments otherwise required to be
endorsed and delivered to Agent pursuant to Section 4.2(a), all of such Chattel
Paper and instruments shall be marked with the following legend: "This writing
and the obligations evidenced or secured thereby are subject to the security
interest of ▇▇▇▇▇ Fargo Foothill, Inc., as Agent."
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
Borrowers that Borrowers' Accounts, Chattel Paper, or General Intangibles (other
than the Excluded Assets) have been assigned to
65
Agent or that Agent has a security interest therein, or (b) collect Borrowers'
Accounts, Chattel Paper, or General Intangibles (other than the Excluded Assets)
directly and charge the collection costs and expenses to the Loan Account. Each
Borrower agrees that it will hold in trust for the Lender Group, as the Lender
Group's trustee, any Collections that it receives and immediately will deliver
said Collections to Agent or a Cash Management Bank in their original form as
received by the applicable Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Each Borrower
hereby authorizes Lender to file, transmit, or communicate, as applicable,
Uniform Commercial Code financing statements and amendments describing the
Collateral as "all personal property of debtor" or "all assets of debtor" or
words of similar effect in order to perfect Agent's Liens on the Collateral
without any Borrower's signature, to the extent permitted by applicable law;
provided, however, Agent shall clearly identify Excluded Assets as excepted
items. Notwithstanding the foregoing, at any time upon the request of Agent,
Borrowers shall execute and deliver to Agent, any and all financing statements,
original financing statements in lieu of continuation statements, fixture
filings, security agreements, pledges, assignments, endorsements of certificates
of title, supplements, and all other documents (the "Additional Documents") upon
which Borrower's signature may be required that Agent may request in its
Permitted Discretion, in form and substance reasonably satisfactory to Agent, to
perfect and continue perfection of or better perfect the Agent's Liens in the
Collateral (whether now owned or hereafter arising or acquired), to create and
perfect Liens in favor of Agent in any Real Property acquired after the Closing
Date, and in order to fully consummate all of the transactions contemplated
hereby and under the other Loan Documents. To the maximum extent permitted by
applicable law, each Borrower authorizes Agent to execute any such Additional
Documents in the applicable Borrower's name and authorize Agent to file such
executed Additional Documents in any appropriate filing office, and Agent shall
provide Administrative Borrower with copies of any such filings; provided,
however, that the failure by Agent to so provide such filings shall not affect
the authorizations herein. Each Borrower also hereby ratifies its authorization
for Agent to have filed in any jurisdiction any Uniform Commercial Code
financing statements or amendments thereto if filed prior to the Closing Date.
No Borrower shall terminate, amend or file a correction statement with respect
to any Uniform Commercial Code financing statement filed pursuant to this
Section 4.4 without Agent's prior written consent. In addition, on a quarterly
basis as Agent shall require, Borrowers shall (a) provide Agent with a report of
all new patentable, copyrightable, or trademarkable materials acquired or
generated by Borrowers during the prior period, (b) cause all patents,
copyrights, and trademarks acquired or generated by Borrowers that are not
already the subject of a registration with the appropriate filing office (or an
application therefor diligently prosecuted) to be registered with such
appropriate filing office in a manner sufficient to impart constructive notice
of Borrowers' ownership thereof, and (c) cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such patents, copyrights, and trademarks as being subject to the
security interests created thereunder. Each Borrower shall provide Agent with
notice that any Borrower or any Guarantor has made a Permitted Investment (other
than an Investment in its Subsidiaries made in the ordinary course of business)
promptly, but in any event within 5 Business Days, following the consummation
thereof and, upon the request of Agent, shall execute and deliver (or cause to
be executed and delivered to Agent) any and all Additional Documents requested
by Agent to perfect the Agent's Liens in such Permitted Investment.
66
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Borrower's true and lawful attorney, with
power to (a) if such Borrower refuses to execute and deliver, or fails timely to
execute and deliver any of the documents described in Section 4.4, sign the name
of such Borrower on any of the documents described in Section 4.4, (b) at any
time that an Event of Default has occurred and is continuing, sign such
Borrower's name on any invoice or ▇▇▇▇ of lading relating to the Collateral,
drafts against Account Debtors of such Borrower, or notices to such Account
Debtors, (c) send requests for verification of such Borrower's Accounts, (d)
endorse such Borrower's name on any Collection item that may come into the
Lender Group's possession, (e) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under such Borrower's
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (f) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting
such Borrower's Accounts, Chattel Paper, or General Intangibles other than the
Excluded Assets directly with Account Debtors of such Borrower, for amounts and
upon terms that Agent determines to be reasonable, and Agent may cause to be
executed and delivered any documents and releases that Agent determines to be
necessary. The appointment of Agent as each Borrower's attorney, and each and
every one of its rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully and finally repaid and
performed and the Lender Group's obligations to extend credit hereunder are
terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter to inspect Borrowers' Books and records and to check, test, and
appraise the Collateral or any other collateral securing the Obligations in
order to verify Borrowers' financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral or any other
collateral securing the Obligations. Absent the occurrence of an Event of
Default during such calendar year, Agent and the Lenders shall require
appraisals of only those parcels of Real Property constituting 20% of the Fair
Market Valuation of Real Property Collateral (as determined by Agent in its
Permitted Discretion) per calendar year; provided, however, that if Agent
determines, in its Permitted Discretion, that there has been a significant
decrease in the Fair Market Valuation of Real Property Collateral, appraisals of
all parcels of Real Property Collateral or such lesser amount as may be
determined by Agent in its Permitted Discretion per calendar year.
4.7 CONTROL AGREEMENTS. Each Borrower agrees that it will not
transfer assets out of any Securities Accounts other than as permitted under
Section 7.19 and, if to another securities intermediary, unless each of the
applicable Borrower, Agent, and the substitute securities intermediary have
entered into a Control Agreement. No arrangement contemplated hereby or by any
Control Agreement in respect of any Securities Accounts or other Investment
Property of Borrowers shall be modified by Borrowers without the prior written
consent of Agent. Upon the occurrence and during the continuance of a Default or
Event of Default, Agent may notify any securities intermediary to liquidate the
applicable Securities Account or any related Investment Property maintained or
held thereby and remit the proceeds thereof to the Agent's Account.
4.8 COMMERCIAL TORT CLAIMS. Borrowers shall promptly notify Agent
in writing in the event any Borrower shall incur or otherwise obtain a
Commercial Tort Claim in excess of
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$100,000 after the Closing Date against any third party and, upon the request of
Agent, shall promptly amend Schedule C-1, authorize the filing of additional
Uniform Commercial Code financing statements or amendments to existing Uniform
Commercial Code financing statements, and do such other acts or things deemed
necessary or desirable by Agent to grant Agent a first priority, perfected
security interest in any such Commercial Tort Claim, including, without
limitation executing an assignment of such Commercial Tort Claim.
4.9 VEHICLE REGISTRATION.
(a) Prior to the Closing Date, Borrowers shall, or shall
cause Guarantors to, (i) register, or cause to be registered, with the State of
Arizona each Vehicle (excluding any trailer) owned by any Borrower or any
Guarantor (other than U-Haul Co. of Alaska or U-Haul of Hawaii, Inc.) as of the
Closing Date and (ii) obtain a new certificate of title (collectively, the
"Certificates of Title" and, individually, a "Certificate of Title") for each
such Vehicle registered pursuant to clause (i) naming (1) (A) U-Haul (Canada) as
the registered owner of such Vehicles operated primarily in Canada, or (B)
U-Haul Co. of Arizona, an Arizona corporation, as the registered owner of all
other such Vehicles, (2) on new Certificates of Title obtained prior to May 21,
2003, "FOOTHILL CAPITAL CORP." as the sole lienholder and (3) on new
Certificates of Title obtained on or after May 21, 2003, "WELLSFARGO FOOTHILL,
INC., AS AGENT" or, if space does not permit, "WELLSFARGO FOOTHILL AGENT", as
the sole lienholder thereon.
(b) Prior to the Closing Date, Borrowers shall, or shall
cause U-Haul International, Inc. or U-Haul Co. of Alaska to, (i) register, or
cause to be registered, with the State of Alaska each Vehicle (excluding any
trailer) owned by U-Haul Co. of Alaska on or before the Closing Date, (ii)
obtain a new Certificate of Title for each such Vehicle registered pursuant to
clause (i) naming (1) U-Haul Co. of Alaska, an Alaskan corporation, as the
registered owner and (2) "WELLSFARGO FOOTHILL, INC., AS AGENT" or, if space does
not permit, "WELLSFARGO FOOTHILL AGENT", as the sole lienholder thereon.
(c) Prior to the Closing Date, Borrowers shall, or shall
cause U-Haul International, Inc. or U-Haul of Hawaii, Inc. to, (i) register, or
cause to be registered, with the State of Hawaii each Vehicle (excluding any
trailer) owned by U-Haul of Hawaii, Inc. on or before the Closing Date, (ii)
obtain a new Certificate of Title for each such Vehicle registered pursuant to
clause (i) naming (1) U-Haul of Hawaii, Inc., a Hawaiian corporation, as the
registered owner and (2) "WELLSFARGO FOOTHILL, INC., AS AGENT" or, if space does
not permit, "WELLSFARGO FOOTHILL AGENT", as the sole lienholder thereon.
(d) Borrowers shall, or shall cause Guarantors to, (i)
deposit all Certificates of Title into a segregated, secured location at
Parent's chief executive office located at 2727 North Central, Phoenix, Arizona,
the access to which shall be limited to Agent, its representatives and agents,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ and such Certificates of Title and such Persons
shall be covered by a fidelity insurance policy naming Agent as loss payee or a
bond endorsed to Agent, in either case in form and substance satisfactory to
Agent (which shall include coverage of at least $5,000,000), and (ii) timely pay
all fees required by the States of Alaska, Arizona and Hawaii, as applicable,
with respect to such Vehicle registrations and the issuances of the
corresponding Certificates of Title.
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(e) After the Closing Date, Borrowers shall, and shall
cause Guarantors to, (i) follow the procedures set forth in Section 4.9(a),
Section 4.9(b) and Section 4.9(c), as applicable, and Section 4.9(d) with
respect to any Vehicle (excluding any trailer) acquired by any Borrower or
Guarantor after the Closing Date that is not intended to be transferred into a
TRAC Lease Transaction within 130 days of the acquisition of such Vehicle, and
(ii) pursuant to the laws of the States of Alaska, Arizona and Hawaii, as
applicable, timely renew all registrations and Certificates of Title held by
Borrowers with respect to the Vehicles.
(f) Borrowers shall not, without the prior consent of
Agent, (i) transfer, sell or otherwise dispose of any of the Vehicles or the
Certificates of Title except in conjunction with a Permitted Disposition
hereunder, or (ii) relocate the Certificates of Title.
(g) Borrowers hereby acknowledge and agree that (i) they
shall hold and maintain all Certificates of Title solely on behalf of, and as an
attorney-in-fact and agent for, Agent, (ii) Agent's security interest in, Liens
on, and all rights and remedies with respect to the Vehicles and the
Certificates of Title shall remain valid and enforceable at all times, and (iii)
during the existence of an Event of Default or if Agent is not satisfied with
the results of any inspection under Section 4.9(h) below, Borrowers shall, or
shall cause the Guarantors to, promptly comply with any request or direction by
Agent to deliver the Certificates of Title to Agent or to such other Person or
location as Agent may direct in its Permitted Discretion.
(h) Borrowers further acknowledge and agree that, at the
expense of Borrowers, Agent shall have the right to conduct, on a quarterly
basis or more frequently if an Event of Default exists, an independent
inspection of 5% of the Certificates of Title then on hand with any appropriate
Governmental Authority in order to verify the accuracy and completeness of any
information contained on such Certificates of Title and compliance with this
Section 4.9; provided, however, that if Agent determines, in its Permitted
Discretion, that there are significant errors or discrepancies in the
Certificates of Title or non-compliance with this Section 4.9, Agent and the
Lenders shall, at the expense of Borrowers, have the right to conduct an
independent inspection of all of Certificates of Title or such lesser amount as
may be determined by Agent in its Permitted Discretion. Borrowers shall, or
shall cause Guarantors to, deliver to Agent (or its designees) any power of
attorney or other document that may be requested by Agent or required by such
Governmental Authority in connection therewith. Borrowers acknowledge that such
inspection may be conducted by employees of Agent or any third party retained by
Agent for such purposes.
(i) Execution of this Agreement shall be evidence of each
Borrower's consent for the Lien of Agent on the Vehicles indicated on the
Certificates of Title.
4.10 GRANTS, RIGHTS AND REMEDIES. The Liens and security interests
granted by each Borrower to Agent (for the benefit of Lender Group) by and
pursuant to Section 4.1 hereof may be independently granted by the Loan
Documents hereafter entered into. This Agreement, the Interim Order, the Final
Order and such other Loan Documents supplement each other, and the grants,
priorities, rights and remedies of Agent hereunder and thereunder are
cumulative.
4.11 NO FILINGS REQUIRED. The Liens and security interests granted
by each Borrower to Agent (for the benefit of Lender Group) herein shall be
deemed valid, binding, continuing,
69
enforceable and fully-perfected first priority Liens on the Collateral by entry
of the Interim Order and the Final Order, as the case may be, subject only to
(a) the Carve-Out Expenses up to the Carve-Out Amount, (b) Senior Claims, and
(c) recoveries under Avoidance Actions, which claims to the Avoidance Actions
shall attach pari passu with other administrative claimants. Agent shall not be
required to file any financing statements, notices of Lien or similar
instruments in any jurisdiction or filing office or to take any other action in
order to validate or perfect the Liens and security interests granted by or
pursuant to this Agreement, the Interim Order, the Final Order or any other Loan
Document.
4.12 SURVIVAL. The Liens and security interests granted to Agent
(for the benefit of Lender Group), the priority of such Liens and security
interests, and the administrative priorities and other rights and remedies
granted to Lender Group pursuant to this Agreement, the Interim Order, the Final
Order and the other Loan Documents (specifically including but not limited to
the existence, perfection and priority of the Liens and security interest
provided herein and therein) and the administrative priority provided herein and
therein shall not be modified, altered or impaired in any manner by any other
financing or extension of credit or incurrence of debt by any Borrower (pursuant
to Section 364 of the Bankruptcy Code or otherwise), or by any dismissal or
conversion of the Chapter 11 Case, or by any other act or omission whatsoever.
Without limitation, notwithstanding any such order, financing, extension,
incurrence, dismissal, conversion, act or omission;
(a) except for (i) the Carve-Out Expenses up to the
Carve-Out Amount, (ii) Senior Claims, and (iii) recoveries under Avoidance
Actions, which claims to the Avoidance Actions shall attach pari passu with
other administrative claimants, no costs or expenses of administration which
have been or may be incurred in the Chapter 11 Case or any conversion of the
same or in any other proceedings related thereto, and no priority claims, are or
will be prior to or on a parity with any claim of Agent and Lenders against any
Borrower in respect of any Obligation;
(b) the Liens and security interests granted by each
Borrower to Agent (for the benefit of Lender Group) by and pursuant to the
Interim Order, the Final Order and Section 4.1 hereof shall constitute valid,
binding, continuing, enforceable and fully-perfected first priority Liens,
subject only to (i) the Carve-Out Expenses up to the Carve-Out Amount, (ii)
Senior Claims, and (iii) recoveries under Avoidance Actions, which claims to the
Avoidance Actions shall attach pari passu with other administrative claimants,
and shall be prior to all other Liens and interests, now existing or hereafter
arising, in favor of any other creditor or any other Person whatsoever; and
(c) the Liens and security interests granted by each
Borrower to Agent (for the benefit of Lender Group) by and pursuant to the
Interim Order, the Final Order and Section 4.1 hereof shall continue to be
valid, binding, continuing, enforceable and fully-perfected without the
necessity for Agent to file any financing statements or to otherwise perfect
such Liens and security interests under applicable non-bankruptcy law.
70
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties to
the Lender Group which representations and warranties shall be true, correct,
and complete, in all material respects, as of the date hereof, and shall be
true, correct, and complete, in all material respects, as of the Closing Date,
and at and as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Borrower and each Guarantor has good and
indefeasible title to its assets, free and clear of Liens except for Permitted
Liens. Each Borrower and each Guarantor is the vested fee owner of each parcel
of Real Property Collateral set forth next to its name on Schedule R-1 hereto,
and such ownership is free and clear of all title defects and Liens, except
Permitted Liens.
5.2 [INTENTIONALLY OMITTED.]
5.3 [INTENTIONALLY OMITTED.]
5.4 EQUIPMENT. All of the Equipment is used or held for use in
Borrowers' or Guarantors' businesses and is fit for such purposes.
5.5 LOCATION OF EQUIPMENT. The Equipment of Borrowers and
Guarantors is stored only at the locations permitted by Section 6.9 hereof.
5.6 EQUIPMENT RECORDS. Each Borrower and each Guarantor keeps
correct and accurate records itemizing and describing the type, quality, and
quantity of its Equipment and the book value thereof.
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN; ORGANIZATIONAL ID
NUMBER. The chief executive office of each Borrower and each Guarantor is
located at the address indicated in Schedule 5.7 and each Borrower's and each
Guarantor's FEIN and Organizational ID Number are identified in Schedule 5.7. As
of the Closing Date, each Borrower's and each Guarantor's exact legal name is as
set forth on the signature pages to the Agreement, and in the 5 years prior to
the Closing Date no Borrower and no Guarantor has been known by any other name,
or had a business at any address other than those specified on Schedule 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES; AFFILIATES.
(a) Each Borrower and each Guarantor is duly organized
and existing and in good standing under the laws of the jurisdiction of its
organization and qualified to do business in any state where the failure to be
so qualified reasonably could be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8(b), is a complete and
accurate description of the authorized capital Stock of each Borrower and each
Guarantor, by class, and, as of the Closing
71
Date, a description of the number of shares of each such class that are issued
and outstanding. Other than as described on Schedule 5.8(b), there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower's and each Guarantor's capital Stock, including any right of conversion
or exchange under any outstanding security or other instrument. Neither any
Borrower nor any Guarantor is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital Stock or any security convertible into or exchangeable for any of its
capital Stock.
(c) Set forth on Schedule 5.8(c), is a complete and
accurate list of each Borrower's and each Guarantor's direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their organization; (ii) the
number of shares of each class of common and preferred Stock authorized for each
of such Subsidiaries; and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by the applicable
Borrower or Guarantor. All of the outstanding capital Stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.8(d), there are no
subscriptions, options, warrants, or calls relating to any shares of any
Borrower's or any Guarantor's Subsidiaries' capital Stock, including any right
of conversion or exchange under any outstanding security or other instrument. No
Borrower, Guarantor or any of their respective Subsidiaries is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of any Borrower's or any Guarantor's Subsidiaries' capital
Stock or any security convertible into or exchangeable for any such capital
Stock.
(e) Set forth on Schedule 5.8(e) is a complete and
accurate list of each Borrower's and each Guarantor's Affiliates showing the
relation (whether through direct ownership, common ownership or otherwise)
between such Borrower and such Affiliates.
(f) The Dormant Subsidiaries (i) are inactive and do not
engage in any business activities, (ii) do not have assets with an aggregate
fair market value in excess of $100,000, and (iii) do not have any annual
operating expenditures or other liabilities.
(g) Each of the Bankrupt Subsidiaries is the subject of
an Insolvency Proceeding as of the Closing Date.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party have been duly authorized by all necessary action on the part of
such Borrower.
(b) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party do not and will not (i) violate any provision of federal, state,
or local law or regulation applicable to any Borrower, the Governing Documents
of any Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation of any Borrower, including without
limitation the Material Contracts, except defaults
72
that are stayed by the Bankruptcy Court, (iii) result in or require the creation
or imposition of any Lien of any nature whatsoever upon any properties or assets
of any Borrower, other than Permitted Liens, or (iv) require any approval of any
Borrower's interest holders or any approval or consent of any Person under any
material contractual obligation of any Borrower, including without limitation
the Material Contracts.
(c) Other than the entry of the Interim Order and the
Final Order, the execution, delivery, and performance by each Borrower of this
Agreement and the Loan Documents to which such Borrower is a party do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority or other Person.
(d) As to each Borrower, this Agreement and the other
Loan Documents to which such Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Borrower
will be the legally valid and binding obligations of such Borrower, enforceable
against such Borrower in accordance with their respective terms.
(e) The Agent's Liens are validly created, perfected, and
first priority Liens, subject only to Permitted Liens.
(f) The execution, delivery, and performance by each
Guarantor of the Loan Documents to which it is a party have been duly authorized
by all necessary action on the part of such Guarantor.
(g) The execution, delivery, and performance by each
Guarantor of the Loan Documents to which it is a party do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to such Guarantor, the Governing Documents of such Guarantor, or any order,
judgment, or decree of any court or other Governmental Authority binding on such
Guarantor, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of such Guarantor, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
such Guarantor, other than Permitted Liens, or (iv) require any approval of such
Guarantor's interest holders or any approval or consent of any Person under any
material contractual obligation of such Guarantor.
(h) Other than the filing of Uniform Commercial Code
financing statements, fixture filings and Mortgages, the execution, delivery,
and performance by each Guarantor of the Loan Documents to which such Guarantor
is a party do not and will not require any registration with, consent, or
approval of, or notice to, or other action with or by, any Governmental
Authority or other Person.
(i) The Loan Documents to which any Guarantor is a party,
and all other documents contemplated hereby and thereby, when executed and
delivered by such Guarantor will be legally valid and binding obligations of
such Guarantor, enforceable against Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
73
5.10 LITIGATION. Other than those matters disclosed on Schedule
5.10, there are no actions, suits, arbitrations, administrative hearings or
other proceedings pending or, to the best knowledge of Borrowers, threatened
against Borrowers, Guarantors or any of their Subsidiaries (excluding the
Insurance Subsidiaries), as applicable, except for (a) the Chapter 11 Case, (b)
matters that are fully covered by insurance (subject to customary deductibles),
(c) routine litigation arising in the ordinary course of business that is not
material and (d) matters arising after the Second Relief Date that, if decided
adversely to Borrowers, Guarantors, or any of their Subsidiaries, as applicable,
reasonably could not be expected to result in a Material Adverse Change.
5.11 FINANCIAL STATEMENTS. NO MATERIAL ADVERSE CHANGE. (a) All
financial statements relating to Borrowers or Guarantors that have been
delivered by Borrowers or Guarantors to the Lender Group (i) have been prepared
in accordance with GAAP (except, in the case of unaudited financial statements,
for the lack of footnotes and being subject to year-end audit adjustments), (ii)
are true and correct in all material respects, and accurately present Borrowers'
(or Guarantors', as applicable) financial condition as of the date thereof,
(iii) do not and will not contain any untrue statement of material fact or omit
to state any material fact necessary in order to make such statements contained
therein not misleading in light of the circumstances under which such statements
were made. All Projections, if any, that have been made or will be prepared by
or on behalf of Borrowers or any of their respective representatives and made
available to Agent, and the Lenders have been or will be prepared in good faith
based upon assumptions that are reasonable at the time made and at the time the
related Projections are made available to Agent and the Lenders.
(b) Other than (i) the filing of the Chapter 11 Case,
(ii) the withdrawal by PriceWaterhouseCoopers of its audit letter with respect
to Borrowers' financial statements for the fiscal year ended as of March 31,
2002 and (iii) such other matters as have been set forth in writing by Borrowers
to Agent on or before June 20, 2003, there has not been a Material Adverse
Change with respect to Borrowers (or Guarantors, as applicable) since the date
of the latest financial statements submitted to the Lender Group on or before
the Closing Date.
5.12 [INTENTIONALLY OMITTED.]
5.13 EMPLOYEE BENEFITS. No Borrower, Guarantor, Subsidiary of a
Borrower or a Guarantor, or ERISA Affiliate of a Borrower or a Guarantor
maintains or contributes to any Benefit Plan, other than those listed on
Schedule 5.13. Each Borrower, Guarantor, Subsidiary of a Borrower or a Guarantor
and ERISA Affiliate of a Borrower or a Guarantor has satisfied the minimum
funding standards of ERISA and the IRC with respect to each Benefit Plan to
which it is obligated to contribute. No ERISA Event has occurred nor has any
other event occurred that may result in an ERISA Event that reasonably could be
expected to result in a Material Adverse Change. No Borrower, Guarantor,
Subsidiary of a Borrower or a Guarantor, ERISA Affiliate of a Borrower or
Guarantor, or, to Borrowers' knowledge, fiduciary of any Benefit Plan is subject
to any direct or indirect liability with respect to any Benefit Plan under any
applicable law, treaty, rule, regulation, or agreement. No Borrower, Guarantor,
Subsidiary of a Borrower or a Guarantor, or ERISA Affiliate of a Borrower or a
Guarantor is required to provide security to any Benefit Plan under Section
401(a)(29) of the IRC.
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5.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 5.14,
(a) to Borrowers' knowledge, no properties or assets of Borrowers or Guarantors
have ever been used by Borrowers, Guarantors, or by previous owners or operators
in the disposal of, or to produce, store, handle, treat, release, or transport,
any Hazardous Materials, where such production, storage, handling, treatment,
release or transport was in violation, in any material respect, of applicable
Environmental Law, (b) to Borrowers' knowledge, no properties or assets of
Borrowers or Guarantors have ever been designated or identified in any manner
pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) no Borrower or Guarantor has received notice that a Lien
arising under any Environmental Law has attached to any revenues or to any Real
Property owned or operated by Borrowers, and (d) no Borrower or Guarantor has
received a summons, citation, notice, or directive from the Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by any Borrower or any Guarantor resulting in the
releasing or disposing of Hazardous Materials into the environment.
5.15 BROKERAGE FEES. Borrowers and Guarantors have not utilized the
services of any broker or finder in connection with Borrowers' obtaining
financing from the Lender Group under this Agreement and no brokerage commission
or finders fee is payable by Borrowers or Guarantors in connection herewith.
5.16 INTELLECTUAL PROPERTY. Each Borrower or each Guarantor owns,
or holds licenses in, all trademarks, trade names, copyrights, patents, patent
rights, and licenses that are necessary to the conduct of its business as
currently conducted. Attached hereto as Schedule 5.16 is a true, correct, and
complete listing of all material patents, patent applications, trademarks,
trademark applications, copyrights, and copyright registrations as to which each
Borrower or each Guarantor is the owner or is an exclusive licensee.
5.17 [INTENTIONALLY OMITTED.]
5.18 DDAs. Set forth on Schedule 5.18 are all Borrowers' and
Guarantors' DDAs, including, with respect to each depository (i) the name and
address of such depository, and (ii) the account numbers of the accounts
maintained with such depository.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a
whole) furnished by or on behalf of Borrowers or Guarantors in writing to Agent
or any Lender (including all information contained in the Schedules hereto or in
the other Loan Documents) for purposes of or in connection with this Agreement,
the other Loan Documents, or any transaction contemplated herein or therein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Borrowers or Guarantors in writing to the Agent or any Lender
will be, true and accurate, in all material respects, on the date as of which
such information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such
information was provided. On the Closing Date, the Projections represent, and as
of the date on which any other Projections are delivered to Agent, such
additional Projections represent Borrowers' good faith best estimate of its
future performance for the periods covered thereby.
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5.20 INDEBTEDNESS, ETC.
(a) Set forth on Schedule 5.20(a) is a true and complete
list of all Indebtedness of each Borrower or Guarantors outstanding immediately
prior to, the Closing Date that is to remain outstanding after the Closing Date
and such Schedule accurately reflects the aggregate principal amount of such
Indebtedness.
(b) Set forth on Schedule 5.20(b) is a true and complete
summary of all TRAC Lease Transactions in existence as of the Closing Date that
are to remain outstanding after the Closing Date.
5.21 INTERIM ORDER. The Interim Order has been validly entered by
the Court and has not been stayed, reversed, vacated or otherwise modified
except with the consent of the Required Lenders.
5.22 RESERVATION MANAGEMENT SYSTEM. The Reservation Management
System is owned by A&M Associates, Inc., a Nevada corporation, free and clear of
claims and encumbrances.
5.23 ADMINISTRATIVE PRIORITY. The Lien and security interest of the
Agent (for the benefit of the Lender Group and the Bank Product Providers) on
the Collateral shall be a valid and perfected first priority Lien subject to the
Carve-Out Expenses up to the Carve-Out Amount and Senior Claims.
5.24 APPOINTMENT OF TRUSTEE OR EXAMINER; LIQUIDATION. No order has
been entered in the Chapter 11 Case (i) for the appointment of a Chapter 11
trustee, (ii) for the appointment of an examiner with enlarged powers (beyond
those set forth in Sections 1106(a)(3) and (4) of the Bankruptcy Code) under
Section 1106(b) of the Bankruptcy Code or (iii) to convert the Chapter 11 Case
to a Chapter 7 case or to dismiss the Chapter 11 Case.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of
all of the Commitments and payment in full of the Obligations, Borrowers shall
and shall cause each of their respective Subsidiaries to do all of the
following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that
enables such Loan Party to produce financial statements in accordance with GAAP
and maintain records pertaining to the Collateral that contain information as
from time to time reasonably may be requested by Agent.
6.2 COLLATERAL REPORTING. Administrative Borrower shall provide
Agent the following information (and if required by Agent, with copies to each
Lender) relating to the Collateral:
(a) On a monthly basis, in a form reasonably satisfactory
to Agent, (i) not later than the fifteenth (15th) day of each month, a summary
aging, by vendor, of each Loan
76
Party's accounts payable, and (ii) not later than the twenty-second (22nd) day
of each month, any book overdraft.
(b) On a quarterly basis, not later than 15 days after
the end of each quarter, a report by book value of all box-trucks and pickup
trucks owned by Borrowers (and subject to Agent's Lien) or Guarantors as of the
last day of such quarter, together with a reconciliation of any box-trucks and
pickup trucks bought or sold since the delivery of the prior report to Agent.
(c) Upon the delivery of any updated Fair Market
Valuation and on each date monthly financial statements are delivered to Agent,
a new Borrowing Base Certificate together with an updated schedule of Real
Property Collateral showing a reconciliation of any Real Property Collateral
bought or sold since the delivery of the prior Borrowing Base Certificate to the
Agent.
(d) On a quarterly basis, a report of the name and
location of all U-Haul Dealers as of such date (the "Dealer List").
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent,
with copies to each Lender:
(a) as soon as available, but in any event within 45 days
after the end of each month during each of Parent's fiscal years,
(i) a company prepared Consolidated balance
sheet, income statement, and statement of cash flow covering
Parent's and its Subsidiaries' operations during such period,
(ii) a certificate signed by the chief financial
officer of Parent to the effect that:
(A) the financial statements delivered
hereunder have been prepared in accordance with GAAP
(except for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present in
all material respects the financial condition of
Parent and its Subsidiaries,
(B) the representations and warranties
of Borrowers contained in this Agreement and the
other Loan Documents are true and correct in all
material respects on and as of the date of such
certificate, as though made on and as of such date
(except to the extent that such representations and
warranties relate solely to an earlier date), and
(C) there does not exist any condition
or event that constitutes a Default or Event of
Default (or, to the extent of any non-compliance,
describing such non-compliance as to which he or she
may have knowledge and what action Borrowers have
taken, are taking, or propose to take with respect
thereto), and
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(iii) for each month that is the date on which a
financial covenant in Section 7.20 is to be tested, a
Compliance Certificate demonstrating, in reasonable detail,
compliance at the end of such period with the applicable
financial covenants contained in Section 7.20,
(b) as soon as available, but in any event within 120
days after the end of each of Parent's fiscal years,
(i) financial statements of Parent and its
Subsidiaries for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Agent
and certified, without any qualifications, by such accountants
to have been prepared in accordance with GAAP (such audited
financial statements to include a balance sheet, income
statement, and statement of cash flow and, if prepared, such
accountants' letter to management), and
(ii) a certificate of such accountants addressed
to Agent and the Lenders stating that such accountants do not
have knowledge of the existence of any Default or Event of
Default under Section 7.20,
(c) as soon as available, but in any event within 30 days
prior to the start of each of Parent's fiscal years, copies of Borrowers'
Projections, in form and substance (including as to scope and underlying
assumptions) satisfactory to the Lender Group, in its sole discretion, for the
forthcoming 3 years, year by year, and for the forthcoming fiscal year, month by
month, certified by the chief financial officer of Parent as being such
officer's good faith best estimate of the financial performance of Parent and
its Subsidiaries during the period covered thereby,
(d) if, when and to the extent filed by any Loan Party
with the Court, the SEC or any other Governmental Authority,
(i) 10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports,
(ii) any other filings made by any Loan Party
with the SEC,
(iii) any other financial information filed in the
Chapter 11 Case or otherwise shared with the Committee,
(iv) copies of Borrowers' federal income tax
returns, and any amendments thereto, filed with the Internal
Revenue Service, and
(v) any other information that is provided by
Parent to its shareholders generally,
(e) if and when filed by any Loan Party and as requested
by Agent, reasonably satisfactory evidence of payment of applicable excise and
property taxes in each jurisdictions in which (i) any Loan Party conducts
business, owns real property or is required to pay any such excise or real
property tax, (ii) where any Loan Party's failure to pay any such applicable
excise or property tax would result in a Lien on the properties or assets of any
Loan
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Party, or (iii) where any Loan Party's failure to pay any such applicable excise
tax reasonably could be expected to result in a Material Adverse Change,
(f) promptly after the commencement thereof, notice of
all actions, suits or proceedings brought by or against any Loan Party before
any Governmental Authority that, if determined adversely to such Loan Party,
could reasonably be expected to result in a Material Adverse Change,
(g) as soon as a Borrower has knowledge of any event or
condition that constitutes a Default or an Event of Default, notice thereof and
a statement of the curative action that Borrowers propose to take with respect
thereto, and
(h) upon the request of Agent or the Lender Group, any
other report reasonably requested relating to the financial condition of any
Loan Party.
In addition to the financial statements referred to above,
Borrowers agree to deliver financial statements prepared on both a consolidated
and consolidating basis (in accordance with GAAP) and a Consolidated basis (as
defined herein) and that, except for the Insurance Subsidiaries, no Borrower, or
any Subsidiary of a Borrower, will have a fiscal year different from that of
Parent. Borrowers agree to cooperate with Agent to allow Agent to consult with
their certified public accountants if Agent reasonably requests the right to do
so and that, in such connection, their independent certified public accountants
are authorized to communicate with Agent and to release to Agent whatever
financial information concerning Borrowers or their Subsidiaries that Agent
reasonably may request. Each Borrower waives the right to assert a confidential
relationship, if any, it may have with any accounting firm or service bureau in
connection with any information requested by Agent pursuant to or in accordance
with this Agreement, and agree that Agent may contact directly any such
accounting firm or service bureau in order to obtain such information.
6.4 GUARANTOR REPORTS. Cause each Guarantor to deliver its annual
financial statements at the time when Parent provides its audited financial
statements to Agent, but only to the extent such Guarantor's Financial
Statements are not consolidated with Parent's Financial Statements, and copies
of all federal income tax returns as soon as the same are available and in any
event no later than 30 days after the same are required to be filed by law.
6.5 DOCUMENTS FILED WITH THE COURT OR DELIVERED TO THE U.S.
TRUSTEE OR COMMITTEE. At the time any report (including, without limitation,
monthly reports), projection, prospectus or other similar document is filed with
the Court, provided to the U.S. Trustee, as applicable, deliver to Agent and
each Lender copies of such monthly report, projection, prospectus or other
report describing the business and/or financial condition of Borrowers.
Borrowers shall also promptly provide Agent with copies of all documents or
information provided by or on behalf of any Borrower to the Committee with
respect to the Chapter 11 Case.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct to their business
in good working order and condition, ordinary wear and tear excepted, and comply
at all times with the provisions of all leases to which it is a party as lessee,
so as to prevent any loss or forfeiture thereof or thereunder.
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6.7 TAXES. Except as permitted by the Court, cause all assessments
and taxes, whether real, personal, or otherwise, due or payable by, or imposed,
levied, or assessed against any Borrower, any Subsidiary of a Borrower or any of
their assets to be paid in full, before delinquency or before the expiration of
any extension period, except to the extent that the validity of such assessment
or tax shall be the subject of a Permitted Protest. Except as permitted by the
Court, each Borrower will, and will cause each of its Subsidiaries to, make
timely payment or deposit of all tax payments and withholding taxes required of
it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof reasonably satisfactory to Agent indicating that the
applicable Borrower or its Subsidiary has made such payments or deposits.
Borrowers shall deliver reasonably satisfactory evidence of payment of
applicable excise taxes in each jurisdictions in which any Borrower or its
Subsidiary is required to pay any such excise tax.
6.8 INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting
their and their Subsidiaries' and assets wherever located, covering loss or
damage by fire, theft, explosion, and all other hazards and risks as ordinarily
are insured against by other Persons engaged in the same or similar businesses.
Borrowers also shall (and shall cause their Subsidiaries to) maintain business
interruption, public liability, and product liability insurance, as well as
insurance against larceny, embezzlement, and criminal misappropriation. All such
policies of insurance shall be in such amounts and with such insurance companies
as are reasonably satisfactory to Agent. Borrowers shall deliver copies of all
such policies to Agent with a satisfactory lender's loss payable endorsement
naming Agent as sole loss payee or additional insured, as appropriate. Each
policy of insurance or endorsement shall contain a clause requiring the insurer
to give not less than 30 days prior written notice to Agent in the event of
cancellation of the policy for any reason whatsoever.
(b) Administrative Borrower shall give Agent prompt
notice of any loss in excess of $100,000 for Vehicles covered by such insurance
and any loss in excess of $500,000 for Real Property covered by insurance. Agent
shall have the exclusive right to adjust any losses payable under any such
insurance policies in excess of $500,000 (or in any amount during the existence
of an Event of Default), without any liability to Borrowers whatsoever in
respect of such adjustments. Any monies received as payment for any loss under
any insurance policy mentioned above (other than liability insurance policies)
or as payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid over to Agent to be applied at the option of the Required
Lenders either to the prepayment of the Obligations or shall be disbursed to
Administrative Borrower under staged payment terms reasonably satisfactory to
the Required Lenders for application to the cost of repairs, replacements, or
restorations. Any such repairs, replacements, or restorations shall be effected
with reasonable promptness and shall be of a value at least equal to the value
of the items or property destroyed prior to such damage or destruction.
(c) Borrowers shall not, nor shall they permit any of the
Guarantors to, take out separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained under this Section 6.8,
unless Agent is included thereon as named insured with the loss payable to Agent
under a lender's loss payable endorsement or its equivalent.
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Administrative Borrower immediately shall notify Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and full particulars
as to the policies evidencing the same, and copies of such policies promptly
shall be provided to Agent.
6.9 LOCATION OF EQUIPMENT. Store the Equipment of Loan Parties
only at the Real Property and the locations of the U-Haul Dealers named on the
Dealer List, excluding (a) Vehicles in-transit from one U-Haul Dealer location
to another U-Haul Dealer location, (b) Vehicles that have been leased in the
ordinary course of Borrowers' and Guarantors' businesses and consistent with
their past practices anywhere in the United States and Canada, and (c) Vehicles
located at new U-Haul Dealers added subsequent to the most recently provided
Dealer List. Borrowers shall, or shall cause the Guarantors to, update the
Reservation Management System on a regular basis consistent with their past
practices and shall grant Agent access to such system upon Agent's request.
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under
any leases to which any Borrower or any Guarantor is a party or by which any
Borrower's or any Guarantor's properties and assets are bound, unless (a) such
payments are the subject of a Permitted Protest or (b) the non-payment thereof
is permitted by the Bankruptcy Code.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Borrowers' obtaining
financing from the Lender Group under this Agreement. Borrowers agree and
acknowledge that payment of all such brokerage commissions or finders fees shall
be the sole responsibility of Borrowers, and each Borrower agrees to indemnify,
defend, and hold Agent and the Lender Group harmless from and against any claim
of any broker or finder arising out of Borrowers' obtaining financing from the
Lender Group under this Agreement.
6.13 EXISTENCE. At all times preserve and keep in full force and
effect each Borrower's and each Guarantor's valid existence and good standing
and any rights and franchises material to Borrowers' and Guarantors' businesses.
6.14 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any
Borrower or any Subsidiary of a Borrower free of any Environmental Liens or post
bonds or other financial assurances sufficient to satisfy the obligations or
liability evidenced by such Environmental Liens, (b) comply, in all material
respects, with Environmental Laws and provide to Agent documentation of such
compliance which Agent reasonably requests, (c) promptly notify Agent of any
release of a Hazardous Material of any reportable quantity from or onto property
owned or operated by any Borrower and take any Remedial Actions required to
▇▇▇▇▇ said release or otherwise to come into compliance with applicable
Environmental Law, and (d) promptly, but in
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any event within 5 days of its receipt thereof, provide Agent with written
notice of the receipt of any of the following: (i) notice that an Environmental
Lien has been filed against any of the real or personal property of any Borrower
or any Subsidiary of a Borrower, (ii) commencement of any Environmental Action
or notice that an Environmental Action will be filed against any Borrower or any
Subsidiary of a Borrower, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.
6.15 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made. The foregoing notwithstanding, any notification
pursuant to the foregoing provision will not cure or remedy the effect of the
prior untrue statement of a material fact or omission of any fact nor shall any
such notification have the effect of amending or modifying this Agreement or any
of the Schedules hereto.
6.16 MATERIAL CONTRACTS; AFFILIATE CONTRACTS. In the event any
Borrower or Guarantor shall enter into any Material Contract or, subject to
Section 7.14, any new Affiliate Contract, after the Closing Date, deliver to
Agent, within 30 days of entering into such Material Contract or Affiliate
Contract, an updated Schedule M-1 or Schedule A-1, as applicable, reflecting the
addition of such Material Contract or Affiliate Contract, together with a copy
of such executed Material Contract or Affiliate Contract. Each Borrower and
Guarantor shall also provide Agent with an executed copy of any contract with
any of SAC Holding, SSI or PMSR executed after the Closing Date.
6.17 EMPLOYEE BENEFITS.
(a) (i) Promptly deliver, and in any event within 10
Business Days after any Borrower or any Subsidiary of a Borrower knows or should
know that an ERISA Event has occurred that reasonably could be expected to
result in a Material Adverse Change, a written statement of the chief financial
officer of Parent describing such ERISA Event and any action that is being
taking with respect thereto by any such Borrower, any such Subsidiary or ERISA
Affiliate, and any action taken or threatened by the IRS, Department of Labor,
or PBGC, and such Borrower or such Subsidiary, as applicable, shall be deemed to
know all facts known by the administrator of any Benefit Plan of which it is the
plan sponsor, (ii) promptly deliver, and in any event within 3 Business Days
after the filing thereof with the IRS, a copy of each funding waiver request
filed with respect to any Benefit Plan and all communications received by any
Borrower, any Subsidiary of a Borrower or, to the knowledge of such Borrower,
any ERISA Affiliate with respect to such request, and (iii) promptly deliver,
and in any event within 3 Business Days after receipt by any Borrower, any
Subsidiary of a Borrower or, to the knowledge of any Borrower, any Subsidiary,
any ERISA Affiliate, of the PBGC's intention to terminate a Benefit Plan or to
have a trustee appointed to administer a Benefit Plan, copies of each such
notice.
(b) Cause to be delivered to Lender, upon Agent's
request, each of the following: (i) a copy of each Benefit Plan (or, where any
such plan is not in writing, complete description thereof) (and if applicable,
related trust agreements or other funding instruments) and all amendments
thereto, all written interpretations thereof and written descriptions thereof
that
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have been distributed to employees or former employees of any Borrower or its
Subsidiaries; (ii) the most recent determination letter issued by the IRS with
respect to each Benefit Plan; (iii) for the 3 most recent plan years, annual
reports on Form 5500 Series required to be filed with any governmental agency
for each Benefit Plan; (iv) all actuarial reports prepared for the last 3 plan
years for each Benefit Plan; (v) a listing of all Multiemployer Plans, with the
aggregate amount of the most recent annual contributions required to be made by
any Borrower, any Subsidiary of a Borrower, or any ERISA Affiliate to each such
plan and copies of the collective bargaining agreements requiring such
contributions; (vi) any information that has been provided to any Borrower, any
Subsidiary of a Borrower or any ERISA Affiliate regarding withdrawal liability
under any Multiemployer Plan; and (vii) the aggregate amount of the most recent
annual payments made to former employees of any Borrower or its Subsidiaries
under any Retiree Health Plan.
6.18 REAL ESTATE. If at any time after the Closing Date, any
Borrower or any Guarantor acquires any fee interest in Real Property with a fair
market valuation in excess of $500,000, such Borrower shall, or Borrowers shall
cause such Guarantor to, promptly execute, deliver and, with respect to any
Guarantor, record, a first priority Mortgage in favor of Agent covering such
Real Property interest, in form and substance reasonably satisfactory to Agent,
and, with respect to any Guarantor (a) provide the Agent with a Mortgage Policy
insuring the first priority Lien of said Mortgage in such Real Property
encumbered thereby in an amount reasonably acceptable to Agent and subject only
to Permitted Liens and to such other exceptions as are reasonably satisfactory
to Agent, (b) a satisfactory legal description of such property and an opinion
from special counsel to such Guarantor, (c) to the extent necessary under
applicable law, Uniform Commercial Code financing statements covering fixtures,
in each case appropriately completed and duly executed, for filing in the
appropriate county land office and (d) evidence that such Person shall have paid
to the applicable title insurance company all expenses of such title insurance
company in connection with the issuance of such reports and in addition shall
have paid to such title insurance company an amount equal to the recording and
stamp taxes (including mortgage recording taxes), if any, payable in connection
with recording such Mortgages in the appropriate county land offices. In
addition, each such Borrower or Guarantor delivering a Mortgage pursuant to this
Section 6.18 shall deliver a copy of all existing phase-I or phase-II
environmental reports with respect to such Real Property to Agent and, upon the
reasonable request of Agent, cause to be performed, at Borrowers' joint and
several cost and expense, phase-I or phase-II environmental audits, in form and
substance and by an independent firm reasonably satisfactory to Agent.
7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of
all of the Commitments and payment in full of the Obligations, Borrowers will
not and will not permit any of their respective Subsidiaries to do any of the
following:
7.1 INDEBTEDNESS, ETC. Create, incur, assume, suffer to exist,
guarantee, or otherwise become or remain, directly or indirectly, liable with
respect to any Indebtedness, or incur obligations under TRAC Lease Transactions,
except:
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(a) Indebtedness evidenced by this Agreement and the
other Loan Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit;
(b) Indebtedness in existence as of the Closing Date set
forth on Schedule 5.20(a), and obligations under TRAC Lease Transactions as of
the Closing Date set forth on Schedule 5.20(b);
(c) Purchase Money Indebtedness and TRAC Lease
Obligations incurred after the Closing Date in an aggregate amount not to exceed
$100,000,000;
(d) guarantees permitted under Section 7.6; and
(e) Indebtedness composing Permitted Investments.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens. The prohibition provided for in this Section 7.2
specifically includes, without limitation, any effort by any Borrower or its
Subsidiaries in the Chapter 11 Case to "prime" or create pari passu to any
claims or interests of the Lenders any Lien in accordance with Sections 363 and
364(d)(i) of the Bankruptcy Code or otherwise, irrespective of whether such
claims or interests may be "adequately protected".
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation, reorganization,
or recapitalization, or reclassify its Stock (other than in connection with a
confirmed plan of reorganization satisfactory to Agent and the Lenders), except
that, so long as no Default then exists hereunder or would be caused thereby and
the Agent receives written notice of any such merger at least 30 days prior to
the effectiveness thereof if such merger involves a Loan Party: (i) any
Subsidiary that is not a Loan Party may merge into any other Subsidiary that is
not a Loan Party, and (ii) any Loan Party (other than Parent, U-Haul or AREC)
may merge into any other Loan Party (other than Parent, U-Haul or AREC);
provided, however, (x) the Person surviving such merger shall be a Loan Party,
and (y) Agent shall have received, upon the effectiveness of such merger, such
loan documents, title insurance and opinions of counsel as Agent may request to
continue or insure the priority and perfection of Agent's liens on the
Collateral or the obligations of any such Loan Party under any of the Loan
Documents, including, without limitation, the documents required by Section
7.13(b) hereof. Notwithstanding the foregoing, a Subsidiary that is not an
Insurance Subsidiary shall not merge with any Insurance Subsidiary.
(b) Liquidate, wind up, or dissolve any Borrower or any
Borrower's Subsidiaries (or suffer any liquidation or dissolution), except that
Parent may liquidate, dissolve or wind up any Subsidiary (other than AREC and
U-Haul or any Insurance Subsidiary) so long as (i) no Default then exists
hereunder or would be caused thereby and the Agent receives written notice of
any such action at least 30 days prior to the effectiveness thereof, (ii) the
assets of such Subsidiary are transferred to another Subsidiary of Parent or, if
such Subsidiary is a Loan Party, to another Loan Party and such assets remain
subject to a first priority (subject to Permitted Liens) perfected Lien under a
Loan Document after such transfer, (iii) Agent shall have received
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such loan documents, title insurance and opinions of counsel as Agent may
request to continue or insure the priority and perfection of Agent's liens on
such assets or the obligations of any such Subsidiary under any of the Loan
Documents, including, without limitation, the documents required by Section
7.13(b) hereof. Notwithstanding the foregoing, a dissolving or liquidating
Subsidiary that is not an Insurance Subsidiary shall not transfer assets to any
Insurance Subsidiary.
(c) Except for Permitted Dispositions or as permitted by
clauses (a) or (b) above, convey, sell, lease, license, assign, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of the
assets of any Borrower or any Guarantor.
7.5 CHANGE NAME. Change any Borrower's or Guarantor's name, FEIN,
Organizational ID Number, corporate structure, or identity, or add any new
fictitious name, or reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction set forth on Schedule 5.7; provided,
however, that a Borrower or Guarantor may change its name upon at least 30 days
prior written notice by Administrative Borrower to Agent of such change and so
long as, at the time of such written notification, such Borrower provides or
authorizes the filing of any Uniform Commercial Code financing statements or
fixture filings necessary to perfect and continue perfected Agent's Liens.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable
with respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Borrowers or
Guarantors or which are transmitted or turned over to Agent, except for (a)
guarantee obligations of Parent existing as of Closing Date, (b) guarantee
obligations of Parent with respect to the PMSR Support Party Documents, and (c)
guarantee obligations with respect to TRAC Leases in the ordinary course of
business, to the extent the obligations thereunder are permitted by Section 7.1
hereof and consistent with past practices.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of
Borrowers' or any Subsidiary's business.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Prepay, redeem, defease, purchase, or otherwise
acquire any Indebtedness of any Loan Party, other than (i) the Obligations in
accordance with this Agreement, (ii) to the extent allowed by the Court in the
Interim Order, the Final Order or any other order entered in the Chapter 11 Case
on or prior to the Closing Date, or (iii) with the consent of the Required
Lenders.
(b) Except in connection with a plan of reorganization
confirmed by the Court, in form and substance satisfactory to the Lender Group,
directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of any agreement, instrument, document, indenture, or other
writing evidencing or concerning Indebtedness permitted under Section 7.1.
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(c) Amend, modify or otherwise change its Governing
Documents, including, without limitation, by the filing or modification of any
certificate of designation, or any agreement or arrangement entered into by it
with respect to any of its capital Stock (including any shareholders'
agreement), or enter into any new agreement with respect to any of its capital
Stock, except as appropriate to accomplish a transaction permitted pursuant to
Section 7.3(a) or Section 7.3(b), or (ii) amend, modify or otherwise change any
Material Contract except any such amendments, modifications or changes or any
such new agreements or arrangements pursuant to this paragraph (c) that, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Change, or (iii) amend, modify or otherwise change any
Affiliate Contract or any contract with SAC Holding, SSI or PMSR except in
compliance with Section 7.14 hereof.
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control, other than in connection with the
consummation of a plan of reorganization satisfactory to Agent and the Lenders.
7.10 [INTENTIONALLY OMITTED.]
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than common Stock) on, or purchase,
acquire, redeem, or retire any of any Loan Party's Stock, of any class, whether
now or hereafter outstanding, except, so long as no Event of Default has
occurred and is continuing hereunder, distributions or declarations and payments
of dividends (a) by a Borrower to another Borrower or by a Guarantor to another
Loan Party, and (b) due to preferred stock of Borrowers and/or their
Subsidiaries in existence on the Closing Date to the extent allowed by the Court
and in an aggregate amount not to exceed $13,500,000 after the Closing Date.
7.12 ACCOUNTING METHODS. Modify or change their fiscal year or
their method of accounting (other than as may be required to conform to GAAP) or
enter into, modify, or terminate any agreement currently existing, or at any
time hereafter entered into with any third party accounting firm or service
bureau for the preparation or storage of Borrowers' or their Subsidiaries'
accounting records without said accounting firm or service bureau agreeing to
provide Agent information regarding the Collateral or Borrowers' and their
Subsidiaries financial condition.
7.13 FORMATION OF SUBSIDIARIES; INVESTMENTS. (a) Except for
Permitted Investments, directly or indirectly, make or acquire any Investment,
or incur any liabilities (including contingent obligations) for or in connection
with any Investment; provided, however, that Parent and its Subsidiaries shall
not have Permitted Investments (other than in the Cash Management Accounts) in
Deposit Accounts or Securities Accounts in excess of $3,000,000 in the aggregate
outstanding at any one time (excluding (i) Deposit Accounts or Securities
Accounts containing only the cash proceeds received from the WP ▇▇▇▇▇
Transaction (to the extent such proceeds will be fully utilized in such
transaction), PWC Litigation and the sale of the Junior Notes, and (ii) any
Deposit Accounts maintained by U-Haul solely in its capacity as manager of
properties owned by SAC Holding or SSI under a Management Agreement provided
U-Haul has no rights to or interest in the funds deposited therein) unless
Parent or any of its Subsidiaries, as applicable, and the applicable securities
intermediary or bank have entered into Control
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Agreements or similar arrangements governing such Permitted Investments, as
Agent shall determine in its Permitted Discretion, to perfect (and further
establish) the Agent's Liens in such Permitted Investments.
(b) Form any new Subsidiary or acquire any direct or
indirect Subsidiary after the Closing Date, unless (i) such Subsidiary is a
wholly-owned U.S. Subsidiary of a Loan Party, and such Loan Party shall (x)
cause such new Subsidiary to provide to Agent a joinder to this Agreement or the
Guaranty, the Guarantor Security Agreement, the Copyright Security Agreement,
and the Patent and Trademark Security Agreement, together with such other
security documents (including Mortgages with respect to any Real Property of
such new Subsidiary), as well as appropriate Uniform Commercial Code financing
statements (and with respect to all property subject to a Mortgage, fixture
filings), all in form and substance satisfactory to Agent (including being
sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in
and to the assets of such newly formed or acquired Subsidiary), (y) provide to
Agent a pledge agreement and appropriate certificates and powers or Uniform
Commercial Code financing statements, hypothecating all of the direct or
beneficial ownership interest in such new Subsidiary, in form and substance
satisfactory to Agent, and (z) provide to Agent all other documentation,
including one or more opinions of counsel satisfactory to Agent, which in its
opinion is appropriate with respect to the execution and delivery of the
applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all property subject to a
Mortgage), (ii) the acquisition or formation of such Subsidiary is approved by
the Court, if required, and (iii) Agent receives 30 days' prior written notice
of such formation or acquisition. Any document, agreement, or instrument
executed or issued subject to this Section 7.13 shall be a Loan Document.
7.14 TRANSACTIONS WITH AFFILIATES. Except as otherwise ordered by
the Court with the consent of Agent and the Required Lenders, directly or
indirectly enter into or permit to exist any transaction with any Affiliate of
any Borrower, SAC Holding, SSI or PMSR except for transactions that are in the
ordinary course of Borrowers' business, upon fair and reasonable terms, that are
fully disclosed to Agent, and that are no less favorable to Borrowers than would
be obtained in an arm's length transaction with a non-Affiliate. Borrowers shall
not, and shall not permit any of their Subsidiaries to, transfer any cash or
assets to the Dormant Subsidiaries or the Bankrupt Subsidiaries under any
circumstances whatsoever or guarantee or otherwise incur any Indebtedness on
behalf of such Dormant Subsidiaries or Bankrupt Subsidiaries.
7.15 SUSPENSION. Except as permitted by Section 7.3, suspend or go
out of a substantial portion of its business.
7.16 [INTENTIONALLY OMITTED.]
7.17 USE OF PROCEEDS. Use the Letters of Credit and the proceeds of
the Advances and the Term Loan for any purpose other than (a) on the Interim
Order Date, to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and (b) on the Interim Order Date or
thereafter, (i) for working capital and other general corporate purposes of
Borrowers, (ii) to repay some of the amounts outstanding to Existing Secured
Lender and such other Indebtedness arising prior to the Petition Date, as
ordered by the Court and permitted hereunder, and (iii) to pay the
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fees and expenses of Borrowers and Bankruptcy Professionals (including fees owed
to the U.S. Trustee), in each case consistent with the terms and conditions
hereof, for its lawful and permitted purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; EQUIPMENT WITH
BAILEES. Relocate its chief executive office to a new location without
Administrative Borrower providing 30 days' prior written notification thereof to
Agent and so long as, at the time of such written notification, the applicable
Borrower provides or authorizes, at the request of Agent, the filing of any
Uniform Commercial Code financing statements or fixture filings necessary to
perfect and continue perfected the Agent's Liens and also provides to Agent a
Collateral Access Waiver, a form of which Agent shall provide to Administrative
Borrower, with respect to such new location. The Equipment of Borrowers and
Guarantors shall not at any time now or hereafter be stored with a bailee,
warehouseman, or similar party (other than a U-Haul Dealer) without Agent's
prior written consent.
7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities
Account unless Agent shall have received a Control Agreement in respect of such
Securities Account. Borrowers agree not to transfer assets out of any Securities
Account; provided, however, that, so long as no Event of Default has occurred
and is continuing or would result therefrom, Borrowers may use such assets (and
the proceeds thereof) to the extent not prohibited by this Agreement.
7.20 FINANCIAL COVENANTS.
(a) Fail to maintain:
(i) MINIMUM CONSOLIDATED EBITDA. Consolidated
EBITDA, measured on a fiscal quarter-end basis, of not less
than the required amount set forth in the following table for
the applicable period set forth opposite thereto:
--------------------------------------------------------------------------------
Applicable Amount Applicable Period
--------------------------------------------------------------------------------
$ 80,000,000 For the 3 month period
ending September 30, 2003
--------------------------------------------------------------------------------
$ 95,000,000 For the 6 month period
ending December 31, 2003
--------------------------------------------------------------------------------
$105,000,000 For the 9 month period
ending March 31, 2004
--------------------------------------------------------------------------------
$190,000,000 For the 12 month period
ending June 30, 2004
--------------------------------------------------------------------------------
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(ii) MINIMUM CONSOLIDATED EBITDAR. Consolidated
EBITDAR, measured on a fiscal quarter-end basis, of not less
than the required amount set forth in the following table for
the applicable period set forth opposite thereto:
---------------------------------------------------------------------------------
Applicable Amount Applicable Period
---------------------------------------------------------------------------------
$100,000,000 For the 3 month period
ending September 30, 2003
---------------------------------------------------------------------------------
$145,000,000 For the 6 month period
ending December 31, 2003
---------------------------------------------------------------------------------
$180,000,000 For the 9 month period
ending March 31, 2004
---------------------------------------------------------------------------------
$295,000,000 For the 12 month period
ending June 30, 2004
---------------------------------------------------------------------------------
(iii) FIXED CHARGE COVERAGE RATIO. A Fixed Charge
Coverage Ratio of at least the required ratio set forth in the
following table as of the applicable date set forth opposite
thereto:
--------------------------------------------------------------------------------
Required Ratio Applicable Date
--------------------------------------------------------------------------------
1.10: 1.0 For the 3 month period
ending September 30, 2003
--------------------------------------------------------------------------------
1.10: 1.0 For the 6 month period
ending December 31, 2003
--------------------------------------------------------------------------------
1.10: 1.0 For the 9 month period
ending March 31, 2004
--------------------------------------------------------------------------------
1.10: 1.0 For the 12 month period
ending June 30, 2004
--------------------------------------------------------------------------------
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(b) Make:
(i) CAPITAL EXPENDITURES. Capital expenditures
in any fiscal year in excess of the amount set forth in the
following table for the applicable period:
Applicable Amount Applicable Period
------------------------------------------------------
$ 55,000,000 For the 3 month period
ending September 30, 2003
------------------------------------------------------
$ 75,000,000 For the 6 month period
ending December 31, 2003
------------------------------------------------------
$100,000,000 For the 9 month period
ending March 31, 2004
------------------------------------------------------
$160,000,000 For the 12 month period
ending June 30, 2004
------------------------------------------------------
7.21 NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or
indirectly:
(a) engage, or permit any Subsidiary of any Borrower to
engage, in any prohibited transaction which is reasonably likely to result in a
civil penalty or excise tax described in Sections 406 of ERISA or 4975 of the
IRC for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of
the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of any Borrower to
fail, to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of any Borrower
to terminate, any Benefit Plan where such event would result in any liability of
any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate under Title
IV of ERISA;
(e) fail, or permit any Subsidiary of any Borrower to
fail, to make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of any Borrower to
fail, to pay any required installment or any other payment required under
Section 412 of the IRC on or before the due date for such installment or other
payment;
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(g) amend, or permit any Subsidiary of any Borrower to
amend, a Benefit Plan resulting in an increase in current liability for the plan
year such that any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate is required to provide security to such Plan under Section 401(a)(29)
of the IRC; or
(h) withdraw, or permit any Subsidiary of any Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is reasonably likely
to result in any liability of any such entity under Title IV of ERISA;
that, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate in excess of $25,000.
7.22 SALES AND LEASEBACKS. Except for Permitted Dispositions, enter
into any arrangement, directly or indirectly, with any third party whereby any
Loan Party shall sell or transfer any property, real or personal, whether now
owned or hereafter acquired, and whereby such Loan Party shall then or
thereafter rent or lease as lessee such property or any part thereof or other
property that such Loan Party intends to use for substantially the same purpose
or purposes as the property sold or transferred.
7.23 INTERIM FINANCING ORDER; FINAL FINANCING ORDER; ADMINISTRATIVE
EXPENSE PRIORITY; LIEN PRIORITY; PAYMENTS.
(a) Seek, consent to or suffer to exist at any time any
modification, stay, vacation or amendment of the Interim Order or the Final
Order, as the case may be, except for modifications and amendments joined or
agreed to in writing by Agent, on behalf of the Required Lenders, in its
Permitted Discretion.
(b) Suffer to exist at any time a priority for any
administrative expense or unsecured claim against any Borrower (now existing or
hereafter arising of any kind or nature whatsoever, including, without
limitation, any administrative expenses of the kind specified in Sections 503(b)
and 507(b) of the Bankruptcy Code) equal or superior to the priority of the
Lender Group in respect of the Obligations, except for (i) Carve-Out Expenses up
to the Carve-Out Amount, Senior Claims and (iii) recoveries under Avoidance
Actions, which claims to the Avoidance Actions shall attach pari passu with
other administrative claimants.
(c) Suffer to exist at any time any Lien on any
Collateral having a priority equal or superior to the Lien of the Agent for the
benefit of the Lender Group and the Bank Product Providers in respect of the
Collateral except for (i) Carve-Out Expenses up to the Carve-Out Amount, (ii)
Senior Claims and (iii) recoveries under Avoidance Actions, which claims to the
Avoidance Actions shall attach pari passu with other administrative claimants.
(d) Prior to the date on which the Obligations have been
paid in full in cash and the Commitments have been terminated, pay any
administrative expense claims except (i) Carve-Out Expenses, (ii) any
Obligations due and payable hereunder, and (iii) other administrative expense
claims incurred in the ordinary course of the business of Borrowers in the
Chapter 11 Case.
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8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1. If Borrowers fail to pay when due and payable, or when
declared due and payable, all or any portion of the Obligations (whether of
principal, interest, fees and charges due the Lender Group, reimbursement of
Lender Group Expenses, or other amounts constituting Obligations); provided,
however that in the case of Overadvances that are caused by the charging of
interest, fees, or Lender Expenses to the Loan Account, such event shall not
constitute an Event of Default if, within 3 Business Days of its receipt of
telephonic notice of such Overadvance, Borrowers eliminate such Overadvance;
8.2. If any of the Loan Parties:
(a) fails to perform, keep, or observe any term,
provision, covenant, or agreement contained in Sections 2.7, 3.2, 4.2, 4.4, 4.6,
4.8, 6.8, 6.13, and 7.1 through 7.23 of this Agreement;
(b) fails or neglects to perform, keep, or observe any
term, provision, covenant, or agreement contained in Sections 4.5, 6.2, 6.3,
6.6, 6.7, 6.9, 6.10, 6.11, and 6.15 of this Agreement and such failure continues
for a period of 15 Business Days; or
(c) fails or neglects to perform, keep, or observe any
other term, provision, covenant, or agreement contained in this Agreement, or in
any of the other Loan Documents (giving effect to any grace periods, cure
periods, or required notices, if any, expressly provided for in such Loan
Documents); in each case, other than any such term, provision, covenant, or
agreement that is the subject of another provision of this Section 8 (in which
event such other provision of this Section 8 shall govern), and such failure
continues for a period of 15 Business Days;
; provided that, during any period of time that any such failure or
neglect referred to in this paragraph exists, even if such failure or neglect is
not yet an Event of Default, Lenders shall be relieved of their obligations to
extend credit hereunder;
8.3. If any material portion of any Loan Party's assets is
attached, seized, subjected to a writ or distress warrant, levied upon, or comes
into the possession of any third Person;
8.4. [INTENTIONALLY OMITTED.]
8.5. If any order (other than the Interim Order or the Final Order)
is entered by the Court in the Chapter 11 Case: (a) approving additional
financing under Section 364(c) or (d) of the Bankruptcy Code; (b) granting any
Lien upon or affecting any Collateral; (c) permitting the use of cash collateral
of the Lenders under Section 363(c) of the Bankruptcy Code without the Required
Lenders' consent; or (d) that is adverse to any member of the Lender Group or
its rights and remedies hereunder or its interest in the Collateral;
92
8.6. If any Loan Party is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of
its business affairs;
8.7. If, after the Second Relief Date, a notice of Lien, levy, or
assessment, individually or in the aggregate in an amount of $500,000 or
greater, is filed of record with respect to any Loan Party's assets by the
United States, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, or if any taxes or debts owing
at any time hereafter to any one or more of such entities becomes a Lien,
whether ▇▇▇▇▇▇ or otherwise, upon any Borrower's or any of its Subsidiaries'
assets and the same is not paid on the payment date thereof;
8.8. If, after the Second Relief Date, a judgment or other claim
becomes a Lien or encumbrance upon any material portion of any Loan Party's
properties or assets;
8.9. If there is a default in any material agreement to which any
Guarantor is a party including, without limitation, any Material Contract,
Affiliate Contract or any material contract with any of SAC Holding, SSI or PMSR
and such default (a) occurs at the final maturity of the obligations thereunder,
or (b) results in the acceleration on the maturity of the applicable Guarantor's
obligations thereunder;
8.10. Except as ordered by the Court, if any Loan Party makes any
payment on account of Indebtedness that has been contractually subordinated in
right of payment to the payment of the Obligations;
8.11. If any material misstatement or material misrepresentation
exists now or hereafter in any warranty, representation, statement, or Record
made to the Lender Group by any Borrower, its Subsidiaries, or any officer,
employee, agent, or director of any Borrower or any of its Subsidiaries;
8.12. If the obligation of any Guarantor under its Guaranty is
limited or terminated by operation of law or by such Guarantor thereunder;
8.13. If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby;
8.14. If any provision of any Loan Document shall at any time for
any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Loan Party, or a proceeding shall be commenced
by any Loan Party, or by any Governmental Authority having jurisdiction over any
Loan Party, seeking to establish the invalidity or unenforceability thereof, or
any Loan Party shall deny that any Loan Party has any liability or obligation
purported to be created under any Loan Document;
8.15. If any claim or claims under Section 506(c) of the Bankruptcy
Code against or with respect to any of the Collateral is allowed;
93
8.16. If any plan of reorganization or disclosure statement
attendant thereto is filed by any Borrower, Guarantor or any other related
Person to which the Required Lenders do not consent or otherwise agree to the
treatment of their claims;
8.17. If an order confirming a plan of reorganization is entered
that does not (a) require repayment in full of all of Borrowers' Obligations
under this Agreement on the earlier of the effective date of such plan of
reorganization or 30 days following entry of the order confirming such plan of
reorganization; and (b) provide for the continuation of the Liens of Agent and
priorities thereof until repayment in full of all Obligations;
8.18. If an order is entered without the written consent of the
Required Lenders (a) to revoke, vacate, reverse, stay, modify, supplement or
amend this Agreement and the transactions contemplated hereby, any Loan
Document, the Interim Order or the Final Order, or (ii) to permit any
administrative expense or any claim (now existing or hereafter arising, of any
kind or nature whatsoever) to have administrative priority as to any Borrower
equal or superior to the priority of the Lender Group in respect of the
Obligations, except for Carve-Out Expenses up to the Carve-Out Amount and Senior
Claims;
8.19. If there shall be a payment of, or grant of an application for
authority to pay, any pre-petition claim, other than those of trade creditors
and other than those required to be paid pursuant to the Interim Order or Final
Order or other orders of the Court entered in the Chapter 11 Case on or prior to
the Closing Date, without the Required Lenders' prior written consent;
8.20. If all or substantially all of Borrowers' assets are sold
without the consent of the Required Lenders either through a sale under Section
363 of the Bankruptcy Code, through a confirmed plan of reorganization in the
Chapter 11 Case, or otherwise;
8.21. If an order is entered dismissing the Chapter 11 Case or
converting the Chapter 11 Case to one under Chapter 7 of the Bankruptcy Code and
such order does not require repayment in full of all of Borrowers' Obligations
under this Agreement and the termination of the Commitments hereunder;
8.22. If, without the Required Lenders' consent, an interim or
permanent trustee is appointed in the Chapter 11 Case, or an examiner with
expanded powers to operate or manage the business of Borrowers is appointed in
the Chapter 11 Case;
8.23. If an order by the Court is entered in the Chapter 11 Case
granting relief from or modifying the automatic stay of Section 362 of the
Bankruptcy Code (i) to allow any creditor to execute upon or enforce a Lien on
any Collateral with a fair market value equal to or exceeding $500,000, or (ii)
with respect to any Lien on or the granting of any Lien on any Collateral to any
state or local environmental or regulatory agency or authority;
8.24. If suit or action is commenced against the Lenders and, as to
any suit or action brought by any Person other than Borrowers or an officer or
employee of Borrowers, is continued without dismissal for 30 days after service
thereof on the Lenders, that asserts, by or on behalf of Borrowers, or any
official committee in the Chapter 11 Case, any claim or legal or equitable
remedy which seeks subordination of the claim or Lien of the Lenders hereunder
or
94
under any other Loan Document or any other remedy or action set forth in Section
8.5 or Sections 8.15 through 8.23;
8.25. If any Loan Party shall file any application in support of, or
shall otherwise fail to contest in good faith, a suit or action of the type set
forth in Section 8.24 filed by any Person other than a Borrower or an officer or
employee of Borrowers;
8.26. If an Insolvency Proceeding is commenced by any Guarantor or
any of its Subsidiaries; or
8.27. If an Insolvency Proceeding is commenced against any
Guarantor, or any of its Subsidiaries, and any of the following events occur:
(a) the applicable Guarantor or the Subsidiary consents to the institution of
the Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Lenders shall be relieved of their obligation to extend credit hereunder, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, any Guarantor or any of its Subsidiaries, or (e) an
order for relief shall have been entered therein.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Notwithstanding Section 362 of the
Bankruptcy Code and without application or motion to the Court, upon the
occurrence, and during the continuation, of an Event of Default, the Required
Lenders (at their election but without notice of their election and without
demand) may authorize and instruct Agent to do any one or more of the following
on behalf of the Lender Group (and Agent, acting upon the instructions of the
Required Lenders, shall do the same on behalf of the Lender Group), all of which
are authorized by Borrowers:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for
the benefit of Borrowers under this Agreement, under any of the Loan Documents,
or under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors of Borrowers for amounts and upon terms which Agent considers
advisable, and in such cases, Agent will credit the Loan Account with only the
net amounts received by Agent in payment of such disputed Accounts after
deducting all Lender Group Expenses incurred or expended in connection
therewith;
95
(e) Cause Borrowers to hold all of their returned
Inventory in trust for the Lender Group, segregate all returned Inventory from
all other assets of Borrowers or in Borrowers' possession and conspicuously
label said returned Inventory as the property of the Lender Group;
(f) Without notice to or demand upon any Borrower or any
Guarantor, make such payments and do such acts as Agent considers necessary or
reasonable to protect its security interests in the Collateral or any other
collateral securing the Obligations. Each Borrower agrees to assemble the
Personal Property Collateral if Agent so requires, and to make the Personal
Property Collateral available to Agent at a place that Agent may designate which
is reasonably convenient to both parties. Each Borrower authorizes Agent to
enter the premises where the Personal Property Collateral is located, to take
and maintain possession of the Personal Property Collateral, or any part of it,
and to pay, purchase, contest, or compromise any Lien that in Agent's
determination appears to conflict with the Agent's Liens and to pay all expenses
incurred in connection therewith and to charge Borrowers' Loan Account therefor.
With respect to any of Borrowers' owned or leased premises, each Borrower hereby
grants Agent a license to enter into possession of such premises and to occupy
the same, without charge, in order to exercise any of the Lender Group's rights
or remedies provided herein, at law, in equity, or otherwise;
(g) Without notice to any Borrower (such notice being
expressly waived), and without constituting an acceptance of any collateral in
full or partial satisfaction of an obligation (within the meaning of the Code),
set off and apply to the Obligations any and all (i) balances and deposits of
any Borrower held by the Lender Group (including any amounts received in the
Cash Management Accounts), or (ii) Indebtedness at any time owing to or for the
credit or the account of any Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of any Borrower held by the Lender Group, and any amounts received in
the Cash Management Accounts, to secure the full and final repayment of all of
the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Personal Property Collateral. Each Borrower hereby grants to
Agent, for the benefit of the Lender Group and the Bank Product Providers, a
license or other right to use, without charge, such Borrower's labels, patents,
copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Personal Property Collateral, in completing production of, advertising for sale,
and selling any Personal Property Collateral and such Borrower's rights under
all licenses and all franchise agreements shall inure to the Lender Group's
benefit;
(j) Sell the Personal Property Collateral at either a
public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Borrowers' premises) as Agent determines is commercially reasonable. It is not
necessary that the Personal Property Collateral be present at any such sale;
96
(k) Agent shall give notice of the disposition of the
Personal Property Collateral as follows:
(i) Agent shall give Administrative Borrower
(for the benefit of the applicable Borrower) a notice in
writing of the time and place of public sale, or, if the sale
is a private sale or some other disposition other than a
public sale is to be made of the Personal Property Collateral,
the time on or after which the private sale or other
disposition is to be made; and
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Administrative Borrower as
provided in Section 12, at least 10 days before the earliest
time of disposition set forth in the notice; no notice needs
to be given prior to the disposition of any portion of the
Personal Property Collateral that is perishable or threatens
to decline speedily in value or that is of a type customarily
sold on a recognized market;
(l) Agent, on behalf of the Lender Group, may credit bid
and purchase at any public sale;
(m) Agent may seek the appointment of a receiver or
keeper to take possession of all or any portion of the Collateral or any other
collateral securing the Obligations or to operate same and, to the maximum
extent permitted by law, may seek the appointment of such a receiver without the
requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights and
remedies available to it at law or in equity pursuant to any other Loan
Documents; and
(o) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by
Borrowers. Any excess will be returned, without interest and subject to the
rights of third Persons, by Agent to Administrative Borrower (for the benefit of
the applicable Borrower);
provided, however, that notwithstanding anything to the contrary contained
herein, Agent and Lenders shall be permitted to exercise any remedy in the
nature of a liquidation of, or foreclosure on, any of the Collateral upon not
less than 5 days' written notice to each Borrower and counsel approved by the
Court for the Committee and the U.S. Trustee.
Borrowers agree for themselves and on behalf of each of their Subsidiaries that
it would not be commercially unreasonable for Agent to dispose of the Collateral
(as defined herein and in the Guarantor Security Agreement) or any portion
thereof by using Internet sites that provide for the auction of assets of the
types included in such Collateral (as defined herein and in the Guarantor
Security Agreement) or that have the reasonable capability of doing so, or that
match buyers and sellers.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender
Group under this Agreement, the other Loan Documents, and all other agreements
shall be cumulative. The Lender Group shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy
97
shall be deemed an election, and no waiver by the Lender Group of any Event of
Default shall be deemed a continuing waiver. No delay by the Lender Group shall
constitute a waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Borrower, may do any or all of the following,
provided that, to the extent practicable, Agent shall give Administrative
Borrower 10 days' prior notice before exercise: (a) make payment of the same or
any part thereof, (b) set up such reserves in Borrowers' Loan Account as Agent
deems necessary to protect the Lender Group from the exposure created by such
failure, or (c) in the case of the failure to comply with Section 6.8 hereof,
obtain and maintain insurance policies of the type described in Section 6.8 and
take any action with respect to such policies as Agent deems prudent. Any such
amounts paid by Agent shall constitute Lender Group Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement. Agent need not inquire as to, or contest the validity of,
any such expense, tax, or Lien and the receipt of the usual official notice for
the payment thereof shall be conclusive evidence that the same was validly due
and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Each Borrower waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of documents, instruments, Chattel Paper, and guarantees at any time
held by the Lender Group on which any such Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Each Borrower
hereby agrees that: (a) so long as the Lender Group complies with its
obligations, if any, under the Code, Agent shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by
Borrowers.
11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend,
and hold the Agent-Related Persons, the Lender Related Persons with respect to
each Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in
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connection with or as a result of or related to the execution, delivery,
enforcement, performance, or administration of this Agreement, any of the other
Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Borrowers' and their Subsidiaries' compliance with the terms of
the Loan Documents, and (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the
proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto (all the foregoing, collectively, the
"Indemnified Liabilities"). The foregoing to the contrary notwithstanding,
Borrowers shall have no obligation to any Indemnified Person under this Section
11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Administrative Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Agent, as the case may be, at its
address set forth below:
If to Administrative Borrower: AMERCO
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Assistant Treasurer
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: U-HAUL INTERNATIONAL, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
99
with copies to: SQUIRE, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
Two Renaissance Square
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
If to Agent: ▇▇▇▇▇ FARGO FOOTHILL, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Business Finance Division Manager
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: PAUL, HASTINGS, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
Agent and Borrowers may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this Section
12, other than notices by Agent in connection with enforcement rights against
the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKRUPTCY COURT FOR THE DISTRICT OF NEVADA; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. BORROWERS AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13(b).
(c) BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent
(provided that no written consent of Agent shall be required in connection with
any assignment and delegation by a Lender to an Eligible Transferee), assign and
delegate to one or more assignees (each an "Assignee") all, or any ratable part
of all, of the Obligations, the Commitments and the other rights and obligations
of such Lender hereunder and under the other Loan Documents, in a minimum amount
of $5,000,000 (except that such minimum amount shall not apply to an Affiliate
of a Lender or to a Related Fund); provided, however, that Borrowers and Agent
may continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee, (ii) such Lender and its Assignee have delivered
to Administrative Borrower and Agent an Assignment and Acceptance in form and
substance reasonably satisfactory to Agent, and (iii) the assignor Lender or
Assignee has paid to Agent for Agent's separate account a processing fee in the
amount of $5,000. Anything contained herein to the contrary notwithstanding, the
consent of Agent shall not be required (and payment of any fees shall not be
required) if (x) such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of such Lender or (y) the assignee is
an Affiliate (other than individual(s)) of a Lender or a Related Fund.
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(b) From and after the date that Agent notifies the
assignor Lender (with a copy to Administrative Borrower) that it has received an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, as applicable, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 11.3 hereof)
and be released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto), and such
assignment shall effect a novation between Borrowers and the Assignee; provided,
however, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender's obligations under Article 16 and Section 17.8 of this
Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (v) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (vi) such Assignee agrees that it will perform all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance and receipt and
acknowledgment by Agent of such fully executed Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of
such Lender (a "Participant") participating interests in its Obligations, the
Commitment, and the other rights and interests of
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that Lender (the "Originating Lender") hereunder and under the other Loan
Documents; provided, however, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a "Lender" hereunder or under the other Loan
Documents and the Originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (1)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (2) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (3) release
all or substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (4) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (5) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Borrowers hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant shall only be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collections, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.
(f) In connection with any such assignment or
participation or proposed assignment or participation, a Lender may disclose all
documents and information which it now or hereafter may have relating to
Borrowers or Borrowers' business.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or United States Treasury Regulation 31 C.F.R. Section 203.14, and
such Federal Reserve Bank may enforce such pledge or security interest in any
manner permitted under applicable law.
(h) Subject to the last sentence of this Section 14.1(h),
Agent shall maintain, or cause to be maintained, a register (the "Register") on
which it enters the name of a Lender as the registered owner of each Advance, as
the case may be, held by such Lender. A Registered
103
Loan (and the Registered Note, if any, evidencing the same) may be assigned or
sold in whole or in part only by registration of such assignment or sale on the
Register (and each Registered Note shall expressly so provide). Subject to the
last sentence of this Section 14.1(h), any assignment or sale of all or part of
such Registered Loan (and the Registered Note, if any, evidencing the same) may
be effected only by registration of such assignment or sale on the Register,
together with the surrender of the Registered Note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such Registered Note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new Registered Notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of an assignment or sale
of any Registered Loan (and the Registered Note, if any, evidencing the same),
Borrowers, Agent and the Lenders shall treat the Person in whose name such
Registered Loan (and the Registered Note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary. In
the case of an assignment or delegation covered by Section 14.1(a)(y), the
assigning Lender shall maintain a register comparable to the Register on behalf
of Agent.
(i) In the event that a Lender sells participations in a
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the Registered Note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each Registered Note shall
expressly so provide). Any participation of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(j) Notwithstanding any other provision hereof, the
Lenders hereby consent to any Lender's pledge (a "Pledge") of its interest in
the Obligations, the Commitment, and the other rights and interests of that
Lender (a "Loan Pledgor") to any Eligible Transferee that has extended a credit
facility to such Loan Pledgor (a "Loan Pledgee"), on the terms and conditions
set forth in this paragraph. Upon written notice by any Loan Pledgor to Agent
that the Pledge has been effected, Agent agrees to acknowledge receipt of such
notice and thereafter agrees: (a) to use its best efforts to give Loan Pledgee
written notice of any default by Loan Pledgor under this Agreement and any
amendment, modification, waiver or termination of Loan Pledgor's rights under
this Agreement; provided, however, Agent shall not have any liability to Loan
Pledgee if Agent fails to give such notice; (b) that Agent shall deliver, at the
expense of Loan Pledgor, to Loan Pledgee such information available to the
Lenders hereunder as Loan Pledgee shall reasonably request; and (c) that, upon
written notice (a "Redirection Notice") to Agent by Loan Pledgee that Loan
Pledgor is in default, beyond applicable cure periods, under Loan Pledgor's
obligations to Loan Pledgee pursuant to the applicable credit agreement between
Loan Pledgor and Loan Pledgee (which notice need not be joined in or confirmed
by all Lenders), and until such Redirection Notice is withdrawn or rescinded by
Loan Pledgee, any payments to which Loan Pledgor is entitled from time to time
pursuant to this Agreement, or any other Loan Document, shall be paid or
directed to Loan Pledgee. The relevant Loan Pledgor hereby unconditionally and
absolutely releases Agent and the other Lenders from any liability to the such
Loan Pledgor on account of Agent's or any Lender's compliance with any
Redirection Notice reasonably believed by Agent or the Lenders to have been
delivered in good faith. Loan Pledgee shall be permitted fully to exercise its
rights and remedies against the relevant Loan
104
Pledgor, and realize on any and all collateral granted by such Loan Pledgor to
Loan Pledgee (and accept an assignment in lieu of foreclosure as to such
collateral), in accordance with applicable law and the provisions of this
Agreement. In such event, Agent and the Lenders shall recognize Loan Pledgee,
and its successors and assigns that are Eligible Transferees, as the successor
to the applicable Loan Pledgor's rights, remedies and obligations under this
Agreement and the Loan Documents. The rights of Loan Pledgee under this
paragraph shall remain effective unless and until such Loan Pledgee shall have
notified Agent in writing that its interest in the Obligations, the Commitment,
and the other rights and interests of the relevant Loan Pledgor has terminated.
(k) It is contemplated that those Persons which are
Lenders hereunder on the Closing Date will assign and transfer all or a portion
of their Commitments and the Obligations related thereto effective as of the
date established by Agent, after consultation with such Lenders, as the date for
closing the general syndication ("General Syndication Closing Date").
Notwithstanding the foregoing provisions of this Section 14.1, assignments
effective on the General Syndication Closing Date (i) do not require the consent
of Administrative Borrower or payment of a processing fee, (ii) may not be in a
ratable amount of the Obligations and Commitments of such Lenders, and (iii)
shall be accomplished by the execution by all such Lenders as of such date and
all such transferees of a single agreement provided by Agent in substantially
the form of an Assignment and Acceptance. Such agreement shall provide that all
Commitments shall, as of the effective date of such agreement, be as set forth
on Annex I thereto, which Annex shall, as of the General Syndication Closing
Date, amend Schedule C-2 hereto.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties hereto
including, with respect to each Borrower, the estate of such Borrower, any
trustee or successor-in-interest of such Borrower in the Chapter 11 Case or any
subsequent case commenced under Chapter 7 of the Bankruptcy Code; provided,
however, that Borrowers may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release any Borrower from its Obligations. A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 14.1 hereof and, except as expressly required
pursuant to Section 14.1 hereof, no consent or approval by any Borrower is
required in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrowers therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Administrative Borrower (on behalf
of all Borrowers) and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders affected thereby and Administrative Borrower (on
behalf of all Borrowers) and acknowledged by Agent, do any of the following:
105
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on,
any loan or other extension of credit hereunder, or reduce any fees or other
amounts payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is
required to take any action hereunder,
(e) amend, modify or waive this Section or any provision
of the Agreement providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted by Section
16.12,
(g) change the definition of "Required Lenders" or "Pro
Rata Share",
(h) contractually subordinate any of the Agent's Liens or
modify, waive, release or subordinate the superpriority claim status of the
Obligations (except as permitted by this Agreement and the other Loan
Documents),
(i) release any Borrower or any material Guarantor from
any obligation for the payment of money,
(j) change the definitions of Availability, Bank Product
Reserves, Borrowing Base, Fair Market Valuation, Maximum Revolver Amount, or
Term Loan Amount or amend, modify or waive any of the provisions of Section
2.1(a), Section 2.1(b), Section 2.2, Section 2.3(e), Section 2.3(i) or Section
2.4(b); or
(k) amend, modify or waive any of the provisions of
Section 16.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document. The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers. Furthermore, notwithstanding the
foregoing, any amendment, modification, waiver, consent, termination, or release
of, or with respect to, any provision of any Bank Product Agreement may be
effected by the parties thereto without the consent of the Lender Group.
106
15.2 REPLACEMENT OF HOLDOUT LENDER.
If any action to be taken by the Lender Group or Agent
hereunder requires the unanimous consent, authorization, or agreement of all
Lenders, and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a "Replacement Lender"), and
the Holdout Lender shall have no right to refuse to be replaced hereunder. Such
notice to replace the Holdout Lender shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender's being repaid its
share of the outstanding Obligations (including an assumption of its Pro Rata
Share of the Risk Participation Liability) without any premium or penalty of any
kind whatsoever. If the Holdout Lender shall refuse or fail to execute and
deliver any such Assignment and Acceptance Agreement prior to the effective date
of such replacement, the Holdout Lender shall be deemed to have executed and
delivered such Assignment and Acceptance Agreement. The replacement of any
Holdout Lender shall be made in accordance with the terms of Section 14.1. Until
such time as the Replacement Lenders shall have acquired all of the Obligations,
the Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of the Risk Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrowers of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its representative under this Agreement and
the other Loan Documents (other than the Bank Product Agreements) and each
Lender hereby irrevocably authorizes Agent to execute and deliver each of the
other Loan Documents (other than the Bank Product Agreements) on its behalf and
to take such other action on its behalf under the provisions of this Agreement
and each other Loan Document (other than the Bank Product Agreements) and to
exercise such powers and perform such duties as are expressly delegated to Agent
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Agent agrees to act as such on the
express conditions contained in this
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Section 16. The provisions of this Section 16 are solely for the benefit of
Agent, and the Lenders, and Borrowers shall have no rights as a third party
beneficiary of any of the provisions contained herein. Any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent; it being
expressly understood and agreed that the use of the word "Agent" is for
convenience only, that Foothill is merely the representative of the Lenders, and
only has the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions that Agent expressly is
entitled to take or assert under or pursuant to this Agreement and the other
Loan Documents. Without limiting the generality of the foregoing, or of any
other provision of the Loan Documents that provides rights or powers to Agent,
Lenders agree that Agent shall have the right to exercise the following powers
as long as this Agreement remains in effect: (a) maintain, in accordance with
its customary business practices, ledgers and records reflecting the status of
the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections as
provided in the Loan Documents, (e) open and maintain such bank accounts and
cash management accounts as Agent deems necessary and appropriate in accordance
with the Loan Documents for the foregoing purposes with respect to the
Collateral and the Collections, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender Group
Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by any Borrower or any
Subsidiary or Affiliate of any Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Borrower or any other
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party to any Loan Document to perform its obligations hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the Books or properties of Borrowers or the books or records or
properties of any of Borrowers' Subsidiaries or Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the requisite Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders,
except with respect to Defaults and Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Administrative Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrowers
and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a
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Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrowers. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a Loan Document.
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrowers and any other Person party to a Loan
Document that may come into the possession of any of the Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys' fees and expenses, fees and expenses of financial accountants,
advisors, consultants and appraisers, costs of collection by outside collection
agencies and auctioneer fees and expenses and costs of security guards or
insurance premiums paid to maintain the Collateral or any other collateral
securing the obligations, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to the Loan Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall be liable for
the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon
demand for such Lender's Pro Rata Share of any costs or out-of-pocket expenses
(including attorneys fees and expenses) 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, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
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16.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though Foothill were not Agent hereunder, and, in each case, without notice to
or consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, Foothill or its
Affiliates may receive information regarding Borrowers or their Affiliates and
any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days'
notice to the Lenders (and at least 15 days notice to Administrative Borrower).
If Agent resigns under this Agreement, the Required Lenders shall appoint a
successor Agent for the Lenders. If no successor Agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with the Lenders, a successor Agent. If Agent has materially breached or failed
to perform any material provision of this Agreement or of applicable law, the
Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders. In any such event, upon the acceptance
of its appointment as successor Agent hereunder, such successor Agent shall
succeed to all the rights, powers, and duties of the retiring Agent and the term
"Agent" shall mean such successor Agent and the retiring Agent's appointment,
powers, and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 16 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 45 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as the Lenders appoint a successor Agent as
provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person party to
any Loan Documents as though such Lender were not a Lender hereunder without
notice to or consent of the other members of the Lender Group. The other members
of the Lender Group acknowledge that, pursuant to such activities, such Lender
and its respective Affiliates may receive information regarding Borrowers or
their Affiliates and any other Person (other than the Lender Group) party to any
Loan Documents that is subject to confidentiality obligations in favor of
Borrowers or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender not shall be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same
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rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the sub-agent of the Agent.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign person" within the
meaning of the IRC and such Lender claims exemption from, or a reduction of,
United States withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrowers, to deliver to Agent and
Administrative Borrower:
(i) if such Lender claims an exemption from
withholding tax pursuant to its portfolio interest exception,
(1) a statement of the Lender, signed under penalty of
perjury, that it is not a (A) a "bank" as described in Section
881(c)(3)(A) of the IRC, (B) a 10% shareholder of a Borrower
(within the meaning of Section 871(h)(3)(B) of the IRC), or
(C) a controlled foreign corporation related to a Borrower
within the meaning of 864(d)(4) of the IRC, and (2) a properly
completed and executed IRS Form W-8BEN, before the first
payment of any interest under this Agreement and at any other
time reasonably requested by Agent or Administrative Borrower;
(ii) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax
treaty, properly completed and executed IRS Form W-8BEN before
the first payment of any interest under this Agreement and at
any other time reasonably requested by Agent or Administrative
Borrower;
(iii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before the first payment of
any interest is due under this Agreement and at any other time
reasonably requested by Agent or Administrative Borrower; and
(iv) such other form or forms as may be required
under the IRC or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrowers to such Lender, such
Lender agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender. To the extent
of such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.
(c) If any Lender is entitled to a reduction in the
applicable withholding tax, Agent may withhold from any interest payment to such
Lender an amount equivalent to the
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applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) of this Section are not
delivered to Agent, then Agent may withhold from any interest payment to such
Lender not providing such forms or other documentation an amount equivalent to
the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
(e) All payments made by Borrowers hereunder or under any
note or other Loan Document will be made without setoff, counterclaim, or other
defense, except as required by applicable law other than for Taxes (as defined
below). All such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction (other than the United States) or by any political subdivision or
taxing authority thereof or therein (other than of the United States) with
respect to such payments (but excluding, any tax imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein (i) measured
by or based on the net income or net profits of a Lender, or (ii) to the extent
that such tax results from a change in the circumstances of the Lender,
including a change in the residence, place of organization, or principal place
of business of the Lender, or a change in the branch or lending office of the
Lender participating in the transactions set forth herein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
each Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any note, including any amount paid pursuant to this Section
16.11(e) after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein; provided, however, that Borrowers
shall not be required to increase any such amounts payable to Agent or any
Lender (i) that is not organized under the laws of the United States, if such
Person fails to comply with the other requirements of this Section 16.11, or
(ii) if the increase in such amount payable results from Agent's or such
Lender's own willful misconduct or gross negligence. Borrowers will furnish to
Agent as promptly as possible after the date the payment of any Taxes is due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by Borrowers.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at
its option and in its sole discretion, to release any Lien on any Collateral or
any other collateral securing the
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Obligations (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Obligations, (ii) constituting property
being sold or disposed of if a release is required or desirable in connection
therewith and if Administrative Borrower certifies to Agent that the sale or
disposition is permitted under Section 7.4 of this Agreement or the other Loan
Documents (and Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting property in which no Borrower and its
Subsidiaries owned any interest at the time the Agent's Lien was granted or at
any time thereafter, or (iv) constituting property leased to a Borrower and its
Subsidiaries under a lease that has expired or is terminated in a transaction
permitted under this Agreement. Except as provided above, Agent will not execute
and deliver a release of any Lien on any Collateral or any other collateral
securing the Obligations without the prior written authorization of (y) if the
release is of all or any substantial portion of the Collateral or any other
collateral securing the Obligations, all of the Lenders, or (z) otherwise, the
Required Lenders. Upon request by Agent or Administrative Borrower at any time,
the Lenders will confirm in writing Agent's authority to release any such Liens
on particular types or items of Collateral or any other collateral securing the
Obligations pursuant to this Section 16.12; provided, however, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrowers in respect of)
all interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral or any other
collateral securing the Obligations.
(b) Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral or any other collateral securing the
Obligations exists or is owned by Borrowers or Guarantors or is cared for,
protected, or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral or any other collateral securing
the Obligations, or any act, omission, or event related thereto, subject to the
terms and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent's own interest in the Collateral
or any other collateral securing the Obligations in its capacity as one of the
Lenders and that Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing, except as otherwise provided herein.
(c) Notwithstanding any provision in the Loan Documents
to the contrary, the Lenders hereby irrevocably authorize Agent, and Agent
hereby agrees that it shall, upon the written request of Administrative
Borrower, execute, have acknowledged as appropriate, and deliver to
Administrative Borrower such release documents as are reasonably necessary or
appropriate under the circumstances to effect the release of any Collateral to
the extent the sale of such Collateral is permitted under this Agreement. Agent
shall deliver any such release documents to Administrative Borrower (or, if
applicable, any closing attorney) to hold in escrow pending the closing of the
related transaction. In the event the closing of such transaction does
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not occur, Administrative Borrower shall promptly return to Agent the release
documents executed and delivered by Agent.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without
the express written consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the written request of Agent, set off against
the Obligations, any amounts owing by such Lender to Borrowers or any Deposit
Accounts of Borrowers now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
in writing by Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i)
by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations, except for any such proceeds or
payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender's Pro Rata Share
of all such distributions by Agent, such Lender promptly shall (1) turn the same
over to Agent, in kind, and with such endorsements as may be required to
negotiate the same to Agent, or in immediately available funds, as applicable,
for the account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (2) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession or control. Should any Lender
obtain possession or control of any such Collateral or any other collateral
securing the Obligations, such Lender shall notify Agent thereof, and, promptly
upon Agent's request therefor shall deliver possession or control of such
Collateral or any other collateral securing the Obligations to Agent or in
accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan
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Documents relating to the Collateral or other collateral securing the
Obligations, for the benefit of the Lender Group and the Bank Product Providers.
Each member of the Lender Group agrees that any action taken by Agent in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral or any other collateral securing the Obligations and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
at the request of Agent, and Agent shall so furnish each Lender with such
Reports,
(b) expressly agrees and acknowledges that Agent does not
(i) make any representation or warranty as to the accuracy of any Report, and
(ii) shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrowers and will rely significantly upon Loan Parties' Books, as
well as on representations of Borrowers' personnel,
(d) agrees to keep all Reports and other material,
non-public information regarding Borrowers and their Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 17.10, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request in
writing that Agent provide to such Lender a copy of any report or document
provided by Borrowers to Agent that has not been contemporaneously provided by
Borrowers to such Lender, and, upon receipt of such request, Agent shall provide
a copy of same to such Lender, (y) to the extent that Agent is entitled, under
any provision of the Loan Documents, to request additional reports or
information from Borrowers, any Lender may, from time to time, reasonably
request Agent to exercise such
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right as specified in such Lender's notice to Agent, whereupon Agent promptly
shall request of Administrative Borrower the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from
Administrative Borrower, Agent promptly shall provide a copy of same to such
Lender, and (z) any time that Agent renders to Administrative Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Agent (if any) or any Lender
to make any credit available hereunder shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to
their respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
16.19 [INTENTIONALLY OMITTED.]
16.20 ADDITIONAL AGENTS. None of the Lenders or other entities
identified on the facing page of or elsewhere in this Agreement as a "Lead
Arranger", "Syndication Agent" or "Co-Documentation Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement or any
other Loan Document other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders so identified shall have or be
deemed to have any fiduciary relationship with any other Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other entities so identified in deciding to enter into this Agreement or any
other Loan Document or in taking or not taking action hereunder or thereunder.
16.21 QUEBEC SECURITY. For greater certainty, and without limiting
the powers of Agent or any other Person acting as an agent for the Lender Group
hereunder or under any of the Loan Documents, each Borrower hereby acknowledges
that, for purposes of holding any Liens, including hypothecs, granted or to be
granted by any Borrower or any Guarantor on movable or immovable property
pursuant to the laws of the Province of Quebec to secure obligations of any
Borrower or any Guarantor under any bond issued by any Borrower or any
Guarantor, Agent shall be the holder of an irrevocable power of attorney (fonde
de pouvoir within the meaning of Article 2692 of the Civil Code of Quebec) for
and on behalf of (i) all present and future Lenders (including the Issuing
Lender), (ii) the Issuing Lender and the Underlying Issuer that may from time to
time, and respectively, issue L/C and L/C Undertaking for the account of
Borrowers, and
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(iii) any Bank Product Provider that may from time to time extend Bank Products
to Administrative Borrower or its Subsidiaries. Each Lender (including the
Issuing Lender), for itself and on behalf of any Underlying Issuer that issues
or may issue L/C Undertaking for the account of Borrowers and any Bank Product
Provider that extends or may extend Bank Products to the Administrative Borrower
or its Subsidiaries, hereby (i) irrevocably constitutes, to the extent necessary
Agent as the holder of an irrevocable power of attorney (fonde de pouvoir within
the meaning of Article 2692 of the Civil Code of Quebec) in order to hold Liens,
including hypothecs, granted or to be granted by any Borrower or any Guarantor
on movable and immovable property pursuant to the laws of the Province of Quebec
to secure obligations of any Borrower or any Guarantor under any bond issued by
any Borrower or any Guarantor; and (ii) appoints and agrees that Agent, acting
as administrative agent for the Lenders (including the Issuing Lender) may act
as the bondholder and mandatory with respect to any bond that may be issued and
pledged from time to time for the benefit of the Lenders (including the Issuing
Lender), any Underlying Issuer and any Bank Product Provider.
The said constitution of the fonde de pouvoir (within the meaning of
Article 2692 of the Civil Code of Quebec) as the holder of such irrevocable
power of attorney and of Agent as bondholder and mandatory with respect to any
bond that may be issued and pledged from time to time for the benefit of the
Lenders (including the Issuing Lender), the Underlying Issuer and the Bank
Product Provider shall be deemed to have been ratified and confirmed as follows:
(i) by any Assignee by the execution of an Assignment and Acceptance;
(ii) by any Issuing Lender, Underlying Issuer or Bank Product Provider by
the issuance or execution, as the case may be, of L/C, L/C Undertaking
or Bank Product; and
(iii) by any assignee of the Issuing Lender, the Underlying Issuer or of the
Bank Product Provider by the execution of an assignment agreement.
Notwithstanding the provisions of Section 32 of the An Act respecting
the special powers of legal persons (Quebec), Agent may purchase, acquire and be
the holder of any bond issued by any Borrower or any Guarantor (i.e. the fonde
de pouvoir may acquire and hold the first bond issued under any deed of hypothec
granted by any Borrower or any Guarantor). Each Borrower hereby acknowledges
that any such bond shall constitute a title of indebtedness, as such term is
used in Article 2692 of the Civil Code of Quebec.
Agent herein appointed as fonde de pouvoir shall have the same rights,
powers and immunities as the Agent as stipulated in this Article 16, which shall
apply mutates mutandis. Without limitation, the provisions of Section 16.9 shall
apply mutates mutandis to the resignation and appointment of a successor to
Agent acting as fonde de pouvoir.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrowers, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
118
17.2 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing in accordance with Section 15.1.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or any Guarantor or the transfer to
the Lender Group of any property should for any reason subsequently be declared
to be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a "Voidable Transfer"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantors automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
17.8 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
119
17.9 PARENT AS AGENT FOR BORROWERS.
Each Borrower hereby irrevocably appoints Parent as the
borrowing agent and attorney-in-fact for all Borrowers (the "Administrative
Borrower") which appointment shall remain in full force and effect unless and
until Agent shall have received prior written notice signed by each Borrower
that such appointment has been revoked and that another Borrower has been
appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and
authorizes the Administrative Borrower (i) to provide Agent with all notices
with respect to Advances and Letters of Credit obtained for the benefit of any
Borrower and all other notices and instructions under this Agreement and (ii) to
take such action as the Administrative Borrower deems appropriate on its behalf
to obtain Advances and Letters of Credit and to exercise such other powers as
are reasonably incidental thereto to carry out the purposes of this Agreement.
It is understood that the handling of the Loan Account and Collateral of
Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to Borrowers in order to utilize the collective borrowing
powers of Borrowers in the most efficient and economical manner and at their
request, and that Lender Group shall not incur liability to any Borrower as a
result hereof. Each Borrower expects to derive benefit, directly or indirectly,
from the handling of the Loan Account and the Collateral in a combined fashion
since the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group. To induce the Lender Group to do
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify each member of the Lender Group and hold each member of the
Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third
party whosoever, arising from or incurred by reason of (a) the handling of the
Loan Account and Collateral of Borrowers as herein provided, (b) the Lender
Group's relying on any instructions of the Administrative Borrower, or (c) any
other action taken by the Lender Group hereunder or under the other Loan
Documents, except that Borrowers will have no liability to the relevant
Agent-Related Person or Lender-Related Person under this Section 17.9 with
respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.
17.10 CONFIDENTIALITY. Agent and the Lenders each individually (and
not jointly or jointly and severally) agree that material, non-public
information regarding Borrowers and their Subsidiaries, their operations,
assets, and existing and contemplated business plans shall be treated by Agent
and the Lenders in a confidential manner, and shall not be disclosed by Agent
and the Lenders to Persons who are not parties to this Agreement, except: (a) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group, (b) to Subsidiaries and Affiliates of any member of
the Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 17.10, (c) as may be required by statute,
decision, or the Court or other judicial or administrative order, rule, or
regulation, (d) as may be agreed to in advance by Administrative Borrower or its
Subsidiaries or as requested or required by any Governmental Authority pursuant
to any subpoena or other legal process, (e) as to any such information that is
or becomes generally available to the public (other than as a result of
prohibited disclosure by Agent or the Lenders), (f) in connection with any
assignment, prospective assignment, sale, prospective sale, participation or
prospective participations, or
120
pledge or prospective pledge of any Lender's interest under this Agreement,
provided that any such assignee, prospective assignee, purchaser, prospective
purchaser, participant, prospective participant, pledgee, or prospective pledgee
shall have agreed in writing to in writing to receive such information hereunder
subject to the terms of this Section, and (g) in connection with any litigation
or other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents. The provisions of this
Section 17.10 shall survive for 2 years after the payment in full of the
Obligations. Anything contained herein or in any other Loan Document to the
contrary notwithstanding, the obligations of confidentiality contained herein
and therein, as they relate to the transactions contemplated hereby, shall not
apply to the federal tax structure or federal tax treatment of such
transactions, and each party hereto (and any employee, representative, or agent
of any party hereto) may disclose to any and all Persons, without limitation of
any kind, the federal tax structure and federal tax treatment of such
transactions (including all written materials related to such tax structure and
tax treatment). The preceding sentence is intended to cause the transactions
contemplated hereby to not be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the IRC
and shall be construed in a manner consistent with such purpose. In addition,
each party hereto acknowledges that it has no proprietary or exclusive rights to
the tax structure of the transactions contemplated hereby or any tax matter or
tax idea related thereto.
17.11 AGENT AS PARTY IN INTEREST. Each Borrower hereby stipulates
and agrees that, until the repayment in full of the Obligations and the
termination of this Agreement, Agent is and shall remain a party in interest in
the Chapter 11 Case and shall have the right to participate, object and be heard
in any motion or proceeding in connection therewith. Without limitation of the
foregoing, Agent shall have the right to make any motion or raise any objection
it deems to be in its interest (specifically including but not limited to
objections to use of proceeds of the Advances, to payment of professional fees
and expenses or the amount thereof, to sales or other transactions outside the
ordinary course of business or to assumption or rejection of any executory
contract or lease), until the repayment in full of the Obligations and the
termination of this Agreement.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
AMERCO, a Nevada corporation
By: _______________________________________
Title: ____________________________________
AMERCO REAL ESTATE COMPANY, a
Nevada corporation
By: _______________________________________
Title: ____________________________________
▇▇▇▇▇ FARGO FOOTHILL, INC.
a California corporation, as Agent and as Lender
By: _______________________________________
Title: ____________________________________
DIP LOAN AND SECURITY AGREEMENT
SCHEDULE A-2
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, ▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ABA #▇▇▇▇▇▇▇▇▇.
SCHEDULE C-2
COMMITMENTS
=================================================================================================
LENDER REVOLVER COMMITMENT TERM LOAN COMMITMENT TOTAL COMMITMENT
=================================================================================================
▇▇▇▇▇ Fargo Foothill, Inc. $ 250,000,000 $ 50,000,000 $ 300,000,000
=================================================================================================
=================================================================================================
=================================================================================================
=================================================================================================
=================================================================================================
All Lenders $ 250,000,000 $ 50,000,000 $ 300,000,000
=================================================================================================
SCHEDULE D-1
DESIGNATED ACCOUNT
Account number 42-4903 of Administrative Borrower maintained
with Administrative Borrower's Designated Account Bank, or such other deposit
account of Administrative Borrower (located within the United States) that has
been designed as such, in writing, by Administrative Borrower to Agent.
"Designated Account Bank" means Bank One Arizona whose office
is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and whose ABA
number is ▇▇▇▇▇▇▇▇▇
SCHEDULE 3.2(h)
ZONING LETTERS
1. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇., ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ($2,150,000) (818070)
(Owner: AREC)
2. ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ($1,720,000) (754071) (Owner: AREC)
3. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ($1,000,000) (765064) (Owner:
AREC)
4. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ($683,000) (724052) (Owner:
AREC)
5. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ($450,000) (701066) (Owner:
AREC)
6. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ($400,000) (754056) (Owner: UREC)
7. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ($60,000) (615087) (Owner:
AREC)
8. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇