Exhibit 10.1
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CREDIT AGREEMENT
among
SCOTSMAN HOLDINGS, INC.,
▇▇▇▇▇▇▇▇ SCOTSMAN, INC.,
VARIOUS FINANCIAL INSTITUTIONS,
BANKERS TRUST COMPANY,
as Issuing Bank,
and
BT COMMERCIAL CORPORATION,
as Agent
Dated as of May 22, 1997
$300,000,000
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TABLE OF CONTENTS
PAGE
ARTICLE 1. Definitions.................................................. 1
1.1 General Definitions........................................... 1
1.2 Accounting Terms and Determinations........................... 37
1.3 Other Defined Terms........................................... 37
ARTICLE 2. Revolving Loans............................................. 37
2.1 Commitments................................................... 37
2.2 Determination of Borrowing Base............................... 38
2.3 Borrowing Mechanics........................................... 39
2.4 Settlements Among the Payments Administrator and the
Lenders.................................................. 41
2.5 Mandatory and Voluntary Payments: Mandatory and Voluntary
Reduction of Commitments................................. 44
2.6 Payments and Computations..................................... 47
2.7 Maintenance of Account........................................ 49
2.8 Statement of Account.......................................... 49
2.9 Taxes......................................................... 49
2.10 Sharing of Payments........................................... 51
ARTICLE 3. Letters of Credit........................................... 52
3.1 Issuance of Letters of Credit................................. 52
3.2 Terms of Letters of Credit.................................... 53
3.3 Lenders' Participation........................................ 53
3.4 Notice of Issuance............................................ 53
3.5 Payment of Amount Drawn Under Letters of Credit............... 54
3.6 Payment by Lenders............................................ 54
3.7 Nature of Issuing Bank's Duties............................... 55
3.8 Obligations Absolute.......................................... 56
ARTICLE 4. Interest, Fees and Expenses................................. 57
4.1 Interest on Eurodollar Rate Loans............................. 57
4.2 Interest on Base Rate Loans................................... 57
4.3 Notice of Continuation and Notice of Conversion............... 57
4.4 Interest After Default........................................ 59
4.5 Reimbursement of Expenses..................................... 60
4.6 Unused Line Fee............................................... 60
4.7 Letter of Credit Fees......................................... 60
4.8 Other Fees and Expenses....................................... 61
4.9 Authorization to Charge Account............................... 61
4.10 Indemnification in Certain Events............................. 61
4.11 Calculations.................................................. 62
4.12 Change of Applicable Lending Office........................... 63
ARTICLE 5. Conditions Precedent........................................ 63
5.1 Conditions to Initial Loans and Letters of Credit............. 63
(a) Execution of Agreement; Notes............................ 63
(b) Officer's Certificate.................................... 63
(c) Opinions of Counsel...................................... 63
(d) Security Agreement....................................... 64
(e) Collateral Access Agreements............................. 65
(f) Collection Bank Agreements; Concentration Account
Agreement........................................... 65
(g) Borrowing Base Certificate............................... 65
(h) Equity Issuance.......................................... 65
(i) Issuance of Senior Unsecured Notes....................... 66
(j) Recapitalization; etc.................................... 67
(k) Approvals................................................ 70
(l) Material Adverse Change, etc............................. 70
(m) Litigation............................................... 70
(n) Corporate Proceedings.................................... 70
(o) Plans; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Shareholders' Agreements;
Management Agreements; Employment Agreements; Tax
Sharing Agreements; Material Contracts.............. 71
(p) Solvency Certificate..................................... 72
(q) Projections; etc......................................... 73
(r) Insurance Policies....................................... 73
(s) Consent Letter........................................... 73
(t) Payment of Fees.......................................... 73
(u) Collateral Examination and Appraisal..................... 73
(v) Environmental Reports.................................... 73
(w) Management............................................... 74
(x) Subsidiaries Guaranty.................................... 74
(y) Pledge Agreement......................................... 74
(z) Mortgages; Title Insurance; Surveys; etc................. 74
(aa) Deposit Account Agreement................................ 75
(bb) Intercreditor Agreement.................................. 75
(ii)
(cc) Bailee Agreement......................................... 75
(dd) Custodian Agreement...................................... 76
(ee) Creation of Unit Subsidiary; Transfer of Assets
Thereto; Master Lease; etc........................... 76
ARTICLE 6. Representations and Warranties.............................. 77
6.1 Corporate Status.............................................. 78
6.2 Corporate Power and Authority................................. 78
6.3 No Violation.................................................. 78
6.4 Litigation.................................................... 79
6.5 Use of Proceeds............................................... 79
6.6 Governmental Approvals........................................ 79
6.7 Investment Company Act........................................ 79
6.8 Public Utility Holding Company Act............................ 79
6.9 True and Complete Disclosure.................................. 80
6.10 Financial Condition; Financial Statements..................... 80
6.11 Locations of Offices, Records, Inventory and Rental
Equipment............................................ 81
6.12 Fictitious Business Names..................................... 81
6.13 Security Interests............................................ 81
6.14 Tax Returns and Payments...................................... 82
6.15 Compliance with ERISA......................................... 82
6.16 Subsidiaries.................................................. 83
6.17 Intellectual Property; etc.................................... 84
6.18 Compliance with Statutes, etc................................. 84
6.19 Properties.................................................... 85
6.20 Labor Relations; Collective Bargaining Agreements............. 85
6.21 Restrictions on Subsidiaries.................................. 86
6.22 Status of Accounts............................................ 86
6.23 Material Contracts............................................ 86
6.24 Existing Indebtedness and Operating Leases.................... 86
6.25 Representations and Warranties in Recapitalization
Agreement................................................ 86
6.26 Guarantee of Senior Secured Notes............................. 87
6.27 Custodians.................................................... 87
ARTICLE 7. Affirmative Covenants....................................... 87
7.1 Financial Information......................................... 87
7.2 Real Estate Appraisals........................................ 92
7.3 Corporate Franchises.......................................... 92
7.4 Compliance with Statutes, etc................................. 93
(iii)
7.5 ERISA......................................................... 94
7.6 Good Repair................................................... 95
7.7 Books and Records............................................. 95
7.8 Collateral Records............................................ 96
7.9 Security Interests............................................ 96
7.10 Insurance; Casualty Loss...................................... 96
7.11 Taxes......................................................... 98
7.12 End of Fiscal Years; Fiscal Quarters.......................... 98
7.13 Further Assurances............................................ 98
7.14 Maintenance of Separateness................................... 99
7.15 Collateral Access Agreements.................................. 99
7.16 New Subsidiaries..............................................100
7.17 Permitted Acquisitions........................................100
7.18 Unit Subsidiary; Provisions Relating to Units; etc............101
ARTICLE 8. Negative Covenants..........................................102
8.1 Consolidation, Merger, Sale or Purchase of Assets, etc........102
8.2 Liens.........................................................104
8.3 Indebtedness..................................................107
8.4 Capital Expenditures..........................................109
8.5 Investments...................................................110
8.6 Dividends, etc................................................111
8.7 Transactions with Affiliates..................................113
8.8 Changes in Business...........................................114
8.9 Interest Coverage Ratio.......................................114
8.10 Utilization...................................................115
8.11 Creation of Subsidiaries......................................115
8.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Governing Documents,
Preferred Stock and Certain Other Agreements; etc.........115
8.13 Issuance of Stock.............................................117
8.14 Limitation on Restrictions Affecting Subsidiaries.............117
8.15 No Additional Bank Accounts...................................118
8.16 No Excess Cash................................................118
8.17 Account Terms.................................................118
8.18 Permitted Preferred Stock.....................................118
8.19 Unit Subsidiary...............................................119
(iv)
ARTICLE 9. Events of Default and Remedies..............................119
9.1 Events of Default.............................................119
(a) Payments.................................................119
(b) Representations, etc.....................................119
(c) Covenants................................................119
(d) Default Under Other Agreements...........................119
(e) Bankruptcy, etc..........................................120
(f) ERISA....................................................121
(g) Collateral Documents.....................................121
(h) Judgments................................................122
(i) Change of Control........................................122
(j) Guaranty.................................................122
ARTICLE 10. The Agent..................................................123
10.1 Appointment..................................................123
10.2 Nature of Duties of Agent....................................123
10.3 Lack of Reliance on Agent....................................124
10.4 Certain Rights of the Agent..................................124
10.5 Reliance by Agent............................................124
10.6 Indemnification of Agent.....................................125
10.7 The Agent in its Individual Capacity.........................125
10.8 Holders of Notes.............................................125
10.9 Successor Agent..............................................125
10.10 Collateral Matters...........................................126
10.11 Actions with Respect to Defaults.............................127
10.12 Delivery of Information......................................128
ARTICLE 11. Miscellaneous..............................................128
11.1 Submission to Jurisdiction; Waivers..........................128
11.2 Waiver of Jury Trial.........................................129
11.3 Governing Law................................................129
11.4 Delays: Partial Exercise of Remedies.........................129
11.5 Notices......................................................129
11.6 Benefit of Agreement.........................................130
11.7 Confidentiality..............................................133
11.8 Indemnification..............................................134
11.9 Entire Agreement; Successors and Assigns.....................135
11.10 Amendment or Waiver..........................................135
(v)
11.11 Nonliability of Agent and Lenders............................136
11.12 Independent Nature of Lenders' Rights........................136
11.13 Counterparts.................................................136
11.14 Effectiveness................................................136
11.15 Headings Descriptive.........................................136
11.16 Maximum Rate.................................................136
11.17 Right of Setoff..............................................137
11.18 Other Credit Documents.......................................137
11.19 Certain Provisions Regarding Perfection of Security
Interests..............................................137
11.20 Post Closing Actions.........................................138
ARTICLE 12. Holdings Secured Guaranty..................................140
12.1 The Holdings Secured Guaranty................................140
12.2 Bankruptcy...................................................141
12.3 Nature of Liability..........................................141
12.4 Independent Obligation.......................................141
12.5 Authorization................................................142
12.6 Reliance.....................................................143
12.7 Subordination................................................143
12.8 Waiver.......................................................143
12.9 Limitation on Enforcement....................................144
SCHEDULE I (Preamble) Lenders
SCHEDULE II (Section 1.1) Extended Term Accounts
SCHEDULE III (Section 1.1) Existing Indebtedness and Operating Leases
SCHEDULE IV (Section 6.11) Chief Executive Offices, Records Locations
and Rental Equipment Locations
SCHEDULE V (Section 6.12) Fictitious Business Names
SCHEDULE VI (Section 6.14) Tax Matters
SCHEDULE VII (Section 6.15) ERISA Matters
SCHEDULE VIII (Section 6.16) Subsidiaries
SCHEDULE IX (Section 5.1(m)) Litigation
SCHEDULE X (Section 5.1(z)) Real Properties
SCHEDULE XI (Section 6.20) Collective Bargaining Agreements
SCHEDULE XII (Section 7.10) Insurance
SCHEDULE XIII (Section 8.2(d)) Existing Liens
SCHEDULE XIV (Section 8.5(f)) Existing Investments
SCHEDULE XV (Section 8.16) Bank Accounts
(vi)
EXHIBIT A Form of Revolving Note
EXHIBIT B-1 Form of Notice of Borrowing
EXHIBIT B-2 Form of Letter of Credit Request
EXHIBIT B-3 Form of Notice of Continuation
EXHIBIT B-4 Form of Notice of Conversion
EXHIBIT C-1 Form of Collection Bank Agreement
EXHIBIT C-2 Form of Concentration Account Agreement
EXHIBIT D Form of Section 2.9(b)(ii) Certificate
EXHIBIT E-1 Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel to Holdings and the Borrower
EXHIBIT E-2 Form of Opinion of White & Case
EXHIBIT F Form of Security Agreement
EXHIBIT G Form of Collateral Access Agreement
EXHIBIT H Form of Officer's Certificate
EXHIBIT I Form of Consent Letter
EXHIBIT J Form of Subsidiaries Guaranty
EXHIBIT K Form of Pledge Agreement
EXHIBIT L Form of Mortgage
EXHIBIT M Form of Deposit Account Agreement
EXHIBIT N Form of Intercreditor Agreement
EXHIBIT O Form of Bailee Agreement
EXHIBIT P Form of Custodian Agreement
EXHIBIT Q Form of Compliance Certificate
EXHIBIT R Form of Borrowing Base Certificate
EXHIBIT S-1 Form of Assignment and Assumption Agreement
EXHIBIT S-2 Form of Notice of Assignment
(vii)
THIS CREDIT AGREEMENT is entered into as of May 22, 1997, among
Scotsman Holdings, Inc., a Delaware corporation ("Holdings"), ▇▇▇▇▇▇▇▇ Scotsman,
Inc., a Maryland corporation (the "Borrower"), each of those financial
institutions listed from time to time on Schedule I hereto (each, a "Lender"
and, collectively, the "Lenders"), BANKERS TRUST COMPANY, as Issuing Bank, and
BT COMMERCIAL CORPORATION, acting as Agent in the manner and to the extent
described in Article 10 hereof. Capitalized terms used and not otherwise
defined herein have the respective meanings set forth in Section 1.1 hereof.
W I T N E S S E T H :
WHEREAS, the Borrower wishes to obtain a credit facility (i) to make
payments in connection with the Transaction, (ii) for the working capital needs
and general corporate purposes of the Borrower and its Subsidiaries (including
acquisitions consummated in accordance with the terms hereof), and (iii) for the
ongoing letter of credit requirements of the Borrower and its Subsidiaries; and
WHEREAS, upon the terms and subject to the conditions set forth
herein, the Lenders are willing to make available to the Borrower the credit
facility provided for herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 GENERAL DEFINITIONS. As used herein, the following terms shall
have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):
ACCOUNTS shall mean, with respect to any Person, all present and
future accounts, contract rights and other rights to payment for goods sold or
leased (whether or not delivered) or for services rendered which are not
evidenced by an instrument, whether or not they have been earned by performance,
and any letter of credit, guarantee, security interest or other security issued
or granted to secure payment by an account debtor
including, without limitation, all rentals, lease payments and other monies
earned and to be earned, due and to become due under any Lease.
ADJUSTED CERTIFICATE OF DEPOSIT RATE shall mean on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates", published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by BTCo on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing, by (y) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements as specified in Regulation D applicable
on such day to a three-month certificate of deposit in excess of $100,000 issued
by a member bank of the Federal Reserve System with deposits in excess of five
billion dollars (including, without limitation, any marginal, emergency,
supplemental, special or other reserves), plus (2) the then daily net annual
assessment rate as estimated by BTCo for determining the current annual
assessment payable by BTCo to the Federal Deposit Insurance Corporation for
insuring three month certificates of deposit.
ADJUSTED EURODOLLAR RATE shall mean, with respect to each Interest
Period for any Eurodollar Rate Loan, the rate obtained by dividing (i) the
Eurodollar Rate for such Interest Period by (ii) a percentage equal to 100%
minus the stated maximum rate (stated as a decimal) of all reserves, if any,
required by the Board of Governors of the Federal Reserve System to be
maintained by a member bank of the Federal Reserve System in New York City with
deposits in excess of five billion dollars against "Eurocurrency liabilities" as
specified in Regulation D (or against any other category of liabilities which
includes deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Lender to United
States residents).
AFFECTED LOANS shall have the meaning provided in Section 2.5(e).
AFFILIATE shall mean, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by, or is under common
control with, such Person or any Subsidiary of such Person or any Person who is
a director or officer of such Person or any Subsidiary of such Person. For
purposes of this definition, "control" shall mean the possession, directly or
indirectly, of the power to (i) vote ten percent or more of the securities
having ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of management and policies of that Person,
whether through the ownership of voting securities, by contract or otherwise and
either alone or in
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conjunction with others or any group. Neither any Lender nor any person
controlling any Lender or under common control with such Lender (including BTCo)
nor any of their respective Subsidiaries shall be treated as an Affiliate of the
Credit Parties or their respective Subsidiaries. Notwithstanding the foregoing,
for purposes of determining the Borrowing Base, no portfolio companies of any of
the Equity Investors or of their Affiliates (excluding Holdings and its
Subsidiaries) shall be deemed an Affiliate of the Borrower or any Subsidiary of
the Borrower.
AGENT shall mean BTCC in its capacity as Agent for the Lenders
hereunder, and shall include any successor thereof as Agent, appointed as such
pursuant to Section 10.9.
AGENT ADVANCE shall have the meaning provided in Section 2.3(c).
AGENT ADVANCE PERIOD shall have the meaning given to such term in
Section 2.3(c).
APPLICABLE LENDING OFFICE shall mean, with respect to each Lender,
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan
and such Lender's Domestic Lending Office in the case of a Base Rate Loan.
APPLICABLE MARGIN shall mean the applicable percentage set forth below
based upon (i) until the first Start Date, Level IV, (ii) at any time when any
Default or Event of Default has occurred and is continuing, Level IV and (iii)
at any time other than those periods referred to in clauses (i) and (ii) above,
the Level for such Quarterly Period:
Eurodollar Base Unused
Level Rate Loan Rate Loan Line Fee
----- --------- --------- --------
Level I 1.50% 0.25% 0.125%
Level II 1.75% 0.50% 0.250%
Level III 2.00% 0.75% 0.375%
Level IV 2.25% 1.00% 0.500%
The Leverage Ratio shall be determined based on the delivery of a
certificate of the Borrower by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower, together with the Financial
Statements delivered pursuant to Sections 7.1(a) and (b) for the fiscal quarter
ended immediately prior to the relevant Start Date, which certificate shall set
forth the calculation of the Leverage Ratio as of the last day of the fiscal
quarter ended immediately prior to the relevant Start Date. The Applicable
Margin so determined shall apply from the relevant Start Date to the End Date.
If no certificate and
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Financial Statements shall have been delivered to the Agent on or prior to the
relevant End Date, the Level shall be Level IV until such certificate and
Financial Statements are delivered.
ASSET SALE shall mean the sale, transfer or other disposition by
Holdings, the Borrower or any Subsidiary of Holdings or the Borrower to any
Person other than the Borrower or any Subsidiary Guarantor of any asset of
Holdings, the Borrower or such Subsidiary (other than sales, transfers or other
dispositions in the ordinary course of business of inventory (including Rental
Equipment) and/or obsolete or excess equipment); provided that all
sale-leaseback transactions shall be deemed to constitute Asset Sales.
AUDITORS shall mean a nationally-recognized firm of independent public
accountants selected by the Borrower and reasonably satisfactory to the Agent.
For purposes of this Credit Agreement, the Borrower's current firm of
independent public accountants, Ernst & Young LLP, shall be deemed to be
satisfactory to the Agent.
AVERAGE LEASE TERM shall mean, as of any date, an amount equal to (x)
the total number of months that all existing Leases have been in effect on such
date (including for this purpose the month in which the date recalculation
occurs) divided by (y) the number of all existing Leases as of such date.
AVERAGE RENTAL RATE shall mean, at any time, the average monthly
rental payment per unit of leased Rental Equipment.
B OF A shall mean Bank of America National Trust and Savings
Association.
BAILEE AGREEMENT shall have the meaning provided in Section 5.1(cc).
BANKRUPTCY CODE shall have the meaning provided in Section 9.1(e).
BASE RATE shall mean, at any time, the highest of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate then in effect and (ii) the
Prime Lending Rate. If for any reason BTCo shall have determined (which
determination shall be final absent manifest error) that it is unable to
ascertain the Adjusted Certificate of Deposit Rate, the Base Rate shall be
determined without regard to clause (i), until the circumstance giving rise to
such inability shall no longer exist.
BASE RATE LOAN shall mean each Revolving Loan bearing interest as
provided in Section 4.2.
BLOCKED COMMITMENTS shall mean (i) on or prior to the Senior Secured
Notes Repayment Date an amount equal to 103.167% of the aggregate principal
amount of Senior
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Secured Notes then outstanding (but giving effect to any reduction in the
aggregate principal amount of Senior Secured Notes which will be outstanding, to
the extent the proceeds of the respective Revolving Loan being incurred
hereunder are to be used, within two Business Days after the date of the
incurrence of such loan, to repay outstanding Senior Secured Notes) and (ii)
thereafter, $0.
BOARD OF DIRECTORS shall mean the Board of Directors of Holdings.
BORROWER shall have the meaning provided in the preamble to this
Credit Agreement.
BORROWING shall mean an incurrence of Revolving Loans of the same Type
from all the Lenders on the same day (or resulting from Conversion or
Continuance on the same date), having, in the case of Eurodollar Rate Loans, the
same Interest Period.
BORROWING BASE shall have the meaning given to such term in Section
2.2.
BORROWING BASE CERTIFICATE shall have the meaning given to such term
in Section 7.1(e).
BORROWING BASE DEFICIENCY shall mean, at any time, the amount, if any,
by which the Outstandings at such time exceeds the Borrowing Base at such time.
BORROWING DATE shall have the meaning provided in Section 2.4.
BT ACCOUNT shall have the meaning given to such term in Section 2.6.
BT DELAWARE shall have the meaning provided in Section 2.3(b).
BTCC shall mean BT Commercial Corporation, in its individual capacity.
BTCO shall mean Bankers Trust Company.
BUSINESS DAY shall mean any day other than a Saturday, Sunday or legal
holiday on which commercial banks in New York, New York are authorized to close.
When used in connection with Eurodollar Rate Loans, this definition will also
exclude any day on which commercial banks are not open for dealing in U.S.
Dollar deposits in the New York interbank Eurodollar market.
CALCULATION PERIOD shall have the meaning provided in Section 7.17.
CAPEX ROLLOVER AMOUNT shall have the meaning provided in Section
8.4(b).
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CAPITAL EXPENDITURES shall mean, as applied to any Person for any
period, the aggregate of all expenditures of (whether paid in cash or accrued as
liabilities (including Capitalized Lease Obligations and the acquisition of
additional Rental Units)) such Person and its Subsidiaries during that period
that, in conformity with GAAP, are or are required to be included in the
property, plant or equipment or, with respect to Rental Equipment, lease
equipment reflected in the consolidated balance sheet of such Person; PROVIDED,
that Capital Expenditures shall not include the purchase price paid in
connection with the acquisition of the equity interest of any Person (including
through the purchase of all of the capital stock or other ownership interests of
such Person or through merger or consolidation) to the extent allocable to
property, plant and equipment or, with respect to Rental Equipment, lease
equipment reflected in the consolidated balance sheet of such person; PROVIDED
FURTHER, that for purposes of Section 8.4, the amount of Capital Expenditures
for any period shall be equal to the sum of (i) the change in gross book value
of property, plant and equipment as set forth in the Borrower's respective
consolidated balance sheets and (ii) an amount determined in a manner consistent
with the calculation of "net capital expenditures for rental equipment" in Item
7 of the Borrower's annual report on Form 10-K for the year ended December 31,
1996.
CAPITAL LEASE, as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person or any of its
Subsidiaries as lessee which, in conformity with GAAP, is accounted for as a
capital lease on the consolidated balance sheet of that Person.
CAPITALIZED LEASE OBLIGATIONS shall mean the obligations under Capital
Leases of the Borrower and its Subsidiaries in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.
CASH EQUIVALENTS means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from Standard & Poor's Rating Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing not more than one year from the
date of creation thereof and, at the time of acquisition, having the highest
rating obtainable from either S&P's or Moody's; and (iv) certificates of deposit
or bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (a) is
at least "adequately capitalized" (as defined in the regulations of its primary
Federal banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than
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$500,000,000; (v) repurchase agreements with respect to, and which are fully
secured by a perfected security interest in, obligations of a type described in
clause (i) or clause (ii) above and are with any commercial bank described in
clause (iv) above; and (vi) shares of any money market mutual fund that (a) has
its assets invested continuously in the types of investments referred to in
clauses (i) through (v) above, (b) has net assets of not less than $500,000,000,
and (c) has the highest rating obtainable from either S&P or Moody's.
CASUALTY LOSS shall have the meaning given to such term in Section
7.10.
CERCLA shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 ET
SEQ.
CERTIFICATE OF TITLE shall mean certificates of title, certificates of
ownership or other registration certificates issued or required to be issued
under the certificate of title or other similar laws of any State for any of the
Rental Equipment.
CERTIFICATED UNITS shall mean each Unit (as defined in the Security
Agreement) which is evidenced by a Certificate of Title issued under the motor
vehicle or other applicable statute of any State.
CHANGE OF CONTROL shall mean, at any time and for any reason
whatsoever, (a) Holdings shall cease to own directly 100% on a fully diluted
basis of the economic and voting interest in the Borrower's capital stock or (b)
the Borrower shall cease to own directly 100% on a fully diluted basis of the
economic and voting interests in the Unit Subsidiary's equity or (c) the Equity
Investors and/or their respective Affiliates and Permitted Transferees shall
cease to own on a fully diluted basis in the aggregate at least 51% of the
economic and voting interest in Holdings' capital stock or (d) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors or (e) a "change of control" or similar event shall occur as provided
in any Permitted Preferred Stock (or the certificates of designation therefor)
or the Senior Unsecured Notes Documents.
CLOSING shall mean the occurrence of the Initial Credit Event and the
other transactions to occur on the Closing Date pursuant to the various
Documents (including without limitation the consummation of the Recapitalization
on such date).
CLOSING DATE shall mean the date on which the Initial Credit Event
occurs.
CODE shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Credit Agreement and any
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subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
COLLATERAL shall mean all of the Collateral as defined in the
Collateral Documents.
COLLATERAL ACCESS AGREEMENTS shall have the meaning given to such term
in Section 5.1(e).
COLLATERAL AGENT shall mean BTCC acting as collateral agent pursuant
to the Collateral Documents.
COLLATERAL DOCUMENTS shall mean all contracts, instruments and other
documents now or hereafter executed and delivered in connection with this Credit
Agreement, pursuant to which liens and security interests are granted to the
Collateral Agent in the Collateral for the benefit of the Lenders, including,
without limitation, each Mortgage, the Security Agreement, the Pledge Agreement,
the Concentration Account Agreement, the Collection Bank Agreements, the Bailee
Agreement, the Custodian Agreement and the Intercreditor Agreement.
COLLECTION ACCOUNT shall mean the account established at a Collection
Bank pursuant to the Collection Bank Agreement, into which funds shall be
transferred pursuant to Section 2.6.
COLLECTION BANK shall have the meaning given to such term in Section
2.6(b)(i).
COLLECTION BANK AGREEMENT shall have the meaning given to such term in
Section 2.6(b)(i).
COLLECTIVE BARGAINING AGREEMENTS shall have the meaning given to such
term in Section 5.1(o)(ii).
COMMITMENT of any Lender shall mean the amount set forth opposite such
Lender's name on Schedule I, as such Schedule may be amended from time to time,
under the heading "Commitment", as such amount may be reduced from time to time
pursuant to the terms of this Credit Agreement.
COMMON STOCK FINANCING shall have the meaning provided in Section
5.1(h).
CONCENTRATION ACCOUNT shall have the meaning given to such term in
Section 2.6(c).
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CONCENTRATION ACCOUNT AGREEMENT shall have the meaning given to such
term in Section 2.6(c).
CONSOLIDATED DEBT shall mean, at any time, all Indebtedness of
Holdings, the Borrower and their respective Subsidiaries (i) for borrowed money
(including, without limitation all Revolving Loans) and (ii) with respect to
Capitalized Lease Obligations, in each case determined on a consolidated basis.
CONSOLIDATED NET INCOME shall mean for any period the consolidated net
income of Holdings, the Borrower and their respective Subsidiaries for such
period as determined in accordance with GAAP.
CONTINGENT OBLIGATIONS shall mean as to any Person, without
duplication, any obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
PROVIDED, HOWEVER, that the term Contingent Obligations shall not include (x)
endorsements of instruments for deposit or collection in the ordinary course of
business or (y) guarantees made by a Person (other than the Unit Subsidiary) of
the obligations of the Borrower or a Wholly-Owned Subsidiary of such Person
which do not constitute Indebtedness of the Borrower or such Wholly-Owned
Subsidiary and are incurred in the ordinary course of business of the Borrower
or such Wholly-Owned Subsidiary. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
CONTINUATION AND CONTINUANCE each shall refer to a continuation of
Revolving Loans pursuant to Section 4.3, PROVIDED that neither term shall be
deemed to constitute the making of a Revolving Loan for purposes of this Credit
Agreement.
CONTINUING DIRECTORS shall mean the directors of Holdings on the
Closing Date (after giving effect to the Transaction) and each other director if
such director's
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election or nomination for the election to the Board of Directors is recommended
by a majority of the then Continuing Directors.
CONVERT, CONVERSION AND CONVERTED each shall refer to a conversion of
Revolving Loans of one Type into Revolving Loans of another Type pursuant to
Section 4.3, PROVIDED that each such term shall not constitute the making of a
Revolving Loan for purposes of this Credit Agreement.
CREDIT AGREEMENT shall mean this Credit Agreement, as the same may be
modified, amended, extended, restated, amended and restated or supplemented from
time to time.
CREDIT DOCUMENTS shall mean, collectively, this Credit Agreement, the
Revolving Notes, the Letters of Credit, each of the Collateral Documents and all
other documents and agreements now or hereafter executed and delivered in
connection herewith or therewith, as the same may be modified, amended,
extended, restated or supplemented from time to time.
CREDIT EVENT shall mean the making of a Revolving Loan or the issuance
of a Letter of Credit.
CREDIT PARTIES shall mean, collectively, Holdings, the Borrower and
the Subsidiary Guarantors.
CUSTODIAN AGREEMENT shall have the meaning provided in Section
5.1(dd).
CYPRESS GROUP shall mean the Cypress Group L.L.C., Cypress Merchant
Banking Partners L.P. and Cypress Offshore Partners L.P. or any new partnership
created to co-invest with Cypress Group L.L.C., Cypress Merchant Banking
Partners L.P. or Cypress Offshore Partners L.P. provided that Persons which had
a majority of the equity interests in or otherwise controlled Cypress Group
L.L.C., Cypress Merchant Banking Partners L.P. and/or Cypress Offshore Partners
L.P. on the Closing Date or any of their Permitted Transferees either (x) hold
all the equity interests of such new partnership or (y) control such new
partnership.
DEFAULT shall mean an event, condition or default which with the
giving of notice, the passage of time or both would be an Event of Default.
DEFAULTING LENDER shall have the meaning given to such term in Section
2.4(c).
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DEPOSIT ACCOUNT AGREEMENT shall have the meaning provided in Section
5.1(aa).
DISBURSEMENT ACCOUNT shall have the meaning given to such term in
Section 2.3(b).
DISCLOSED LITIGATION shall mean the litigation disclosed on Schedule
IX; PROVIDED that any such litigation shall cease to constitute Disclosed
Litigation (and at such time shall be subject to the general standard set forth
in Section 5.1(m)) at such time, if any, as there shall occur material adverse
developments (from the perspective of Holdings, the Borrower and their
respective Subsidiaries) after April 7, 1997.
DIVIDEND shall have the meaning given to such term in Section 8.6.
DOLLARS and the sign $ shall each mean freely transferable lawful
money of the United States.
DOMESTIC LENDING OFFICE shall mean, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I, as such annex may be amended from time to time.
EBITDA shall mean, in any fiscal period, Consolidated Net Income
(other than extraordinary items of Holdings, the Borrower and their respective
Subsidiaries for such period but including any Inventory or Rental Equipment
adjustments) for such period, (i) plus the amount of all Interest Expense,
federal, state and local income and franchise tax expense, depreciation and
amortization, including amortization of any goodwill or other intangibles for
such period, (ii) less gains and plus losses attributable to any fixed asset
sales (other than Rental Equipment), (iii) plus the amortization of debt
issuance costs, (iv) plus or minus (as the case may be) any other non-cash items
(other than any reserve established by Holdings against Accounts and/or
Inventory and/or Rental Equipment), in each case which have been subtracted or
added, as the case may be, in calculating Consolidated Net Income for such
period, all determined in accordance with GAAP, (v) plus or minus (as the case
may be) any increase or decrease in the amount of deferred taxes as shown on the
consolidated balance sheet as of the end of such period since the first day of
the same period (but without duplication of any taxes included in clause (i) of
this definition), (vi) plus or minus (as the case may be) any LIFO expense or
LIFO income, (vii) plus income attributable to discontinued operations directly
related to the Northeast Maryland manufacturing facility and (viii) plus all
customary non-recurring fees and expenses incurred or paid by Holdings, the
Borrower and their respective Subsidiaries in connection with the Transaction,
all of the foregoing (i) through (vi) and (viii) without duplication and only to
the extent added or deducted in calculating Consolidated Net Income.
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EFFECTIVE DATE shall have the meaning provided in Section 11.14.
ELIGIBLE ACCOUNTS RECEIVABLE shall mean as at any date, the aggregate
of all Accounts of the Borrower and its Wholly-Owned Subsidiaries then due and
payable in U.S. Dollars or Canadian Dollars and not deemed by the Agent in its
Permitted Discretion (after at least two Business Days' prior notice to Borrower
by Agent) to be ineligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, the face amount of such
Accounts shall be reduced, without duplication, by the amount of all returns,
discounts, deferred revenue, claims, contras, credits, charges, chargebacks,
rebates or other allowances and amounts unearned and (but without duplication of
any of the foregoing) by the aggregate amount of all reserves, limits and
deductions provided for in this definition and elsewhere in this Credit
Agreement. Unless otherwise approved in writing by the Agent, no Account shall
be deemed to be an Eligible Account Receivable if:
(a) it arises out of a sale or Lease for which no invoice has been
provided to the account debtor; or
(b) it arises out of a sale or Lease made to an Affiliate; or
(c) the Account is unpaid on the date which is 90 days after the date
on which the original invoice provides that such payment is due; or
(d) the Account (other than Accounts listed on Part A of Schedule II
describing the account party and the payment terms, but including any such
Account if such Account is unpaid 30 days after the invoice provides for
such payment) provides for payment more than 91 days after the date of the
original invoice; or
(e) it is from the same account debtor (or any Subsidiary thereof)
and 50% or more, in face amount, of all Accounts from such account debtor
(or any Subsidiary thereof) are ineligible pursuant to (c) above; or
(f) the Account, when aggregated with all other Accounts of such
account debtor, exceeds 15% in face value of all Accounts of the Borrower
and its Subsidiaries whose Accounts are included in the Borrowing Base then
outstanding, to the extent of such excess; PROVIDED, HOWEVER, that Accounts
supported or secured by insurance acceptable to the Agent or by an
irrevocable letter of credit in form and substance satisfactory to the
Agent, issued by a financial institution satisfactory to the Agent, and
duly pledged to the Collateral Agent (together with sufficient
documentation to permit direct draws by the Collateral Agent) shall be
excluded from this clause (f); or
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(g) (i) the account debtor is also a creditor of the Borrower (other
than account debtors which have provided to the Agent a "no-offset" letter
in form and substance satisfactory to the Agent), (ii) the account debtor
has disputed its liability on, or the account debtor has made any claim
with respect to, such Account or any other Account due from such account
debtor to the Borrower, which has not been resolved or (iii) the Account
otherwise is or may become subject to any right of setoff by the account
debtor; or
(h) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made
an assignment for the benefit of creditors, or if a decree or order for
relief has been entered by a court having jurisdiction over the account
debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or if any other petition or other
application for relief under the federal bankruptcy laws has been filed by
or against the account debtor, or if the account debtor has filed a
certificate of dissolution under applicable state law or shall be
liquidated, dissolved or wound up, or shall authorize or commence any
action or proceeding for dissolution, winding-up or liquidation, or if the
account debtor has failed, suspended business, declared itself to be
insolvent, is generally not paying its debts as they become due or has
consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or
affairs, unless (i) the payment of Accounts from such account debtor is
secured in a manner satisfactory to the Agent, (ii) with respect to a
voluntary or involuntary bankruptcy or similar proceeding, the court
presiding over such proceeding has authorized such account debtor to pay
such Account to Borrower or (iii) if the Account from such account debtor
arises subsequent to a decree or order for relief with respect to such
account debtor under the federal bankruptcy laws, as now or hereafter in
effect, the Agent shall have determined that the timely payment and
collection of such Account will not be impaired; or
(i) the sale or Lease is to an account debtor outside of the United
States (except for receivables of account debtors who are located in Canada
not in excess of 20% of the Accounts and Accounts listed on Part B of
Schedule II), unless the account is supported by insurance acceptable to
the Agent or the account debtor thereon has supplied the Borrower with an
irrevocable letter of credit in form and substance satisfactory to the
Agent, issued by a financial institution satisfactory to the Agent and
which has been duly pledged to the Collateral Agent (together with
sufficient documentation to permit direct draws by the Collateral Agent);
or
(j) with respect to Accounts arising from a sale, the sale to the
account debtor is on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return,
sale on approval or consignment basis or made pursuant to any other written
agreement providing for
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repurchase or return (other than pursuant to ordinary course of business
warranties); or
(k) the Agent determines in its Permitted Discretion that such
Account may not be paid by reason of the account debtor's financial
inability to pay; or
(l) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower duly
assigns its rights to payment of such Account to the Collateral Agent
pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727 ET SEQ.); or
(m) the act of the Rental Equipment being Leased and put in service
giving rise to such Account has not occurred or the services giving rise to
such Account otherwise have not been performed by the Borrower and accepted
by the account debtor or, with respect to an Account arising from a sale,
the Account does not represent a final sale; or
(n) the Account does not comply in all material respects with all
applicable legal requirements; or
(o) the Collateral Agent does not have a valid and perfected first
priority security interest in or Lien on such Account, subject only to
Permitted Liens, or the Account does not otherwise conform in all material
respects to the representations and warranties contained in the Credit
Agreement or the other Credit Documents, except that the value of any
Account shall be reduced by the amount of any obligations secured by
Permitted Liens which are prior to the Lien in favor of the Collateral
Agent.
ELIGIBLE RENTAL EQUIPMENT shall mean all Rental Equipment of the
Borrower and its Wholly-Owned Subsidiaries held for sale or lease or leased by
the Borrower as lessor in the ordinary course of business and not deemed by the
Agent acting in its Permitted Discretion (after at least two Business Days'
prior notice to Borrower by Agent) to be ineligible for inclusion in the
calculation of the Borrowing Base. In any event, Eligible Rental Equipment
shall account for reserves for Rental Equipment that is unrentable. In
determining the amount to be so included, such Rental Equipment shall be valued
on a net book value basis consistent with the Borrower's consolidated month-end
balance sheet, LESS any reserves otherwise required by the Agent pursuant to
Section 2.2(b), and LESS any Rental Equipment that the Agent determines to be
ineligible pursuant to Section 2.2(b). Unless otherwise approved in writing by
the Agent, no Rental Equipment shall be deemed Eligible Rental Equipment if:
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(a) the Rental Equipment is not owned solely by the Borrower or a
Wholly-Owned Subsidiary of the Borrower and with respect to which the
Borrower or a Wholly-Owned Subsidiary of the Borrower does not have good,
valid and marketable title, or is held by a third party for sale on a
▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on approval or
consignment basis; or
(b) the Rental Equipment (other than Rental Equipment being leased or
returned by a customer) is not stored on property that is either (i) owned
or leased by the Borrower or a Wholly-Owned Subsidiary of the Borrower or
(ii) owned or leased by a warehouseman that has contracted with the
Borrower or a Wholly-Owned Subsidiary of the Borrower to store Rental
Equipment on such warehouseman's property, provided that, except as
otherwise agreed to by the Collateral Agent for purposes of determining
Eligible Rental Equipment, after the 90th day following the Closing Date,
with respect to Rental Equipment stored on property leased by the Borrower
or a Wholly-Owned Subsidiary of the Borrower, the Borrower shall have
delivered in favor of the Collateral Agent a Collateral Access Agreement
executed by the lessor of such property, and, with respect to Rental
Equipment stored on property owned or leased by a warehouseman, the
Borrower shall have delivered to the Collateral Agent a Collateral Access
Agreement executed by such warehouseman; or
(c) the Rental Equipment is not subject to a perfected first priority
Lien in favor of the Collateral Agent except, (i) until the 90th day
following the Closing Date, with respect to Rental Equipment constituting
Certificated Units (excluding those evidenced by Certificates of Title
issued under the laws of the State of California), all of such Rental
Equipment, (ii) with respect to Rental Equipment constituting
Non-Certificated Units, all such Non-Certificated Units with respect to
which all applicable UCC filings have been made as required by the Credit
Documents, (iii) with respect to Eligible Rental Equipment stored at sites
described in clause (b) above, for Liens for normal and customary
warehouseman charges and (iv) to the extent subject only to Permitted
Liens, provided that the value of any Rental Equipment shall be reduced by
the amount of any obligations secured by Permitted Liens which are prior to
the Lien in favor of the Collateral Agent; or
(d) the Rental Equipment is not located in the United States or
Canada unless arrangements for the granting and perfection of a security
interest in such Rental Equipment have been made in a manner acceptable to
the Agent in its discretion; or
(e) the Rental Equipment does not conform in all material respects to
the representations and warranties contained in the Credit Agreement or the
other Credit Documents; or
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(f) whether or not located on property owned or leased by the
Borrower, it is not segregated or otherwise separately identifiable from
goods of others, if any, stored on the same premises as such Rental
Equipment; or
(g) the Rental Equipment is owned by the Borrower or any of its
Wholly-Owned Subsidiaries other than the Unit Subsidiary, in each case
unless the respective Rental Equipment constitutes (x) prior to the 90th
day following the Closing Date, Certificated Units and (y) from and after
the 90th day following the Closing Date, Qualified Certificated Units with
respect to which all actions required to be taken pursuant to Section 7.18
have in fact been taken; or
(h) the Rental Equipment is subject to Sales-Type Leases or leased by
the Borrower as lessor pursuant to a Lease which contains a bargain
purchase option; or
(i) the Rental Equipment has been or reasonably should be classified
by the Borrower or its Subsidiaries as type "D" or "E" consistent with the
manner in which the Borrower classifies Rental Equipment on the Closing
Date.
ELIGIBLE TRANSFEREE shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D) other than General Electric Capital Corporation and its
Affiliates.
EMPLOYMENT AGREEMENTS shall have the meaning provided in Section
5.1(o)(vi).
END DATE shall mean the date occurring on the third Business Day
following the date occurring 45 days (or in the case of the last fiscal quarter
of the Borrower, 90 days) after the end of the fiscal quarter in which the
previous Start Date occurred (or, if earlier, the date of the next Start Date).
ENVIRONMENTAL CLAIMS shall mean any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the Borrower or any of its Subsidiaries solely in the ordinary course of such
Person's business or as required in connection with a financing transaction and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or
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injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
ENVIRONMENTAL LAW shall mean any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, 33 U.S.C. 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 300F ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C Section 2701 ET
SEQ. and any applicable state and local or foreign counterparts or equivalents.
EQUITY INVESTORS shall mean Cypress Group and K-S Investor Group.
EQUITY ISSUANCE shall have the meaning provided in Section 5.1(h).
EQUITY ISSUANCE DOCUMENTS shall have the meaning provided in Section
5.1(h).
EQUITY ROLLOVER shall have the meaning provided in Section 5.1(h).
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Credit Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
ERISA AFFILIATE shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
EURODOLLAR LENDING OFFICE shall mean, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I, as such annex may be amended from time to time (or, if no
such office is specified, its Domestic Lending Office), or such other office or
Affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
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EURODOLLAR RATE shall mean, with respect to an Interest Period for
each Eurodollar Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the average (rounded upward to the nearest whole
multiple of one-sixteenth of one percent per annum, if such rate is not such a
multiple) of the offered quotation, if any, to first class banks in the New York
interbank Eurodollar market by BTCo for U.S. dollar deposits of amounts in
immediately available funds comparable to the principal amount of the Eurodollar
Rate Loan of BTCC for which the Eurodollar Rate is being determined with
maturities comparable to the Interest Period for which such Eurodollar Rate will
apply as of approximately 11:00 A.M. New York City time two Business Days prior
to the commencement of such Interest Period.
EURODOLLAR RATE LOAN shall mean a Revolving Loan bearing interest as
provided in Section 4.1.
EVENT OF DEFAULT shall have the meaning provided for in Section 9.1 of
this Credit Agreement.
EXCESS OTHER LIABILITY AMOUNT at any time shall mean the amount (if
any) by which the aggregate amount of Other Liabilities exceeds $55 million;
provided that to the extent the Borrower establishes to the satisfaction of the
Agent that an increase in Other Liabilities has occurred after the Closing Date
as a result of one or more Permitted Acquisitions, then the Agent may in its
sole discretion, but shall not be required to, increase the $55 million amount
provided above by an amount not to exceed the amount established to its
satisfaction as being an increase in such Other Liabilities as a result of such
Permitted Acquisition or Permitted Acquisitions.
EXISTING CREDIT AGREEMENT shall mean the Credit Agreement dated as of
December 16, 1993 among the Borrower and Congress Financial Corporation, as
amended, modified or supplemented to and including the Closing Date.
EXISTING INDEBTEDNESS shall mean Indebtedness of Holdings, the
Borrower and their respective Subsidiaries (other than the Senior Secured Notes
and the Holding Co. Notes) outstanding prior to, and to remain outstanding on
and after, the Closing Date, and set forth on Schedule III, without giving
effect to extensions or renewals thereto, except as expressly provided therein.
EXISTING INDEBTEDNESS AGREEMENTS shall have the meaning given to such
term in Section 5.1(o)(iii) hereof.
EXISTING LIENS shall have the meaning set forth in Section 8.2(d).
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EXPENSES shall mean all present and future expenses incurred by or on
behalf of the Agent in connection with this Credit Agreement, any other Credit
Document or otherwise in its capacity as the Agent under this Credit Agreement
(including without limitation, all costs related to the syndication efforts with
respect to this Credit Agreement), whether incurred heretofore or hereafter,
which expenses shall include, without being limited to, the cost of record
searches, the reasonable fees and expenses of attorneys and paralegals, all
costs and expenses incurred by the Agent in opening bank accounts, depositing
checks, electronically or otherwise receiving and transferring funds, and any
charges imposed on the Agent due to insufficient funds of deposited checks and
the standard fee of the Agent relating thereto, collateral examination fees and
expenses, reasonable fees and expenses of accountants, appraisers or other
consultants, experts or advisors employed or retained by the Agent, out of
pocket syndication fees and expenses, fees and taxes relative to the filing of
financing statements, costs of preparing and recording any other Collateral
Documents, all expenses, costs and fees set forth in Article 4 of this Credit
Agreement, all other fees and expenses required to be paid pursuant to the Fee
Letter and all fees and expenses incurred in connection with releasing
Collateral and the amendment or termination of any of the Credit Documents.
EXPIRATION DATE shall mean May 21, 2002.
FEDERAL FUNDS RATE shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Payments Administrator from three Federal Funds
brokers of recognized standing selected by it.
FEE LETTER shall mean that certain letter dated as of May 22, 1997
among BTCC and the Borrower providing for the payment of certain fees in
connection with this Credit Agreement.
FEES shall mean, collectively, the Unused Line Fee, the Letter of
Credit Fees, the Issuing Bank Fees and the other fees provided for in the Fee
Letter.
FINANCIAL STATEMENTS shall mean the consolidated balance sheets and
statements of operations and consolidated statements of cash flows and
statements of changes in shareholder's equity of each of Holdings and its
Subsidiaries and the Borrower and its Subsidiaries for the period specified
prepared in accordance with GAAP; provided that for purposes of Section 7.1(a),
the Financial Statements of Holdings shall include consolidating schedules.
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FINANCING TRANSACTIONS shall mean (i) the Equity Issuance, (ii) the
Equity Rollover, (iii) the Senior Unsecured Note Issuance, and (iv) the
occurrence of the Initial Credit Event on the Closing Date.
FOREIGN PENSION PLAN shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by the Borrower or any one or more of its
Subsidiaries primarily for the benefit of employees of the Borrower or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
FUNDING AFFILIATE shall have the meaning provided in Section 4.10.
GAAP shall mean generally accepted accounting principles in the United
States as in effect from time to time subject to Section 1.2.
GAIATECH shall mean GaiaTech Incorporated.
GOVERNING DOCUMENTS shall mean, as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person.
GOVERNMENTAL AUTHORITY shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
GROSS-UP PAYMENTS shall have the meaning provided in Section 2.9(b).
GUARANTORS shall mean Holdings and each Subsidiary Guarantor.
GUARANTY shall mean the Holdings Secured Guaranty and the Subsidiaries
Guaranty.
HAZARDOUS MATERIALS shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contained dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances", "hazardous waste", "hazardous
materials", "extremely hazardous waste", "restricted hazardous waste", "toxic
substances", "toxic pollutants", "contaminants", or "pollutants", or words of
similar import, under any applicable Environmental Law; and (c) any other
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chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
HIGHEST LAWFUL RATE shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Obligations owing under this Credit
Agreement and any other Credit Document, under the laws of the State of New York
(or the law of any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Credit Agreement and the other Credit
Documents), or under applicable federal laws which may presently or hereafter be
in effect and which allow a higher maximum nonusurious interest rate than under
New York (or such other jurisdiction's) law, in any case after taking into
account, to the extent permitted by applicable law, any and all relevant
payments or charges under this Credit Agreement and any other Credit Documents
executed in connection herewith, and any available exemptions, exceptions and
exclusions.
HOLDING CO. NOTES shall mean Holdings' Series B 11% Notes due 2004.
HOLDING CO. NOTES INDENTURE shall mean the Indenture, dated as of
March 2, 1994 between Holdings, as Issuer, and First Trust National Association,
as Trustee, pursuant to which the Holding Co. Notes were issued, as supplemented
from time to time.
HOLDING CO. NOTES INDENTURE SUPPLEMENT shall mean the Supplemental
Indenture to the Holding Co. Notes Indenture in form and substance satisfactory
to the Required Lenders and entered into by Holdings and the Trustee for the
Holding Co. Notes in connection with the Holding Co. Notes Tender Offer/Consent
Solicitation.
HOLDING CO. NOTES REPAYMENT DATE shall mean March 31, 1998.
HOLDING CO. NOTES TENDER OFFER/CONSENT SOLICITATION shall have the
meaning provided in Section 5.1(j)(iv).
HOLDING CO. NOTES TENDER OFFER REPURCHASES shall have the meaning
provided in Section 5.1(j)(iv).
HOLDINGS shall have the meaning provided in the preamble to this
Credit Agreement.
HOLDINGS COMMON STOCK shall mean the common stock of Holdings.
HOLDINGS SECURED GUARANTY shall mean the Guaranty of Holdings pursuant
to Article 12 of this Credit Agreement.
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INDEBTEDNESS of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all indebtedness of a second
Person secured by any Lien (in aggregate principal amount up to the amount of
such Liens) on any property owned by such first Person, whether or not such
indebtedness has been assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, I.E., take-or-pay
and similar obligations, (vii) all net obligations of such Person under Interest
Rate Agreements, (viii) all reimbursement or other monetary obligations with
respect to surety, performance and bid bonds, and (ix) all Contingent
Obligations of such Person; PROVIDED, that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the ordinary course of
business.
INDEMNITEE shall have the meaning provided in Section 11.8.
INITIAL CREDIT EVENT shall mean the making of the initial Revolving
Loans or the issuance of the initial Letter of Credit hereunder.
INTERCREDITOR AGREEMENT shall have the meaning provided in Section
5.1(bb).
INTEREST COVERAGE RATIO shall mean for any period the ratio for such
period of (x) EBITDA to (y) Interest Expense.
INTEREST EXPENSE shall mean the aggregate consolidated interest
accrued and/or paid by Holdings, the Borrower and their respective Subsidiaries
in respect of Indebtedness determined on a consolidated basis in accordance with
GAAP, including, without limitation, amortization of original issue discount on
any Indebtedness and of all fees payable in connection with the incurrence of
such Indebtedness (to the extent included in interest expense), the interest
portion of any deferred payment obligation, the interest component of any
Capitalized Lease Obligations, net cash costs under any Interest Rate
Agreements, all capitalized interest and interest paid by Holdings, the Borrower
or their respective Subsidiaries on debt guaranteed by Holdings, the Borrower or
their respective Subsidiaries; PROVIDED that Interest Expense shall not include
amortization of debt issuance costs.
INTEREST PERIOD shall mean for any Eurodollar Rate Loan the period
commencing on the date of the Borrowing, Conversion or Continuance thereof and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one, two,
three or six months or, to the extent approved by all the Lenders, nine or
twelve months, in each case as the Borrower may, in
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an appropriate Notice of Borrowing, Notice of Continuation or Notice of
Conversion, select; PROVIDED, HOWEVER, that the Borrower may not select any
Interest Period that ends after the Expiration Date. Whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day; PROVIDED, HOWEVER, that if such extension would cause
the last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next preceding
Business Day. Whenever any Interest Period begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period), such Interest Period
shall end on the last Business Day of the applicable calendar month.
INTEREST RATE AGREEMENT shall mean any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement under which the
Borrower or any of its Subsidiaries is a party or beneficiary.
INVENTORY shall mean all of the Borrower's now owned and existing and
hereafter arising or acquired inventory, wherever located and whether in the
possession of the Borrower or any other person, including, without limitation,
(a) all raw materials, work in process, parts, components, assemblies, supplies
and materials used or consumed in the Borrower's business and (b) all goods,
wares and merchandise, finished or unfinished, held for sale or lease or
furnished or to be furnished under contracts of service, EXCLUDING THE RENTAL
EQUIPMENT.
INVESTMENT shall have the meaning given to such term in Section 8.5.
ISSUING BANK shall mean BTCo.
ISSUING BANK FEES shall have the meaning given to such term in Section
4.7.
K-S INVESTOR GROUP shall mean Keystone, Inc., FW Strategic Partners,
L.P. and Scotsman Partners, L.P. and any new partnership or entity created to
co-invest with Keystone, Inc., FW Strategic Partners, L.P., and Scotsman
Partners, L.P., provided that Persons which had a majority of the equity
interests in or otherwise controlled Keystone, Inc., FW Strategic Partners, L.P.
and/or Scotsman Partners, L.P. on the Closing Date or any of their Permitted
Transferees either (x) hold all the equity interests of such new partnership or
entity or (y) control such new partnership or entity.
LEASES shall mean, collectively, the written agreements between
Borrower or any Subsidiary and an account debtor (other than Holdings, the
Borrower, or their respective Subsidiaries) in the ordinary course of business
of Borrower or such Subsidiary
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for the lease or rental of Rental Equipment by Borrower or such Subsidiary to
such account debtor in which the account debtor agrees to pay to Borrower, such
Subsidiary or their respective assigns Rentals.
LENDER shall have the meaning given to such term in the preamble to
this Credit Agreement.
LETTER OF CREDIT FEES shall have the meaning given to such term in
4.7.
LETTER OF CREDIT OBLIGATIONS shall mean, at any time, the sum of (i)
the aggregate undrawn amount of all Letters of Credit outstanding at such time,
PLUS (ii) the aggregate amount of all drawings under Letters of Credit which
have not been reimbursed by the Borrower (including through the incurrence of
Revolving Loans).
LETTER OF CREDIT REQUEST shall have the meaning given to such term in
Section 3.4.
LETTERS OF CREDIT shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of Inventory, Rental
Equipment, equipment or otherwise) issued for the account of the Borrower
pursuant to Article 3 of this Credit Agreement and all amendments, renewals,
extensions or replacements thereof.
LEVEL shall mean and include Level I, Level II, Level III or Level IV,
whichever is then in effect.
LEVEL I shall be in effect at any time Leverage Ratio is less than 4.0
to 1.
LEVEL II shall be in effect at any time Leverage Ratio is equal to or
greater than 4.0 to 1 but less than 4.75 to 1.
LEVEL III shall be in effect at any time Leverage Ratio is equal to or
greater than 4.75 to 1 but less than 5.5 to 1.
LEVEL IV shall be in effect at any time Leverage Ratio is equal to or
greater than 5.5 to 1.
LEVERAGE RATIO shall mean, at any time, the ratio of Consolidated Debt
at such time to EBITDA on the last day of the Test Period; PROVIDED that for the
purposes of calculating the Leverage Ratio only, EBITDA shall be increased (or
decreased) on a PRO FORMA basis by EBITDA attributable to the acquisition (or
divestiture) in accordance with the terms hereof of a Subsidiary or business
unit, so long as the amount of any such increase is the actual EBITDA earned by
such Subsidiary or business unit and such actual
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EBITDA is set forth in reasonable detail and with reasonable supporting
documentation in a written certificate delivered by the Borrower and signed by
the chief executive officer, chief financial officer, treasurer or controller of
the Borrower, all to the satisfaction of the Agent.
LIEN(S) shall mean any lien, charge, pledge, security interest, deed
of trust, mortgage, other encumbrance or other arrangement having the practical
effect of the foregoing or other preferential arrangement of any other kind and
shall include the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
MANAGEMENT AGREEMENTS shall have the meaning given to such term in
Section 5.1(o)(v).
MARGIN STOCK shall have the meaning provided in Regulation U.
MASTER LEASE AGREEMENT shall have the meaning provided in Section
5.1(ee).
MATERIAL ADVERSE EFFECT shall mean a material adverse effect on (i)
the business, operations, property, assets, liabilities or financial condition
of Holdings, the Borrower and their respective Subsidiaries taken as a whole,
(ii) the value of Collateral or the amount which the Agent and the Lenders would
be likely to receive (after giving consideration to delays in payment and costs
of enforcement) in the liquidation of such Collateral, or (iii) the rights and
remedies of BTCC, the Agent, the Issuing Bank or the Lenders under any Credit
Document.
MATERIAL CONTRACT shall mean any contract or other arrangement (other
than the Credit Documents), whether written or oral, to which Holdings, the
Borrower or any of their respective Subsidiaries is a party as to which the
breach, nonperformance, cancellation or failure to renew by any party thereto
may be reasonably expected to have a Material Adverse Effect.
MOBILE FIELD OFFICE shall mean Mobile Field Office Company, a New
Jersey corporation.
MOBILE FIELD OFFICE LIQUIDATION shall mean the dissolution of Mobile
Field Office and the distribution of all of the assets of Mobile Field Office to
the Borrower.
MOODY'S shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
MORTGAGE POLICIES shall have the meaning provided in Section 5.1(z).
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MORTGAGED PROPERTY shall have the meaning provided in Section 5.1(z).
MORTGAGES shall have the meaning provided in Section 5.1(z).
MULTIEMPLOYER PLAN shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
NET SALE PROCEEDS shall mean, with respect to any Asset Sale, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received by Holdings, the Borrower or any of their respective
Wholly-Owned Subsidiaries from such Asset Sale, net of (i) transaction costs
(including, without limitation, (w) any federal, state and local income or other
taxes paid or estimated to be payable as a result of such Asset Sale, (x) any
underwriting, brokerage or other customary selling commissions and (y)
reasonable legal fees, and (z) advisory, consulting, accountants', investment
banking and other fees and expenses, including title and recording expenses and
reasonable expenses incurred for preparing such assets for sale, associated
therewith) (ii) payments of unassumed liabilities relating to the assets sold at
the time of, or within 90 days after, the date of such sale, and (iii) the
amount of such gross cash proceeds required to be used to repay any Indebtedness
(other than Indebtedness to the Lenders pursuant to this Credit Agreement) which
is secured by the respective assets which were sold.
NON-CERTIFICATED UNITS shall mean all Units (as defined in the
Security Agreement) which are not Certificated Units.
NON-QUALIFIED UNITS shall at any time mean any Unit (as defined in the
Security Agreement) which is not a Qualified Certificated Unit at such time.
NOTICE OF BORROWING shall have the meaning given to such term in
Section 2.3(a)(i) and shall include any deemed Notice of Borrowing pursuant to
Section 3.5.
NOTICE OF CONTINUATION shall have the meaning given to such term in
Section 4.3(a).
NOTICE OF CONVERSION shall have the meaning given to such term in
Section 4.3(b).
OBLIGATIONS shall mean, without duplication, the unpaid principal of
and interest on (including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to Holdings, the Borrower or any of their respective
Subsidiaries, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Revolving Notes, any
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reimbursement obligation or indemnity of Holdings, the Borrower or any of their
respective Subsidiaries on account of Letters of Credit or any accommodation
extended with respect to applications for Letters of Credit, the Fees, the
Expenses and all other obligations and liabilities of Holdings, the Borrower or
any of their respective Subsidiaries to the Agent, the Issuing Bank or to the
Lenders, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Credit Agreement, the Revolving Notes and any other Credit
Document.
OPERATING LEASE shall mean as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person other than a
Capitalized Lease Obligation.
OPERATING LEASE PAYMENT shall mean any payment made by Holdings, the
Borrower or any of their respective Subsidiaries under an Operating Lease.
OTHER LIABILITIES at any time shall mean the accounts payable and
accrued expenses of Holdings and its Subsidiaries on a consolidated basis at
such time set forth in the Borrower's consolidated balance sheet, but excluding
accrued interest to the extent otherwise reflected therein.
OUTSTANDINGS shall mean, at any time, the sum of (i) the principal
amount of Revolving Loans outstanding at such time PLUS (ii) the Letter of
Credit Obligations at such time.
PAYMENT OFFICE shall mean ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
any other office within the continental United States designated by the Payments
Administrator to the Borrower from time to time as the office for payment of all
amounts required to be paid by the Borrower under this Credit Agreement.
PAYMENTS ADMINISTRATOR shall mean BTCC; PROVIDED, HOWEVER, that if
BTCC shall cease to be the Agent hereunder, the Lenders shall have the option to
appoint one of the remaining Lenders as the Payments Administrator by written
notice to the Borrower.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
PERMITTED ACQUISITION shall mean the acquisition by the Borrower of
100% of the capital stock or other equity interest of any Person, which Person
shall, as a result of such acquisition, become a Wholly-Owned Domestic
Subsidiary of the Borrower, PROVIDED that (A) the consideration paid by the
Borrower consists solely of cash (including proceeds of Revolving Loans), (B)
such Person shall own no capital stock of any other
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Person unless such Person owns 100% of the capital stock of such other Person,
(C) substantially all of the business, division or product line acquired
pursuant to the respective Permitted Acquisition, or the business of the Person
acquired pursuant to the respective Permitted Acquisition and its Subsidiaries
taken as a whole, is in the United States or Canada and (D) all applicable
requirements of Sections 7.16 and 7.17 applicable to Permitted Acquisitions are
satisfied.
PERMITTED DISCRETION shall mean the Agent's judgment exercised in good
faith based upon its consideration of any factor which the Agent believes in
good faith: (i) will or could reasonably be expected to adversely affect the
value of any of the Collateral, the enforceability or priority of the Agent's
liens thereon or the amount which the Agent, the Issuing Bank and the Lenders
would be likely to receive (after giving consideration to delays in payment and
costs of enforcement) in the liquidation of such Collateral; (ii) suggests that
any collateral report or financial information delivered to the Agent by any
Person on behalf of the Borrower is incomplete, inaccurate or misleading in any
material respect; (iii) materially increases the likelihood of a bankruptcy,
reorganization or other insolvency proceeding involving the Borrower or any of
its Subsidiaries or any of the Collateral; or (iv) creates or reasonably could
be expected to create a Default or an Event of Default. In exercising such
judgment, the Agent may consider such factors already included in or tested by
the definition of Eligible Accounts Receivable or Eligible Rental Equipment as
well as any of the following: (i) the financial and business climate of the
Borrower's or any Subsidiary's industry, (ii) changes in collection history and
dilution with respect to the Accounts, (iii) changes in any concentration of
risk with respect to Accounts and Rental Equipment, (iv) changes in operating
and turnover statistics with respect to Rental Equipment and/or Accounts,
including actual versus historical and projected, and (v) any other factors that
materially change the credit risk of lending to the Borrower on the security of
the Accounts and Rental Equipment. The burden of establishing lack of good
faith hereunder shall be on the Borrower.
PERMITTED ENCUMBRANCE shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the Mortgage Policy
delivered with respect thereto, all of which exceptions must be acceptable to
the Collateral Agent in its reasonable discretion.
PERMITTED LIENS shall have the meaning given to such term in Section
8.2.
PERMITTED MATERIALS shall have the meaning given to such term in
Section 6.18(c).
PERMITTED PREFERRED STOCK shall mean any preferred stock of Holdings,
so long as the terms of any such preferred stock of Holdings (i) do not provide
any collateral security, (ii) do not provide any guaranty or other support by
the Borrower or any Subsidiary of the Borrower or any
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Subsidiary of Holdings, (iii) do not contain any mandatory put, redemption,
repayment, sinking fund or other similar provision occurring before the sixth
anniversary of the Initial Borrowing Date, (iv) do not require the cash payment
of dividends or interest before the first anniversary of the Expiration Date,
(v) do not grant the holders thereof any voting rights except for (i) voting
rights required to be granted to such holders under applicable law and (ii)
limited customary voting rights on fundamental matters such as mergers,
consolidations, sales of substantial assets, or liquidations involving Holdings
and (vi) are otherwise reasonably satisfactory to the Agent.
PERMITTED SALE-LEASEBACK TRANSACTIONS shall mean the sale and
leaseback by the Borrower of Rental Equipment so long as (1) such transaction or
transactions are consummated prior to December 31, 1998, (2) the structure,
terms and conditions and documentation of any such transaction are in form and
substance satisfactory to the Agent and the Required Lenders, (3) with respect
to all units of Rental Equipment sold in any such transaction, the Borrower
receives cash in an amount equal to not less than the net book value of such
units, (4) no unit of Rental Equipment sold pursuant to any such transaction was
acquired by the Borrower or any of its Subsidiaries after December 31, 1993 and
(5) the Borrower receives no more than $50,000,000 in cash proceeds in
connection with all such transactions.
PERMITTED TRANSFEREE shall mean with respect to any Person who is a
natural person, (i) such individual's spouse or children (natural or adopted),
any trust for such individual's benefit or the benefit of such individual's
spouse or children (natural or adopted), or any corporation or partnership in
which the direct and beneficial owner of all of the equity interest is such
Person or such individual's spouse or children (natural or adopted) or any trust
for the benefit of such persons; and (ii) the heirs, executors, administrators
or personal representatives upon the death of such Person or upon the
incompetency or disability of such Person for purposes of the protection and
management of such individual's assets.
PERSON shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and, as applicable, the successors, heirs and assigns of
each.
PLAN shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute by) the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate which is organized under the laws of the United States and is subject
to Title I of ERISA, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
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PLEDGE AGREEMENT shall have the meaning provided in Section 5.1(y).
PREFERRED STOCK FINANCING shall have the meaning provided in Section
5.1(h).
PRIME LENDING RATE shall mean the rate which BTCo publicly announces
in New York City from time to time as its prime lending rate, as in effect from
time to time. The Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
BTCo may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate.
PROJECTIONS shall have the meaning provided in Section 5.1(q).
PROPORTIONATE SHARE shall mean, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the Total Commitments
or, if the Commitments are terminated, a fraction the numerator of which shall
be the amount of such Lender's Revolving Loans and the denominator of which
shall be the aggregate amount of then outstanding Revolving Loans of all the
Lenders.
QUALIFIED CERTIFICATED UNITS shall mean each Unit (as defined in the
Security Agreement), owned by the Borrower or any of its Subsidiaries, whether
owned on the Closing Date or acquired thereafter, which at the time in question
is a Certificated Unit with respect to which the requirements set forth in
Section 5.1(d)(C)(x) or (y) have been satisfied (with such satisfaction to be
determined on the date of any determination of whether the respective Unit is a
Qualified Certificated Unit).
QUARTERLY PERIOD shall mean that period commencing on the relevant
Start Date and ending on the relevant End Date.
RCRA shall mean the Resources Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 ET SEQ.
REAL PROPERTY of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
leaseholds.
RECAPITALIZATION shall mean (i) the Stock Repurchase, (ii) the
refinancing of the Existing Credit Agreement on the Closing Date, (iii) the
Senior Secured Notes Tender Offer Repurchases and the execution and delivery of
the Senior Secured Notes Indenture Supplement and the Senior Secured Notes
Collateral Documents Amendment in accordance with the requirements of Section
5.1(j)(iii) and (iv) the Holding Co. Notes Tender Offer
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Repurchases and the execution and delivery of the Holding Co. Notes Indenture
Supplement.
RECAPITALIZATION AGREEMENT shall mean the Recapitalization Agreement,
dated as of April 11, 1997, by and among Scotsman Holdings, Inc., Cypress
Merchant Banking Partners L.P., Cypress Offshore Partners L.P., Keystone, Inc.,
FW Strategic Partners L.P. and the securityholders of Scotsman Holdings, Inc.
named therein.
RECAPITALIZATION DOCUMENTS shall mean the documents entered into with
respect to the Recapitalization.
RECAPITALIZATION LETTERS OF CREDIT shall mean one or more Letters of
Credit issued in support of Recapitalization Notes as described in Section
1.2(e) of the Recapitalization Agreement; PROVIDED that (x) the aggregate stated
amount of all such Letters of Credit does not exceed $25,000,000 and (y) all
such Letters of Credit terminate on or prior to January 31, 1998.
RECAPITALIZATION NOTES shall mean the "Repurchase Notes" as such term
is defined in the Recapitalization Agreement.
REGISTER shall have the meaning provided in Section 11.6(A).
REGULATION D shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
REGULATION T shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or portion thereto.
REGULATION U shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
REGULATION X shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or portion thereto.
RENTAL EQUIPMENT shall mean the mobile structures generally
constructed of steel or using a steel frame and undercarriage with an exterior
of wood or aluminum and similar products (but excluding Inventory) which are
sold or leased by Borrower or its Subsidiaries to third persons in the ordinary
course of business and used to provide office, classroom, storage, commercial or
other space, whether in single units or physically attached to such other units
(and including in such form, modular structures), which
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structures are capable of being transported to and assembled on remote sites,
and which may be equipped with air conditioning and heating, electrical outlets,
floors, partitions, plumbing, carpeting, moldings, wall coverings, lighting and
other accessories.
RENTALS shall mean all fixed rents or rents which are fixed except for
adjustments based upon the Consumer Price Index payable under the Leases in
respect of the use of any Rental Equipment by account debtors as lessees of such
Rental Equipment to Borrower or its Subsidiaries as the lessor of such Rental
Equipment exclusive of any amounts paid or payable to Borrower or its
Subsidiaries for the sale of Rental Equipment or other Inventory or on account
of the service, site preparation, installation and removal of Rental Equipment,
security deposits, insurance waivers, warranty service, late charges, delivery
fees, moving fees maintenance charges, taxes, insurance and similar charges.
REPLACED LENDER shall have the meaning provided in Section 11.6(d).
REPLACEMENT LENDER shall have the meaning provided in Section 11.6(d).
REPORTABLE EVENT shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events to the extent to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
REQUIRED APPRAISAL shall have the meaning provided in Section 7.2.
REQUIRED LENDERS shall mean, at any time, those Lenders then owed or
holding in the aggregate more than 50% of the sum of the then existing aggregate
unpaid principal amount of the Revolving Loans and the then existing aggregate
undrawn amount of the Total Commitments.
REQUIREMENT OF LAW shall mean, as to any Person, the Governing
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
REVOLVING LOANS shall have the meaning given to such term in Section
2.1.
REVOLVING NOTE shall mean a promissory note of the Borrower payable to
the order of a Lender, in the form of Exhibit A, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Revolving Loans
made by such Lender or acquired by such Lender pursuant to Section 11.6.
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S&P shall mean Standard & Poor's Rating Services.
SALES-TYPE LEASES shall mean a Lease that should be treated as a
capital lease in accordance with Financial Accounting Standards Board Statement
No. 13, as amended, from time to time or if such statement is not then in
effect, such other statement of GAAP as may be applicable.
SECTION 2.9(B)(II) CERTIFICATE shall have the meaning provided in
Section 2.9(b)(ii).
SECURED CREDITORS shall have the meaning given such term in the
Security Agreement.
SECURITY AGREEMENT shall have the meaning provided in Section 5.1(d).
SENIOR SECURED NOTES shall mean the Borrower's existing 91/2% senior
secured notes due 2000.
SENIOR SECURED NOTES COLLATERAL DOCUMENTS shall mean the Intercreditor
Agreement and all documents securing, or creating Liens to secure, the Senior
Secured Notes from time to time outstanding.
SENIOR SECURED NOTES COLLATERAL DOCUMENTS AMENDMENT shall mean the
Amendments to the Senior Secured Notes Collateral Documents in form and
substance satisfactory to the Required Lenders and entered into by the parties
to the respective Senior Secured Notes Collateral Documents in connection with
the Senior Secured Notes Tender Offer/Consent Solicitation.
SENIOR SECURED NOTES INDENTURE SUPPLEMENT shall mean the Supplemental
Indenture to the Senior Secured Notes Indenture in form and substance
satisfactory to the Required Lenders and entered into by the Borrower and the
Trustee for the Senior Secured Notes in connection with the Senior Secured Notes
Tender Offer/Consent Solicitation.
SENIOR SECURED NOTES REPAYMENT DATE shall mean March 31, 1998.
SENIOR SECURED NOTES TENDER OFFER/CONSENT SOLICITATION shall have the
meaning provided in Section 5.1(j)(iii).
SENIOR SECURED NOTES TENDER OFFER REPURCHASES shall have the meaning
provided in Section 5.1(j)(iii).
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SENIOR UNSECURED NOTE DOCUMENTS shall have the meaning provided in
Section 5.1(i).
SENIOR UNSECURED NOTES shall mean the 9 7/8% Senior Unsecured Notes
due 2007 issued by the Borrower, and any substantially identical exchange notes
issued pursuant to the Senior Unsecured Note Indenture.
SENIOR UNSECURED NOTES INDENTURE shall mean the Indenture, dated as of
May 22, 1997, providing for the issuance of the Senior Unsecured Notes.
SENIOR UNSECURED NOTES ISSUANCE shall have the meaning provided in
Section 5.1(i).
SETTLEMENT DATE shall have the meaning given to such term in Section
2.4(b)(i).
SHAREHOLDERS' AGREEMENTS shall have the meaning given to such term in
Section 5.1(o)(iv).
START DATE shall mean the third Business Day following the earlier of
(x) each date occurring 45 days (or in the case of the last fiscal quarter of
the Borrower, 90 days), after the end of a fiscal quarter of the Borrower and
(y) the date on which Financial Statements for a fiscal quarter are delivered in
accordance with Section 7.1, together with the certificate required by the
second sentence of the definition of "Applicable Margin", with the first Start
Date to occur on the third Business Day following the earlier of (I) the date
which is 90 days after December 31, 1997 and (II) the date on which Financial
Statements for such fiscal quarter are delivered in accordance with Section 7.1
together with the certificate required by the second sentence of the definition
of "Applicable Margin".
STOCK REPURCHASE shall have the meaning provided in Section 5.1(j).
SUBSIDIARIES GUARANTY shall have the meaning provided in Section
5.1(x); PROVIDED, that from and after the date that any Wholly-Owned Subsidiary
of the Borrower executes and delivers a counterparty of the Subsidiaries
Guaranty pursuant to the requirements of Section 7.16, such Wholly-Owned
Subsidiary shall also be a Subsidiary Guarantor.
SUBSIDIARY shall mean as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other
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managers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Credit
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
SUBSIDIARY GUARANTOR shall have the meaning provided in Section
5.1(x).
SYNDICATION DATE shall mean the earlier of (x) the date which is 60
days after the Closing Date and (y) the date upon which the Agent determines in
its sole discretion (and notifies the Borrower) that the primary syndication
(and the resulting addition of institutions as Lenders pursuant to Section 11.6)
has been completed, notice of which shall be promptly given to the Borrower.
TAX SHARING AGREEMENTS shall have the meaning given to such term in
Section 5.1(o)(vii).
TAXES shall have the meaning given to such term in Section 2.9.
TEST PERIOD shall mean, at any time, the four consecutive fiscal
quarters of the Borrower then last ended (taken as a whole).
TOTAL COMMITMENTS at any time shall mean the aggregate of the
Commitments, as then in effect, of all the Lenders.
TOTAL AVAILABLE COMMITMENTS at any time shall mean the Total
Commitment at such time less the Blocked Commitments at such time.
TRANSACTION shall mean, collectively, (i) the Equity Issuance, (ii)
the Senior Unsecured Notes Issuance, (iii) the Recapitalization and (iv) the
entering into of the Credit Documents and the incurrence of Loans and issuance
of Letters of Credit hereunder on the Closing Date.
TRANSACTION DOCUMENTS shall mean the Equity Issuance Documents, the
Senior Unsecured Notes Documents and the Recapitalization Documents.
TYPE shall mean, with respect to any Revolving Loan, whether such
Revolving Loan is a Eurodollar Rate Loan or a Base Rate Loan.
UCC shall mean the Uniform Commercial Code.
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UNFUNDED CURRENT LIABILITY of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
UNIT CERTIFICATES shall mean certificates of title, certificates of
ownership or other registration certificates issued or required to be issued
under the laws of any State for any of the Rental Equipment owned or leased by
the Borrower or any Guarantor.
UNIT SUBSIDIARY means Willscot Equipment, LLC, a Delaware limited
liability company.
UNIT SUBSIDIARY MANAGEMENT AGREEMENT shall have the meaning provided
in Section 5.1(ee).
UNITED STATES and U.S. shall each mean the United States of America.
UNUSED LINE FEE shall have the meaning given to such term in Section
4.6.
UTILIZATION shall mean for any period the fraction expressed as a
percentage, (x) the numerator of which is the number of units of Rental
Equipment leased to customers at the end of such period and (y) the denominator
of which is the number of units of Rental Equipment owned or leased (as lessee)
by the Borrower at the end of such period.
WHOLLY-OWNED DOMESTIC SUBSIDIARY shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person that is incorporated under the laws of
the U.S., any State thereof, the United States Virgin Islands or Puerto Rico.
Unless otherwise qualified, all references to a "Wholly-Owned Domestic
Subsidiary" or to "Wholly-Owned Domestic Subsidiaries" in this Credit Agreement
shall refer to a Wholly-Owned Domestic Subsidiary or Wholly-Owned Domestic
Subsidiaries of the Borrower.
WHOLLY-OWNED SUBSIDIARY shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time. Unless
otherwise qualified, all references to a "Wholly-Owned Subsidiary" or to
"Wholly-Owned Subsidiaries" in this Credit Agreement shall refer to a
Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries of the Borrower.
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1.2 ACCOUNTING TERMS AND DETERMINATIONS. (a) Unless otherwise defined
or specified herein, all accounting terms used herein shall have the meanings
customarily given in accordance with GAAP, and all financial computations to be
made under this Credit Agreement shall, unless otherwise specifically provided
herein, be made in accordance with GAAP applied on a basis consistent in all
material respects with the Financial Statements referred to in Section 6.10(b).
All accounting determinations for purposes of determining compliance with
Sections 8.4, 8.9 and 8.10 and calculating the Borrowing Base as set forth in
Section 2.2 and the definitions of "Eligible Rental Equipment" and "Eligible
Accounts Receivable" shall be made in accordance with GAAP as in effect on the
Closing Date and applied on a basis consistent in all material respects with the
Financial Statements referred to in Section 6.10(b). The Financial Statements
required to be delivered hereunder from and after the Closing Date and all
financial records shall be maintained in accordance with GAAP as in effect as of
the date of the Financial Statements referred to in Section 6.10(b) or, if GAAP
shall change from the basis used in preparing the Financial Statements referred
to in Section 6.10(b), the certificates required to be delivered pursuant to
Section 7.1 demonstrating compliance with the covenants contained herein shall
include calculations setting forth the adjustments necessary to demonstrate how
the Borrower is in compliance with the financial covenants based upon GAAP as
utilized in the Section 6.10(b) Financial Statements.
1.3 OTHER DEFINED TERMS. Terms not otherwise defined herein which are
defined in the UCC as in effect on the date hereof in the State of New York
shall have the meanings given them in such UCC. The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Credit Agreement
shall refer to this Credit Agreement as a whole and not to any particular
provision of this Credit Agreement, and references to Article, Section,
Schedule, Exhibit and like references are references to this Credit Agreement
unless otherwise specified. An Event of Default shall "continue" or be
"continuing" until such Event of Default has been cured or waived in accordance
with Section 11.10 hereof.
ARTICLE 2.
REVOLVING LOANS
2.1 COMMITMENTS. Subject to the terms and conditions set forth in
this Credit Agreement, on and after the Closing Date and to and excluding the
Expiration Date, each of the Lenders severally agrees to make loans and advances
to the Borrower hereunder (the "Revolving Loans"). Subject to the provisions of
this Agreement, the Borrower may borrow, repay (without penalty, except for
breakage costs under Section 4.5(b)) and re-borrow, all in accordance with the
terms and conditions hereof. The Borrower hereby
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agrees to execute and deliver to each Lender a Revolving Note in the form of
Exhibit A to evidence the Revolving Loans made by such Lender.
2.2 DETERMINATION OF BORROWING BASE. (a) Subject to Section 2.2(b)
and Section 2.3(c), Revolving Loans shall not in aggregate principal amount at
any time outstanding exceed the lesser of:
(i) the Total Available Commitments then in effect MINUS the Letter
of Credit Obligations; and
(ii) the amount then equal to:
(A) Up to Eighty-five percent (85%) of the Eligible Accounts
Receivable, PLUS
(B) Up to Sixty percent (60%) of the Eligible Rental Equipment,
MINUS
(C) The Letter of Credit Obligations, MINUS
(D) The Excess Other Liability Amount at such time, MINUS
(E) The Borrower's exposure (as determined by the Agent) under
any Interest Rate Agreements entered into in accordance with Section
8.3(g), MINUS
(F) (x) On or prior to the Senior Secured Notes Repayment Date,
an amount equal to the Blocked Commitments and (y) thereafter, the
amount (if any) by which the Total Commitments were reduced pursuant
to Section 2.5(j).
The amount calculated in accordance with clause (ii) above is hereinafter
referred to as the "Borrowing Base".
(b) The Agent shall in the exercise of its Permitted Discretion (x) at
any time be entitled to (i) establish and increase or decrease reserves against
Eligible Accounts Receivable and Eligible Rental Equipment, and (ii) impose
additional restrictions (or eliminate the same) to the standards of "Eligible
Accounts Receivable" and "Eligible Rental Equipment" and (y) at any time after
the Closing Date be entitled to reduce the advance rates under Section
2.2(a)(ii)(A) or (B) or restore such advance rates to any level equal to or
below the advance rates stated in Section 2.2(a)(ii)(A) or (B). The Agent may,
but shall not be required to, rely on each Borrowing Base Certificate and any
other schedules or
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reports delivered to it in connection herewith in determining the then
eligibility of Accounts and Rental Equipment. Reliance thereon by the Agent
from time to time shall not be deemed to limit the right of the Agent to revise
advance rates or standards of eligibility as provided in this Section 2.2(b).
(c) The Borrowing Base will be computed monthly and a Borrowing Base
Certificate presenting its computation will be delivered promptly to the Agent
as set forth in Section 7.1(e). Notwithstanding anything to the contrary
contained herein, the Agent shall be satisfied that (based on the final
collateral examination report delivered in satisfaction of Section 5.1(u)
below), on the Closing Date and after giving effect to the consummation of the
Transaction, (x) the Borrower shall be able to incur additional Outstandings,
after giving effect to all Credit Events on the Closing Date, of $40,000,000 or
more in compliance with the Borrowing Base restrictions and (y) Outstandings on
the Closing Date (and after giving effect to all Credit Events on such date)
shall not exceed $135,000,000.
2.3 BORROWING MECHANICS. (a) Except as provided in Section 2.3(b) or
(c), Borrowings shall be made on notice from the Borrower to the Payments
Administrator, given not later than 1:00 P.M. New York City time on the date on
which the proposed Borrowing consisting of Base Rate Loans is requested to be
made and on the third Business Day prior to the date on which any proposed
Borrowing consisting of Eurodollar Rate Loans is requested to be made.
(i) Each Notice of Borrowing shall be given by either telephone,
telecopy, telex, facsimile or cable, and, if by telephone, confirmed in
writing, substantially in the form of Exhibit B-1 (the "Notice of
Borrowing"). Each Notice of Borrowing shall be irrevocable by and binding
on the Borrower.
(ii) The Borrower shall notify the Payments Administrator in writing
of the names of the officers authorized to request Revolving Loans on
behalf of Borrower, and shall provide the Payments Administrator with a
specimen signature of each such officer. The Payments Administrator shall
be entitled to rely conclusively on such officers' authority to request
Revolving Loans on behalf of the Borrower until the Payments Administrator
receives written notice to the contrary. The Payments Administrator shall
have no duty to verify the authenticity of the signature appearing on any
Notice of Borrowing or other writing delivered pursuant to this Section
2.3(a) and, with respect to an oral request for Revolving Loans, the
Payments Administrator shall have no duty to verify the identity of any
individual representing himself as one of the officers authorized to make
such request on behalf of the Borrower. Neither the Payments Administrator
nor any of the Lenders shall incur any liability to the Borrower as a
result of acting upon any telephonic notice referred to in this Section
2.3(a) which notice the Payments
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Administrator believes in good faith to have been given by a duly
authorized officer or other individual authorized to request Revolving
Loans on behalf of the Borrower or for otherwise acting reasonably and in
good faith under this Section 2.3(a) and, upon the funding of Revolving
Loans by the Lenders in accordance with this Credit Agreement, pursuant to
any such telephonic notice, the Borrower shall be deemed to have made a
Borrowing of Revolving Loans hereunder.
(iii) In a Notice of Borrowing, the Borrower may request one or
more Borrowings on a single day. Each such Borrowing shall, unless
otherwise specifically provided herein, consist entirely of Revolving Loans
of the same Type and shall be in an aggregate amount for all Lenders of not
less than $1,000,000 in the case of Eurodollar Rate Loans. Unless
otherwise requested in the applicable Notice of Borrowing, all Revolving
Loans shall be Base Rate Loans. The right of the Borrower to choose
Eurodollar Rate Loans is subject to the provisions of Section 2.3(a)(iv)
and 4.3(c).
(iv) Notwithstanding the foregoing, the Borrower may not incur
Eurodollar Rate Loans prior to the Syndication Date.
(b) The Borrower has informed the Agent that it has a checking account
(the "Disbursement Account") with B of A for general corporate purposes,
including the purpose of paying trade payables and other operating expenses.
The Lenders hereby authorize the Payments Administrator, and so long as the
conditions for Borrowing in Article 5 remain satisfied, the Payments
Administrator on behalf of the Lenders may but shall not be obligated to make
Revolving Loans to cover the amount of checks presented for payment and other
disbursements from the Disbursement Account. Such Borrowings shall be of Base
Rate Loans only and will at no time exceed the amount available for the
Borrowing of Revolving Loans under Section 2.2 (as determined in good faith by
the Agent). In the event that the Borrower provides the Agent with written
notice that it has opened a checking account with Bankers Trust (Delaware) ("BT
Delaware") and intends this account to replace the then existing Disbursement
Account, then from and after the date set forth in such notice therefore the
Disbursement Account shall be such account with BT Delaware and advice from BT
Delaware of amounts required to cover amounts set forth in the second sentence
of this clause (b) will be deemed a sufficient Notice of Borrowing.
(c) In the event the Borrower is unable to comply with (i) the
Borrowing Base limitations set forth in Section 2.2(a) or (ii) the conditions
precedent to the making of a Revolving Loan or the issuance of a Letter of
Credit set forth in Section 5.2, the Lenders authorize the Payments
Administrator, for the account of the Lenders, to make Revolving Loans (the
"Agent Advances") to the Borrower for a period commencing on the date the
Payments Administrator first receives a Notice of Borrowing requesting an Agent
Advance until the earlier of (i) the fifteenth Business Day after such date,
(ii) the date the Borrower
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is again able to comply with the Borrowing Base limitations and the conditions
precedent to the making of Revolving Loans and issuance of Letters of Credit, or
obtains an amendment or waiver with respect thereto, or (iii) the date the
Required Lenders instruct the Payments Administrator to cease making Agent
Advances (in each case, the "Agent Advance Period"). The Payments Administrator
shall not make any Agent Advance to the extent that at such time the amount of
such Agent Advance when added to the aggregate outstanding amount of other Agent
Advances would exceed the lesser of (A) the remainder of (i) the Total Available
Commitments at such time LESS (ii) the Outstandings at such time and (B) the
lesser of (x) $20,000,000 or (y) 10% of the Outstandings at such time. Agent
Advances will be subject to periodic settlement with the Lenders under Section
2.4.
2.4 SETTLEMENTS AMONG THE PAYMENTS ADMINISTRATOR AND THE LENDERS. (a)
Except as provided in Section 2.4(b), the Payments Administrator shall give to
each Lender prompt notice of each Notice of Borrowing by telecopy, telex,
facsimile or cable. No later than 12:00 Noon New York City time on the date of
each Borrowing representing the incurrence of Revolving Loans (each a "Borrowing
Date") (unless the Closing Date is the date of such incurrence, in which case no
later than 11:00 A.M. New York City time on the Closing Date), each Lender will
make available for the account of its Applicable Lending Office, to the Payments
Administrator at its Payment Office, in immediately available funds, for the
account of the Borrower, its Proportionate Share of such Borrowing. To the
extent the Lenders have made such amounts available to the Payments
Administrator as provided above, the Payments Administrator will make the
aggregate of such amounts available to the Borrower by 1:00 p.m., New York time,
on the respective Borrowing Date in accordance with this Section 2.4 and in like
funds received by the Payments Administrator. Unless the Payments Administrator
shall have been notified by any Lender prior to the date of such Borrowing that
such Lender does not intend to make available to the Payments Administrator its
portion of such Borrowing to be made on such date, the Payments Administrator
may assume that such Lender will make such amount available to the Payments
Administrator at its Payment Office on such date of Borrowing, or, if
applicable, the Settlement Date and the Payments Administrator, in reliance upon
such assumption, may but shall not be obligated to make available the amount of
the Borrowing to be provided by such Lender. Except as provided in Section
2.4(b) and subject to Section 2.4(e), promptly after its receipt of payments
from or on behalf of the Borrower (other than amounts payable to the Agent to
reimburse the Agent and the Issuing Bank for fees and expenses payable solely to
them), the Payments Administrator will cause such payments to be distributed
ratably to the Lenders. The Lenders will apply such payments in accordance with
Section 2.6(d).
(b) Unless the Required Lenders have instructed the Payments
Administrator to the contrary, the Payments Administrator on behalf of the
Lenders may but shall not be obligated to make Base Rate Loans under Section 2.3
without prior notice of the proposed Borrowing to the Lenders, as follows:
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(i) The amount of each Lender's Proportionate Share of Revolving
Loans shall be computed weekly (or more frequently in the Payment
Administrator's discretion) and shall be adjusted upward or downward on the
basis of the amount of outstanding Revolving Loans as of 5:00 P.M. New York
City time on the last Business Day of the period specified by the Payments
Administrator (such date, the "Settlement Date"). The Payments
Administrator shall deliver to each of the Lenders promptly after the
Settlement Date a summary statement of the amount of outstanding Revolving
Loans for such period. The Lenders shall transfer to the Payments
Administrator, or, subject to Section 2.4(e), the Payments Administrator
shall transfer to the Lenders, such amounts as are necessary so that (after
giving effect to all such transfers) the amount of Revolving Loans made by
each Lender shall be equal to such Lender's Proportionate Share of the
aggregate amount of Revolving Loans outstanding as of such Settlement Date.
If the summary statement is received by the Lenders prior to 12:00 Noon New
York City time on any Business Day, each Lender shall make the transfers
described above in immediately available funds no later than 3:00 P.M. New
York City time on the day such summary statement was received; and if such
summary statement is received by the Lenders after 12:00 Noon New York City
time on such day, each Lender shall make such transfers no later than 3:00
P.M. New York City time on the next succeeding Business Day. The
obligation of each of the Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by the
Payments Administrator. Each of the Payments Administrator and the Lenders
agree to ▇▇▇▇ their respective books and records on the Settlement Date to
show at all times the dollar amount of their respective Proportionate
Shares of the outstanding Revolving Loans.
(ii) To the extent that the settlement described above shall not yet
have occurred, upon any repayment of Revolving Loans by the Borrower, the
Payments Administrator may apply such amounts repaid directly to the
amounts made available by the Payments Administrator pursuant to this
Section 2.4(b).
(iii) Because the Payments Administrator on behalf of the Lenders
may be advancing and/or may be repaid Revolving Loans prior to the time
when the Lenders will actually advance and/or be repaid Revolving Loans,
interest with respect to Revolving Loans shall be allocated by the Payments
Administrator to each Lender and the Payments Administrator in accordance
with the amount of Revolving Loans actually advanced by and repaid to each
Lender and the Payments Administrator and shall accrue from and including
the date such Revolving Loans are so advanced to but excluding the date
such Revolving Loans are either repaid by the Borrower in accordance with
Section 2.5 or actually settled by the applicable Lender as described in
this Section 2.4(b).
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(c) If any amount described in this Section 2.4 is not made available
to the Payments Administrator by a Lender (such Lender being hereinafter
referred to as a "Defaulting Lender") and the Payments Administrator has made
such amount available to the Borrower, the Payments Administrator shall be
entitled to recover such amount on demand from such Defaulting Lender. If such
Defaulting Lender does not pay such amount forthwith upon the Payments
Administrator's demand therefor, the Payments Administrator shall promptly
notify the Borrower and the Borrower shall promptly (but in any event no later
than five Business Days after such demand) pay such amount (to the extent not
paid by the Defaulting Lender) to the Payments Administrator. The Payments
Administrator shall also be entitled to recover from such Defaulting Lender or
the Borrower, as the case may be, (x) interest on such amount in respect of each
day from the date such corresponding amount was made available by the Payments
Administrator to the Borrower to the date such amount is recovered by the
Payments Administrator, at a rate PER ANNUM equal to either (i) if paid by such
Defaulting Lender, the overnight Federal Funds Rate or (ii) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 4.1 or Section 4.2 hereof, plus (y) in each case, an amount equal to any
costs (including reasonable legal expenses) and losses incurred as a result of
the failure of such Defaulting Lender to provide such amount as provided in this
Credit Agreement; PROVIDED, HOWEVER, that the Payments Administrator shall not
be entitled to demand payment by the Borrower of any amount under clause (y)
above unless demand therefor has been made of the Defaulting Lender and not paid
within five Business Days of such demand. Nothing herein shall be deemed to
relieve any Lender from its duty to fulfill its obligations hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder, including, without limitation, the
right of the Borrower to seek reimbursement from any Defaulting Lender for any
amounts paid by the Borrower under clause (y) above on account of such
Defaulting Lender's default.
(d) The failure of any Lender to make the Revolving Loan to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Revolving Loan on the date of such
Borrowing, or relieve the Lender who failed to make such amount available to
subsequently repay such amount, or relieve any Lender (including the Lender that
failed to make such amount available) of its obligation hereunder to make its
ratable portion of any Borrowing available as part of any subsequent Revolving
Loans, but no Lender shall be responsible for the failure of any other Lender to
make the Revolving Loan to be made by such other Lender on the date of any
Borrowing.
(e) Notwithstanding anything contained herein to the contrary, so long
as any Lender is a Defaulting Lender or has rejected or repudiated its
Commitment, the Payments Administrator shall not be obligated to transfer to
such Lender any payments made by the Borrower to the Payments Administrator for
the benefit of such Lender; and, such Lender shall not be entitled to the
sharing of any payments pursuant to Section 2.10.
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Amounts which would have been payable to such Lender in the absence of the
immediately preceding sentence shall instead be paid to the Payments
Administrator. The Payments Administrator may hold and, in its discretion,
re-lend to the Borrower the amount of all such payments received by it for such
Lender. For purposes of voting or consenting to matters with respect to the
Credit Documents and determining Proportionate Share, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's Commitment shall be
deemed to be zero. This Section 2.4(e) shall remain effective with respect to
such Defaulting Lender until (x) the Obligations under this Credit Agreement
shall have been paid in full to the Payments Administrator and/or the Lenders
other than the Defaulting Lender or (y) the Required Lenders, the Payments
Administrator and the Borrower shall have waived such Defaulting Lender's
default in writing. No Commitment of any Lender shall be increased or otherwise
affected, and performance by the Borrower shall not be excused, by the operation
of this Section 2.4(e).
2.5 MANDATORY AND VOLUNTARY PAYMENTS: MANDATORY AND VOLUNTARY
REDUCTION OF COMMITMENTS. (a) Revolving Loans shall be due and payable without
any demand at any time that the aggregate balance of Revolving Loans and all
Letter of Credit Obligations outstanding at such time exceeds the lesser of the
Borrowing Base then in effect or the Total Available Commitments then in effect,
in the amount of such excess, PROVIDED, that (i) no such payment shall be
required pursuant to the foregoing clause as a result of a Borrowing Base
Deficiency during an Agent Advance Period and (ii) if the then aggregate
outstanding principal amount of Revolving Loans is less than such excess (after
giving effect to the foregoing clause (i)), Letters of Credit will be required
to be cash collateralized (to the satisfaction of the Collateral Agent) in the
amount of such difference.
(b) On the Expiration Date, the Total Commitments (and the Commitment
of each Lender) shall automatically reduce to zero and all outstanding Revolving
Loans shall be repaid in full.
(c) The Total Commitments (and the Commitment of each Lender) shall
terminate on May 31, 1997, unless the Closing Date shall have occurred on or
before such date.
(d) In addition to the transfers and distributions of funds required
pursuant to Section 2.6, the Borrower shall have the right to prepay the
Revolving Loans, without premium or penalty, in whole or in part at any time and
from time to time on the following terms and conditions: (i) the Borrower shall
give the Agent prior to 12:00 Noon (New York City time) (x) at least one
Business Day's prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Base Rate Loans and (y) at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay Eurodollar Rate Loans, the amount of such prepayment and
the Types of Loans to be prepaid and, in the case of Eurodollar Rate Loans, the
specific Bor-
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rowing or Borrowings pursuant to which made, which notice the Agent shall
promptly transmit to each of the Lenders; and (ii) prepayments of Eurodollar
Rate Loans made on a day other than the last day of an Interest Period
applicable thereto shall be accompanied by any amounts owing pursuant to Section
4.5(b).
(e) With respect to each repayment of Revolving Loans pursuant to this
Section 2.5, the Borrower may designate the Types of Loans which are to be
repaid and the specific Borrowing(s) pursuant to which made; PROVIDED, that (i)
if Eurodollar Rate Loans are designated for repayment as a result of Section
2.5(a) and such Eurodollar Rate Loans are repaid on a day that is other than the
last day of an Interest Period applicable thereto, such repayment shall be
accompanied by any amounts owing pursuant to Section 4.5(b); (ii) if any partial
prepayment of Eurodollar Rate Loans made pursuant to any Borrowing shall reduce
the outstanding Eurodollar Rate Loans made pursuant to such Borrowing to an
amount less than $1,000,000, then such Borrowing may not be continued as a
Borrowing of Eurodollar Rate Loans and any election of an Interest Period with
respect thereto given by the Borrower shall have no force or effect; and (iii)
each repayment of any Revolving Loans made pursuant to a Borrowing shall, except
as provided in Section 2.4(e), be applied PRO RATA among the Lenders which made
such Revolving Loans. If the Borrower is required to repay any Eurodollar Rate
Loans as a result of the application of Section 2.5(g) or (h) and such
prepayment will result in the relevant Borrower being required to pay breakage
costs under Section 4.5(b) (any such Eurodollar Rate Loans, "Affected Loans"),
the Borrower may elect, by written notice to the Agent, to have the provisions
of the following sentence be applicable. At the time any Affected Loans are
otherwise required to be prepaid the Borrower may elect to deposit 100% (or such
lesser percentage elected by the Borrower as not being immediately repaid) of
the principal amounts that otherwise would have been paid in respect of the
Affected Loans with the Agent to be held as security for the obligations of the
Borrower hereunder for a period not to exceed 60 days pursuant to a cash
collateral agreement to be entered into in form and substance satisfactory to
the Agent, with such cash collateral to be released from such cash collateral
account (and applied to repay the principal amount of such Eurodollar Rate
Loans) upon each occurrence thereafter of the last day of an Interest Period
applicable to Eurodollar Rate Loans (or such earlier date or dates as shall be
requested by the Borrower), with the amount to be so released and applied on the
last day of each Interest Period to be the amount of such Eurodollar Rate Loans
to which such Interest Period applies (or, if less, the amount remaining in such
cash collateral account); PROVIDED that on the 90th day after the deposit
thereof, any amount remaining from the respective deposit pursuant to the cash
collateral account shall be applied to repay outstanding Revolving Loans. In
the absence of a designation by the Borrower as described in the first sentence
of this clause (e), each repayment of Revolving Loans pursuant to Section 2.5
shall be applied first to the payment of Base Rate Loans and second to the
payment of Eurodollar Rate Loans in the order of the soonest to mature. If
there is more than one Eurodollar Rate Loan maturing on any one date, then, in
the absence of contrary instructions from the Borrower, (i) if such Eurodollar
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Rate Loans bear interest at different rates, payment shall be applied to the
Eurodollar Rate Loans bearing the higher rate of interest and (ii) if such
Eurodollar Rate Loans bear interest at the same interest rate, payment shall be
applied to whichever Eurodollar Rate Loan the Agent shall select in its sole
discretion.
(f) The Borrower may reduce or terminate the unutilized Total
Commitments at any time and from time to time in whole or in part upon at least
three Business Days' prior written notice to the Agent; PROVIDED, HOWEVER, that
each such reduction must be in an amount not less than $250,000 (and in
increments of $100,000 thereafter); and PROVIDED FURTHER, that (i) if the
Borrower seeks to reduce the Total Commitments to an amount less than
$10,000,000, then the Total Commitments shall be reduced to zero and the Credit
Agreement shall be terminated and (ii) once reduced, the amount of any such
reductions in the Total Commitments may not be reinstated.
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 2.5, on the date of the receipt thereof by
Holdings, the Borrower or any of their respective Subsidiaries, an amount equal
to 100% of the cash proceeds (net of all investment banking fees, legal fees,
consulting fees, underwriting discounts and commissions and other reasonable
costs associated therewith) of the incurrence of Indebtedness by Holdings, the
Borrower or any of their respective direct or indirect Subsidiaries (other than
(i) Indebtedness incurred pursuant to the Financing Transactions or (ii)
Indebtedness permitted to be incurred by Section 8.3 as in effect on the
Effective Date) shall be applied as a mandatory reduction to the Total
Commitments.
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 2.5, on each date after the Closing Date
upon which Holdings, the Borrower or any of their respective Subsidiaries
receives Net Sale Proceeds from any Asset Sale (including capital stock and
securities held thereby and all assets sold as part of Permitted Sale-Leaseback
Transactions (other than as explicitly set forth in clause (iv) below), but
excluding (i) an aggregate of $1,000,000 of the Net Sale Proceeds from Asset
Sales, (ii) sales of Rental Equipment in the ordinary course of business and
consistent with past practices, (iii) sales or other dispositions of assets
which do not constitute Collateral and (iv) sales of assets as part of Permitted
Sale-Leaseback Transactions consummated after the 60th day following the Closing
Date, in each case to the extent that the Borrower has delivered a certificate
to the Agent on or prior to such date stating that it intends to reinvest the
Net Sale Proceeds therefrom in Inventory, replacement equipment, Rental
Equipment, or property, plant and equipment as the case may be, within 180 days
after the respective date of sale or disposition or, in lieu thereof, commit to
so invest such Net Sale Proceeds within 180 days after such date of sale and
actually expend the funds pursuant to such commitment within 365 days after such
date of sale or disposition, an amount equal to 100% of the Net Sale Proceeds
therefrom shall be applied as a mandatory reduction of the Total Commitments);
PROVIDED, HOWEVER, that to the extent any Net Sale
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Proceeds are not required to be applied pursuant to this Section 2.5(h) as a
result of clause (iv) contained in the parenthetical above, then (x) on the
180th day after the date of the respective sale or disposition, the Net Sale
Proceeds of the respective sale or disposition shall be applied as otherwise
required by this Section 2.5(h) to the extent not actually used or committed to
be used as contemplated by said clause (iv) by such 180th day and (y) on the
365th day after the date of the respective sale or disposition, any Net Sale
Proceeds of the respective sale or disposition shall be applied as otherwise
required by this Section 2.5(h) to the extent same were committed to be used
within 180 days after the respective date of sale or other disposition but were
not in fact used by such 365th day as contemplated by said clause (iv).
(i) Upon the date occurring 15 days after any occurrence of a Change
of Control, unless the Required Lenders otherwise consent in writing, the Total
Commitments shall automatically be reduced to zero.
(j) In addition to any mandatory repayments or commitment reductions
pursuant to this Section 2.5, on the Senior Secured Notes Repayment Date, the
Total Commitments shall be reduced by an amount equal to the Senior Secured
Notes Blocked Commitment as then in effect.
(k) In addition to any mandatory repayments or commitment reductions
pursuant to this Section 2.5, on the Holding Co. Notes Repayment Date, the Total
Commitments shall be reduced by an amount equal to the aggregate principal
amount of Holding Co. Notes then outstanding.
(l) Any reduction to the Total Commitments pursuant to this Section
2.5 shall reduce the Commitment of each of the Lenders PRO RATA (based on the
relative sizes of the Commitments of the various Lenders).
2.6 PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make each
payment hereunder and under the Revolving Notes not later than 1:00 P.M. New
York City time on the day when due in Dollars to the Payments Administrator at
its Payment Office in immediately available funds. The Borrower's obligations
to the Lenders with respect to such payments shall be discharged by making such
payments to the Payments Administrator pursuant to this Section 2.6 or, if such
payments are not received prior to the foregoing deadline, by the Payments
Administrator's adding such payments to the principal amount of the Revolving
Loans outstanding by charging such payments to the Borrower's Revolving Loan
account (which charge shall constitute an incurrence of Revolving Loans (that
are Base Rate Loans) in an aggregate principal amount equal to the amount so
charged).
(b)(i) The Borrower and each of its Subsidiaries shall each, along
with the Collateral Agent and financial institutions selected by the Borrower
and acceptable to the
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Agent (the "Collection Banks"), enter into an agreement substantially in the
form of Exhibit C-1 (as modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof the "Collection Bank Agreement").
The Borrower and each of its Subsidiaries shall instruct all account debtors on
the Accounts of the Borrower or such Subsidiary, as the case may be, to remit
all payments to the applicable "P.O. Boxes" or "Lockbox Addresses" (as defined
in the applicable Collection Bank Agreement) which remittances shall be
collected by the applicable Collection Bank and deposited in the applicable
Collection Account. All amounts received by the Borrower and each of its
Subsidiaries from any account debtor, in addition to all other cash received
from any other source, shall, subject to the requirements of Sections 8.15 and
8.16, upon receipt be deposited into a Collection Account.
(ii) The Borrower and its Subsidiaries may close Collection Accounts
and/or open new Collection Accounts with the prior written consent of the
Collateral Agent and subject to prior execution and delivery to the Collateral
Agent of Collection Bank Agreements consistent with the provisions of this
Section 2.6 and in form and substance satisfactory to the Agent.
(c) Upon the terms and subject to the conditions set forth in the
Collection Bank Agreements, all available amounts held in the Collection
Accounts shall be wired each Business Day into an account (the "Concentration
Account") established pursuant to a concentration account agreement entered into
among the Borrower, the Collateral Agent and BTCo substantially in the form of
Exhibit C-2 (the "Concentration Account Agreement"). Subject to the terms and
conditions of the Concentration Account Agreement, all available funds in the
Concentration Account shall be transferred on every Business Day to an account
(the "BT Account") maintained by the Collateral Agent at BTCo.
(d) All available amounts held in the BT Account shall be distributed
and applied on a daily basis in the following order: FIRST, to the payment of
any Fees, Expenses or other Obligations due and payable to the Agent under any
of the Credit Documents, including amounts advanced by the Payments
Administrator on behalf of the Lenders pursuant to Section 2.3(b), 2.3(c) or
2.4(b); SECOND, to the payment of any Fees, Expenses or other Obligations due
and payable to the Issuing Bank under any of the Credit Documents; THIRD, to the
ratable payment of any Fees, Expenses or other Obligations due and payable to
the Lenders under any of the Credit Documents other than those Obligations
specifically referred to in this Section 2.6(d); FOURTH, to the ratable payment
of interest due on the Revolving Loans; FIFTH, to the ratable payment of
principal on the Revolving Loans; and SIXTH, to the ratable payment of any then
due and owing Obligations arising under any Interest Rate Agreement entered into
by the Borrower in accordance with Section 8.3(g). Any payment received
hereunder as a distribution in any proceeding referred to in Section 9.1(e)
shall, unless paid with respect to amounts specifically owing to the Agent or
the Issuing Bank, be distributed and applied by the Collateral Agent to the
payment of the
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amounts due hereunder and under the Revolving Notes ratably in accordance with
such amounts (or, if a court of competent jurisdiction shall otherwise specify,
as specified by such court).
2.7 MAINTENANCE OF ACCOUNT. The Payments Administrator shall maintain
an account on its books in the name of the Borrower in which the Borrower will
be charged with all loans and advances made by the Lenders to the Borrower or
for the Borrower's account, including the Revolving Loans, the Letter of Credit
Obligations, the Fees, the Expenses and any other Obligations. The Borrower
will be credited, in accordance with Section 2.6 above, with all amounts
received by the Lenders from the Borrower or from others for the Borrower's
account, including, as set forth above, all amounts received by the Payments
Administrator in payment of Accounts and applied to the Obligations. In no
event shall prior recourse to any Accounts or other Collateral be a prerequisite
to the Payments Administrator's right to demand payment of any Obligation upon
its maturity. Further, the Payments Administrator shall have no obligation
whatsoever to perform in any respect any of the Borrower's contracts or
obligations relating to the Accounts.
2.8 STATEMENT OF ACCOUNT. After the end of each month the Payments
Administrator shall send the Borrower a statement accounting for the charges,
loans, advances and other transactions occurring among and between the Agent,
the Lenders, the Issuing Bank and the Borrower during that month. The monthly
statements shall, absent manifest error, be an account stated, which is final,
conclusive and binding on the Borrower.
2.9 TAXES. (a) All payments made by the Borrower hereunder, under
any Revolving Note, or under any other Credit Document will be made without
setoff, counterclaim or other defense. Except as provided in Section 2.9(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
net profits of the Agent or a Lender pursuant to the laws of the jurisdiction in
which the Agent or such Lender, as the case may be, is organized or the
jurisdiction in which the principal office of the Lender or Agent or Applicable
Lending Office of such Lender is located or any subdivision or taxing authority
thereof or therein) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts, duties, fees,
deductions, withholdings, charges, assessments or other liabilities being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due hereunder,
under any Revolving Note, or under any other Credit Document, after withholding
or deduction for or on account of any Taxes, will
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not be less than the amount provided for herein or in such Revolving Note or
such other Credit Document. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, the Borrower agrees to reimburse each
Lender, upon the written request of such Lender, for taxes imposed on or
measured by the net income or net profits of such Lender pursuant to the laws of
the jurisdiction in which such Lender is organized or incorporated or in which
the principal office or Applicable Lending Office of such Lender is located or
of any political subdivision or taxing authority thereof or therein and for any
withholding of income or similar taxes as such Lender shall determine are
payable by, or withheld from, such Lender in respect of such amounts so paid to
or on behalf of such Lender pursuant to this or the preceding sentence. The
Borrower will furnish to the Payments Administrator within 45 days after the
date the payment of any Taxes, or any withholding or deduction on account
thereof, is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower will indemnify and hold
harmless the Agent and each Lender, and reimburse the Agent or such Lender upon
its written request, for the amount of any Taxes so levied or imposed and paid
or withheld by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Agent on or prior to the Closing Date,
or in the case of a Lender that is an assignee or transferee of an interest
under this Credit Agreement pursuant to Section 11.6 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i)(x) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Credit Agreement and under any Revolving Note and (y)
Internal Revenue Service Form W-9, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 2.9(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Credit Agreement and under any Revolving Note. In addition, each Lender
agrees that from time to time after the Closing Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 2.9(b)(ii) Certificate, as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Credit Agreement and any Revolving Note, or it shall
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immediately notify the Borrower and the Agent of its inability to deliver any
such Form or Certificate, in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 2.9(b).
Notwithstanding anything to the contrary contained in Section 2.9(a), but
subject to Section 11.6 and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.9(a) to make any
additional payments to a Lender pursuant to the third and fourth sentences of
Section 2.9(a) (the "Gross-Up Payments") (I) if such Lender has not provided to
the Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 2.9(b) or (II) in the case of a payment, other
than interest, to a Lender described in clause (ii) above, to the extent that
such Forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 2.9 and except as set forth in Section 11.6, the
Borrower agrees to pay additional amounts and to indemnify each Lender in the
manner set forth in Section 2.9(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this Section 2.9
to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that the Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
2.10 SHARING OF PAYMENTS. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of the Revolving Loans made by it or its participation in
Letters of Credit in excess of its Proportionate Share of payments on account of
the Revolving Loans or Letters of Credit obtained by all the Lenders (other than
any Lender that has waived its Proportionate Share in writing), such Lender
shall forthwith purchase from the other Lenders such participation in the
Revolving Loans made by them or in their participation in Letters of Credit as
shall be necessary to cause such purchasing Lender to share the excess payment
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ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and each such Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect to the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10 may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
ARTICLE 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT. Subject to the terms and
conditions of this Credit Agreement and in reliance upon the representations and
warranties of the Borrower set forth herein, upon the request of the Borrower
pursuant to Section 3.4, the Issuing Bank shall issue Letters of Credit
(including Recapitalization Letters of Credit) hereunder and for the Borrower's
account, as more specifically described below. The Issuing Bank shall not be
obligated to issue any Letter of Credit for the account of the Borrower if at
the time of such requested issuance:
(a) The face amount of such requested Letter of Credit when added to
the Letter of Credit Obligations then outstanding, would (i) cause the
Letter of Credit Obligations (excluding Letter of Credit Obligations
resulting from Recapitalization Letters of Credit) to exceed $10,000,000 or
(ii) when added to the aggregate amount of Revolving Loans then outstanding
would exceed (x) the lesser of (A) the Total Available Commitments then in
effect and (B) the Borrowing Base then in effect;
(b) Any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction
over the Issuing Bank shall prohibit, or request the Issuing Bank to
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for
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which the Issuing Bank is not otherwise compensated) not in effect as of the
Closing Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Bank as of the Closing Date and
which the Issuing Bank deems in good faith to be material to it; or
(c) A default of any Lender's obligations to fund under Section 3.6
exists, or such Lender is a Defaulting Lender under Section 2.4(c), or any
Lender has rejected or repudiated its obligations in respect of Letters of
Credit, unless the Agent and the Issuing Bank have entered into
satisfactory arrangements with the Borrower to eliminate the Issuing Bank's
risk with respect to such Lender, including cash collateralization of such
Lender's Proportionate Share of the Letter of Credit Obligations.
3.2 TERMS OF LETTERS OF CREDIT. The Letters of Credit shall be in a
form customarily issued by the Issuing Bank or in such other form as has been
approved by the Issuing Bank. Each Letter of Credit shall be denominated in
Dollars. At the time of issuance, the amount and the terms and conditions of
each Letter of Credit, and the form of any drafts or acceptances thereunder,
shall be subject to approval by the Agent and the Borrower. In no event may the
term of any standby Letter of Credit issued hereunder exceed 12 months (except
that such Letters of Credit may provide for annual renewal) nor the term of any
documentary Letter of Credit exceed 180 days, and all Letters of Credit issued
hereunder shall expire no later than the date that is five Business Days prior
to the Expiration Date. Any Letter of Credit containing an automatic renewal
provision shall also contain a provision pursuant to which, notwithstanding any
other provisions thereof, it shall expire no later than the date that is five
Business Days prior to the Expiration Date.
3.3 LENDERS' PARTICIPATION. Immediately upon the issuance or
amendment by the Issuing Bank of any Letter of Credit in accordance with the
procedures set forth in Section 3.1, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Proportionate Share (based upon its Commitment) of the
liability with respect to such Letter of Credit (including, without limitation,
all obligations of the Borrower with respect thereto, other than amounts owing
to the Issuing Bank consisting of Issuing Bank Fees) and any security therefor
or guaranty pertaining thereto.
3.4 NOTICE OF ISSUANCE. Whenever the Borrower desires the issuance of
a Letter of Credit, the Borrower shall deliver to the Payments Administrator and
the Issuing Bank a written notice no later than 1:00 P.M. New York City time at
least three Business Days (or such shorter period as may be agreed to by the
Issuing Bank) in advance of the proposed date of issuance of a letter of credit
request in substantially the form attached as Exhibit B-2 (a "Letter of Credit
Request"). The Payments Administrator shall promptly
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transmit copies of each Letter of Credit Request to each Lender. The
transmittal by the Borrower of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that the Letter of Credit may
be issued in accordance with and will not violate any of the requirements of
Section 3.1 or 5.2. A Letter of Credit Request may be given in writing or
electronically with prompt confirmation in writing.
3.5 PAYMENT OF AMOUNT DRAWN UNDER LETTERS OF CREDIT. In the event of
any request for drawing under any Letter of Credit by the beneficiary thereof,
the Issuing Bank shall notify the Payments Administrator, which shall notify the
Borrower of such request, to the extent reasonably practicable not later than
11:00 A.M. on the Business Day immediately prior to the date on which the
Issuing Bank intends to honor such drawing. The Borrower shall give notice to
be received by the Payments Administrator and the Issuing Bank not later than
1:00 P.M. on the Business Day immediately prior to the date of the respective
drawing if it intends to reimburse the Issuing Bank for the amount of such
drawing with funds other than the proceeds of Revolving Loans. Such notice from
the Borrower shall be irrevocable and, if given, the Borrower shall reimburse
the Issuing Bank not later than the close of business New York City time on the
day on which such drawing is honored in an amount in same day funds equal to the
amount of such drawing. If the Payments Administrator shall not have timely
received such notice (i) the Borrower shall be deemed to have timely given a
Notice of Borrowing to the Payments Administrator to incur Revolving Loans,
which shall be made as Base Rate Loans, on the date on which such drawing is
honored in an amount equal to the amount of such drawing and (ii) subject to
satisfaction or waiver of the conditions specified in Section 5.2 hereof and the
other terms and conditions of Borrowings contained herein, the Lenders shall, on
the date of such drawing, make Revolving Loans in the amount of such drawing,
the proceeds of which shall be applied directly by the Payments Administrator to
reimburse the Issuing Bank for the amount of such drawing or payment.
Borrowings pursuant to this Section 3.5 shall not be subject to the minimum
amount requirement of Section 2.3(a)(iii). If for any reason, proceeds of
Revolving Loans are not received by the Issuing Bank on such date in an amount
equal to the amount of such drawing, the Borrower shall be obligated to and
shall reimburse the Issuing Bank, on the Business Day immediately following the
date of such drawing, in an amount in same day funds equal to the excess of the
amount of such drawing over the amount of such Revolving Loans, if any, which
are so received, plus accrued interest on such amount at the rate set forth in
Section 4.2; PROVIDED, HOWEVER, that any such payments shall not prejudice any
rights that the Borrower may have against any Lender as a result of any default
by such Lender in funding such Revolving Loans, as provided in the final
sentence of Section 2.4(c).
3.6 PAYMENT BY LENDERS. (a) In the event that the Borrower does not
reimburse the Issuing Bank for the amount of any drawing pursuant to Section 3.5
and the proceeds of Revolving Loans incurred for such purpose are insufficient
for such purpose, the Payments Administrator shall promptly notify each Lender
of the unreimbursed amount
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and of such Lender's respective participation therein. Each Lender shall make
available to the Issuing Bank an amount equal to its respective participation in
same day funds, at the office of such Issuing Bank specified in such notice, not
later than 1:00 P.M. New York City time on the Business Day after the date
notified by the Payments Administrator. In the event that any Lender fails to
make available to the Issuing Bank the amount of such Lender's participation in
such Letter of Credit as provided in this Section 3.6, the Issuing Bank shall be
entitled to recover such amount on demand from such Lender, together with
interest at the Federal Funds Rate.
(b) The Payments Administrator or the Issuing Bank, as the case may
be, shall distribute to each Lender which has paid all amounts payable by it
under this Section 3.6 with respect to any Letter of Credit, such Lender's
Proportionate Share of all payments subsequently received by the Payments
Administrator or the Issuing Bank, as the case may be, from the Borrower in
reimbursement of drawings honored under such Letter of Credit when such payments
are received.
3.7 NATURE OF ISSUING BANK'S DUTIES. In determining whether to pay
under any Letter of Credit, the Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered under
that Letter of Credit have been delivered and that they substantially comply on
their face with the requirements of that Letter of Credit. As between the
Borrower, the Issuing Bank and each other Lender, the Borrower assumes all risks
of the acts and omissions of, or misuse of the Letter of Credit issued by the
Issuing Bank by, the respective beneficiaries of such Letter of Credit;
provided, however, that nothing in this sentence shall relieve the Issuing Bank
of liability for its gross negligence or wilful misconduct. In furtherance and
not in limitation of the foregoing, neither the Issuing Bank nor any of the
other Lenders shall be responsible (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
such Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged, (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign such Letter of Credit, or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason, (iii) for failure of the beneficiary
of such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit, (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, telecopy, facsimile or otherwise, whether or not they be in cipher, (v)
for errors in interpretation of technical terms, (vi) for any loss or delay in
the transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit, or of the proceeds thereof, (vii) for
the misapplication by the beneficiary of such Letter of Credit of the proceeds
of any drawing honored under such Letter of Credit, or (viii) for any
consequences arising from actions or omissions taken or omitted in good faith or
from causes
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beyond the control of the Issuing Bank or the other Lenders; PROVIDED, HOWEVER,
that nothing in this sentence shall relieve the Issuing Bank of liability for
its own gross negligence or willful misconduct.
3.8 OBLIGATIONS ABSOLUTE. The obligations of the Borrower to
reimburse the Issuing Bank for drawings honored under a Letter of Credit issued
by it and the obligations of the Lenders under Section 3.6 shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Credit Agreement under all circumstances including, without
limitation, the following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which
the Borrower or any Affiliate of the Borrower may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), the
Issuing Bank, any Lender or any other Person, whether in connection with
this Credit Agreement, the transactions contemplated herein or any
unrelated transaction (other than the defense that the amount owed has
already been paid in accordance with the terms of this Credit Agreement);
PROVIDED, HOWEVER, that nothing contained herein shall preclude the
Borrower from asserting any such claim, defense or counterclaim in a
separate judicial proceeding or by compulsory counterclaim;
(c) any draft, demand, certificate or any other documents presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(d) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents;
(e) payment by the Issuing Bank under any Letter of Credit against
presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(f) failure of any drawing under a Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of any
drawing; or
(g) the fact that a Default or Event of Default shall have occurred
and be continuing;
PROVIDED, HOWEVER, that the Borrower shall have no obligation to reimburse the
Issuing Bank and the Lenders shall have no obligation under Section 3.6 in the
event of the Issuing
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Bank's willful misconduct or gross negligence in determining whether documents
presented under the Letter of Credit comply with the terms of such Letter of
Credit or with respect to any other express obligation the Issuing Bank may have
under this Credit Agreement in making any payment pursuant to any Letter of
Credit.
ARTICLE 4.
INTEREST, FEES AND EXPENSES
4.1 INTEREST ON EURODOLLAR RATE LOANS. Subject to the provisions of
Section 4.4 hereof, interest on Eurodollar Rate Loans shall be payable in
arrears (i) on the last day of each Interest Period with respect to such
Eurodollar Rate Loans (and, in the case of any Interest Period in excess of
three months, on each date which occurs at three month intervals after the first
day of the respective Interest Period), (ii) at the date of any Conversion
thereof (or portion thereof) to a Base Rate Loan, (iii) upon any prepayment,
except pursuant to Section 2.6(d), (on the amount prepaid) and (iv) at maturity,
in each case at an interest rate per annum equal during each Interest Period for
such Eurodollar Rate Loan to the Adjusted Eurodollar Rate in effect for such
Interest Period in effect for such Eurodollar Rate Loan plus the relevant
Applicable Margin. The Payments Administrator upon determining the Adjusted
Eurodollar Rate for any Interest Period shall promptly notify the Borrower and
the Lenders thereof. Each determination by the Payments Administrator of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
4.2 INTEREST ON BASE RATE LOANS. Subject to the provisions of Section
4.4 hereof, interest on Base Rate Loans shall be payable quarterly in arrears
(i) on the last Business Day of each calendar quarter, (ii) upon any prepayment,
except pursuant to Section 2.6(d), (on the amount prepaid) and (iii) at
maturity, in each case at an interest rate per annum equal to the Base Rate plus
the relevant Applicable Margin. Each determination by the Payments
Administrator of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
4.3 NOTICE OF CONTINUATION AND NOTICE OF CONVERSION. (a) With respect
to any Borrowing consisting of Eurodollar Rate Loans, the Borrower may, subject
to the provisions of Section 4.3(c) and the condition that no Default or Event
of Default then exists, elect to maintain such Borrowing or any portion thereof
equal to at least $1,000,000 as Eurodollar Rate Loans by selecting a new
Interest Period for such Borrowing (or portion thereof), which new Interest
Period shall commence on the last day of the immediately preceding Interest
Period. Each selection of a new Interest Period (a "Continuation") shall be
made by notice given not later than 12:00 Noon New York City time on the third
Business Day prior to the date of any such Continuation, by the Borrower to the
Payments Adminis-
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trator. Such notice (a "Notice of Continuation") shall be by telephone,
telecopy, telex, facsimile or cable, confirmed immediately in writing if by
telephone, in substantially the form of Exhibit B-3, which shall be completed in
such manner as is necessary to comply with all limitations on Revolving Loans
outstanding hereunder. If the Borrower shall fail to, or does not have the
right to, select a new Interest Period for any Borrowing consisting of
Eurodollar Rate Loans in accordance with this Section 4.3(a), such Loans will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Loans.
(b) The Borrower may on any Business Day occurring on or after the
Syndication Date (PROVIDED that no Default or Event of Default has occurred and
is continuing), upon notice (each such notice, a "Notice of Conversion") given
to the Payments Administrator, and subject to the provisions of Section 4.3(c),
Convert the entire amount of or a portion of Revolving Loans of one Type into a
Borrowing of Revolving Loans of the other Type; PROVIDED, HOWEVER, that any
Conversion of any Eurodollar Rate Loans into Base Rate Loans shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate Loans.
Each such Notice of Conversion shall be given not later than 12:00 Noon New York
City time on the Business Day prior to the date of any proposed Conversion into
Base Rate Loans and on the third Business Day prior to the date of any proposed
Conversion into Eurodollar Rate Loans. Subject to the restrictions specified
above, each Notice of Conversion shall be by telephone, telecopy, telex,
facsimile or cable, confirmed immediately in writing if by telephone, in
substantially the form of Exhibit B-4. Each Conversion shall be in an aggregate
amount for the Revolving Loans of all Lenders of not less than $250,000.
(c) Notwithstanding anything contained in Section 2.3 or Sections
4.3(a) and (b) above to the contrary,
(i) if, on or prior to the first day of any Interest Period, the
Payments Administrator is unable to determine the Adjusted Eurodollar Rate
for Eurodollar Rate Loans comprising any requested Borrowing, Continuation
or Conversion, the right of the Borrower to select or maintain Eurodollar
Rate Loans for such Borrowing or any subsequent Borrowing shall be
suspended until the Payments Administrator shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist,
and each Revolving Loan comprising such Borrowing shall be made as, or
Converted into, a Base Rate Loan; provided that, promptly after the
Payments Administrator reasonably determines that the circumstances giving
rise to such suspension no longer exist, the Payments Administrator shall
notify the Borrower and the Lenders, and the obligation of the Lenders to
make, convert and continue Eurodollar Rate Loans shall be reinstated;
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(ii) if the Required Lenders shall, at least one Business Day before
the date of any requested Borrowing, Continuation or Conversion, notify the
Payments Administrator that the Adjusted Eurodollar Rate for Revolving
Loans comprising such Borrowing will not adequately reflect the cost to
such Lenders of making or funding their respective Revolving Loans for such
Borrowing, the right of the Borrower to select Eurodollar Rate Loans for
such Borrowing shall be suspended until the Payments Administrator shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Revolving Loan comprising such
Borrowing shall be made as, or Converted into, a Base Rate Loan; and;
provided that, promptly after the Payments Administrator and the Required
Lenders reasonably determine that the circumstances giving rise to such
suspension no longer exist, the Payments Administrator shall notify the
Borrower and the Lenders, and the obligation of the Lenders to make,
convert and continue Eurodollar Rate Loans shall be reinstated; and
(iii) there shall not be at any one time more than eight Interest
Periods in effect with respect to Eurodollar Rate Loans.
(d) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on the Borrower. In the case of any Borrowing,
Continuation or Conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of Eurodollar
Rate Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill, on or
before the date for such Borrowing, Continuation or Conversion specified in such
Notice of Borrowing, Notice of Continuation or Notice of Conversion, the
applicable conditions set forth in Article 5, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund the Eurodollar Rate Loan to be made by such Lender as part of
such Borrowing, Continuation or Conversion.
4.4 INTEREST AFTER DEFAULT. Interest on any amount of matured
principal of the Revolving Loans, and interest on the amount of principal of the
Revolving Loans outstanding as of the date a Default an Event of Default occurs,
and at all times thereafter until the earlier of the date upon which (i) all
Obligations have been paid and satisfied in full or (ii) such Default or Event
of Default shall have been cured or waived, shall be payable on demand at a rate
equal to the rate at which the Revolving Loans are bearing interest pursuant to
Sections 4.1 or 4.2 above plus 2%, or, if higher, the Base Rate in effect from
time to time plus the sum of (x) the Applicable Margin for Base Rate Loans then
in effect and (y) 2%.
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4.5 REIMBURSEMENT OF EXPENSES. (a) From and after the Closing Date,
the Borrower shall promptly reimburse the Agent for all Expenses of the Agent as
the same are incurred by the Agent and upon receipt of invoices therefor and, if
requested by the Borrower, such reasonable backup materials and information
(other than backup materials and information relating to the calculation of
breakage costs) as the Borrower shall reasonably request.
(b) If any payment of principal of, or any Conversion of, any
Eurodollar Rate Loan is made other than on the last day of an Interest Period
applicable thereto for any reason, the Borrower shall, upon demand by any Lender
(with a copy of such demand to the Payments Administrator), pay to the Payments
Administrator for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Eurodollar Rate Loan.
4.6 UNUSED LINE FEE. The Borrower shall pay to the Payments
Administrator for the benefit of each of the Lenders (other than a Defaulting
Lender for so long as such Lender is a Defaulting Lender) a non-refundable fee
(the "Unused Line Fee") equal to the Applicable Margin then in effect for Unused
Line Fees, per annum on the unused portion of such Lender's Commitment, which
Unused Line Fee shall (i) accrue from the Closing Date until the Expiration Date
or any earlier date on which the Total Commitment is terminated and (ii) be due
and payable quarterly in arrears on the last Business Day of March, June,
September and December, and on the Expiration Date or any earlier date on which
the Total Commitment is terminated.
4.7 LETTER OF CREDIT FEES. (a) The Payments Administrator shall be
entitled to charge to the account of the Borrower (i) for the ratable benefit of
the Lenders, a fee (the "Letter of Credit Fee"), in an amount equal to the
Applicable Margin then in effect for Eurodollar Rate Loans per annum of the
daily weighted average amount of outstanding Letter of Credit Obligations during
the immediately preceding quarter, due and payable quarterly in arrears on the
last Business Day of March, June, September and December, and on the Expiration
Date or any earlier date on which all Letters of Credit have been terminated and
(ii) as and when incurred by the Payments Administrator or any Lender, any
administrative charges, fees, costs and expenses charged to the Payments
Administrator or any Lender for the Borrower's account by the Issuing Bank
(other than any fees charged to the Payments Administrator or any Lender which
would be duplicative of the Letter of Credit Fee paid to the Payments
Administrator for the benefit of the Lenders) (the "Issuing Bank Fees") in
connection with the issuance of any Letters of Credit by the Issuing Bank. Each
determination by the Payments Administrator of Letter of Credit Fees hereunder
shall be conclusive and binding for all purposes, absent manifest error. In
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addition, the Borrower shall pay to the Issuing Bank, for its own benefit, the
Letter of Credit facing fees outlined in the Fee Letter.
(b) Letter of Credit Fees payable in respect of Letter of Credit
Obligations outstanding as of the date a Default or an Event of Default occurs,
and at all times thereafter until the earlier of the date upon which (i) all
Obligations have been paid and satisfied in full or (ii) such Default or Event
of Default shall have been cured or waived, shall be payable on demand at a rate
equal to the rate at which the Letter of Credit Fees are charged pursuant to
Section 4.7(a) above, plus 2% per annum.
4.8 OTHER FEES AND EXPENSES. The Borrower agrees to pay (without
duplication) fees to BTCC in the amounts and at the times set forth in the Fee
Letter.
4.9 AUTHORIZATION TO CHARGE ACCOUNT. The Borrower hereby authorizes
the Payments Administrator, subject to prior notice to the Borrower, to charge
the Borrower's Revolving Loan account with the amount of all Fees, Expenses and
other payments to be paid hereunder, under the Fee Letter and under the other
Credit Documents as and when such payments become due. The Borrower confirms
that any charges which the Payments Administrator may so make to the Borrower's
Revolving Loan account as herein provided will be made as an accommodation to
the Borrower and solely at the Payments Administrator's discretion.
4.10 INDEMNIFICATION IN CERTAIN EVENTS. (a) If after the Closing
Date, either (i) any change in or in the interpretation of any law or regulation
is introduced, including, without limitation, with respect to reserve
requirements, applicable to the Agent, the Issuing Bank or any of the Lenders
(or, in the case of a Lender which is not a banking institution, any Affiliate
of such Lender funding such Lender ("Funding Affiliate")), or (ii) the Agent,
the Issuing Bank, or any of the Lenders (or, in the case of a Lender which is
not a banking institution, any Funding Affiliate) complies with any future
guideline or request from any central bank or other Governmental Authority or
(iii) the Agent, the Issuing Bank, or any of the Lenders (or, in the case of a
Lender which is not a banking institution, any Funding Affiliate) reasonably
determines that the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof has or would
have the effect described below, or the Agent, the Issuing Bank, or any of the
Lenders (or, in the case of a Lender which is not a banking institution, any
Funding Affiliate) complies with any future request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, and in the case of any event set forth in
this clause (iii), such adoption, change or compliance has or would have the
direct or indirect effect of reducing the rate of return on any of such Person's
(or any Funding Affiliate's) capital as a consequence of its obligations
hereunder to a level
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below that which such Person could have achieved but for such adoption, change
or compliance (taking into consideration such Person's (or any Funding
Affiliate's) policies with respect to capital adequacy) by an amount deemed by
such Person to be material, and any of the foregoing events described in clauses
(i), (ii) or (iii) increases the cost or reduces the rate of return to the
Agent, the Issuing Bank or any of the Lenders of (A) (I) with respect to an
event described in clauses (i) and (ii), making or maintaining its Eurodollar
Rate Loans, and (II) with respect to an event described in clause (iii), funding
or maintaining its Commitment or (B) issuing, making or maintaining any Letter
of Credit or of purchasing or maintaining any participation therein, or reduces
the amount receivable in respect thereof by the Agent, the Issuing Bank or any
Lender, then the Borrower shall within 15 days after demand by the Agent, pay to
the Payments Administrator, for the account of each applicable Lender or the
Issuing Bank, as the case may be, additional amounts sufficient to indemnify the
Agent, the Lenders or the Issuing Bank against such increase in cost or
reduction in amount receivable allocable to the Agent's, such Lenders' or the
Issuing Bank's, as the case may be, funding or maintaining its Commitment or
issuing, making or maintaining any Letter of Credit or purchasing or maintaining
any participation therein. A certificate as to the amount of such increased
cost and setting forth in reasonable detail the calculation thereof shall be
submitted to the Borrower by the Agent, or the applicable Lender or the Issuing
Bank, as the case may be, and shall be conclusive absent manifest error.
(b) Each Lender, the Issuing Bank or the Agent will notify the
Borrower and the Payments Administrator of any event occurring after the Closing
Date which will entitle such Lender, the Issuing Bank or Agent to payment
pursuant to Section 4.10(a) as promptly as practicable after it obtains
knowledge thereof, specifying the event giving rise to such claim and setting
out in reasonable detail an estimate of the basis and computation of such claim.
Upon receipt of such notice, the Borrower shall compensate such Lender, the
Issuing Bank or Agent in accordance with Section 4.10(a) from the date such
costs are incurred (including, without limitation, where such costs are
retroactively applied); PROVIDED, HOWEVER, that the Borrower shall not be
required to compensate a Lender, the Issuing Bank or Agent for costs incurred
earlier than 90 days prior to the date of the notice required to be delivered to
the Borrower pursuant to this Section 4.10(b).
4.11 CALCULATIONS. All calculations of (i) interest hereunder and
(ii) Fees, including, without limitation, Unused Line Fees and Letter of Credit
Fees shall be made by the Payments Administrator, on the basis of a year of 360
days, or, if such computation would cause the interest and Fees chargeable
hereunder to exceed the Highest Lawful Rate, 365/366 days, in each case for the
actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest or Fees are payable. Each
determination by the Payments Administrator of an interest rate or payment
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
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4.12 CHANGE OF APPLICABLE LENDING OFFICE. Each Lender agrees that on
the occurrence of any event giving rise to the operation of Sections 2.9, 4.3(c)
or 4.10 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Revolving Loans or Letters of Credit
affected by such event, PROVIDED that such designation is made on such terms
that such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of such Sections. Nothing in this Section 4.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in Sections 2.9, 4.3 or 4.10.
ARTICLE 5.
CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL LOANS AND LETTERS OF CREDIT. Except as
provided in Section 11.20, the obligation of each Lender to make Revolving Loans
hereunder and the obligation of the Issuing Bank to issue Letters of Credit, in
each case constituting the Initial Credit Event, is subject to the satisfaction
of, or waiver of, immediately prior to or concurrently with the making of such
Revolving Loans or the issuance of such Letters of Credit on the Closing Date,
the following conditions precedent:
(a) EXECUTION OF AGREEMENT; NOTES. On or prior to the Closing Date,
this Credit Agreement shall have become effective as provided in Section
11.14 and there shall have been delivered to the Payments Administrator for
the account of each Lender the appropriate Revolving Note in the amount,
maturity and as otherwise provided herein.
(b) OFFICER'S CERTIFICATE. On the Closing Date, the Agent shall have
received a certificate from the Borrower dated such date signed by an
appropriate officer of the Borrower stating that all of the applicable
conditions set forth in Sections 5.1(d)(C), (e), (h), (i), (j), (k), (l),
(m) and (ee) and 5.2(a), (b), (c) and (d) exist as of such date, provided
the certificate shall not be required to certify as to the acceptability of
any items to the Agent and/or the Required Lenders or as to whether the
Agent and/or the Required Lenders are satisfied with any of the matters
described in said Sections.
(c) OPINIONS OF COUNSEL. On the Closing Date, the Agent shall have
received opinions, addressed to the Agent, the Collateral Agent and each of
the Lenders and dated the Closing Date, (i) from ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to Holdings and the Borrower, which
opinion shall cover
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the matters contained in Exhibit E-1 and such other matters incident to the
transactions contemplated herein as the Agent may reasonably request, (ii)
from White & Case, special counsel to the Lender, which opinion shall cover
the matters contained in Exhibit E-2 and (iii) from local counsel
reasonably satisfactory to the Agent, opinions each of which shall be in
form and substance reasonably satisfactory to the Agent and shall cover the
perfection of the security interest granted pursuant to the Security
Agreement and the Mortgages and such other matters incident to the
transaction contemplated herein as the Agent may reasonably request.
(d) SECURITY AGREEMENT. On the Closing Date, the Borrower and each of
the Guarantors shall have duly authorized, executed and delivered a
Security Agreement in the form of Exhibit F (as modified, amended or
supplemented from time to time in accordance with the terms thereof and
hereof, the "Security Agreement") together with:
(A) executed copies of Financing Statements (Form UCC-1) in
appropriate form for filing under the UCC of each jurisdiction as may
be necessary to perfect the security interests purported to be created
by the Security Agreement;
(B) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of recent date listing all
effective financing statements that name Holdings, the Borrower or any
of their respective Subsidiaries as debtor and that are filed in the
jurisdictions referred to in clause (A), together with copies of such
financing statements (none of which shall cover the Collateral except
(x) those with respect to which appropriate termination statements
executed by the secured lender thereunder have been delivered to the
Agent and (y) to the extent evidencing Permitted Liens);
(C) subject to Section 11.20, evidence that, with respect to all
Certificated Units of the Borrower and its Subsidiaries on the Closing
Date, either (x) a notation of the security interest of the Collateral
Agent has been made on the certificate of title with respect thereto
(or application for such notation has been, or will substantially
concurrently with the Closing be, made) which notation shall, under
applicable state law, perfect the Collateral Agent's security interest
therein or (y) an opinion of counsel satisfactory to the Agent to the
effect that such notation of a security interest on the relevant
certificate of title under applicable state law is not required to
perfect the security interests therein created pursuant to the
Security Agreement;
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(D) subject to Section 11.19, evidence that all other filings
of, or with respect to, the Security Agreement as may be necessary or,
in the opinion of the Collateral Agent, desirable to perfect the
security interests intended to be created by the Security Agreement
have been completed or will be completed substantially concurrently
with the Closing; and
(E) subject to Section 11.19, evidence that all other actions
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect and protect the security interests purported to
be created by the Security Agreement have been taken.
(e) COLLATERAL ACCESS AGREEMENTS. On the Closing Date, the Agent
shall have received Collateral Access Agreements substantially in the form
of Exhibit G (as modified, amended, or supplemented from time to time in
accordance with the terms hereof and thereof, the "Collateral Access
Agreements") with respect to Rental Equipment locations as may be requested
by the Agent, which Collateral Access Agreements shall be in full force and
effect; PROVIDED that, notwithstanding the foregoing, (i) the Borrower, in
obtaining the Collateral Access Agreements required under this Section
5.1(e), shall not be obligated to make significant payments to landlords or
alter the respective lease terms with respect to any Rental Equipment
locations in any way which is materially adverse to the Borrower, and (ii)
so long as the Borrower has used its reasonable good faith efforts
(exercised in a timely fashion) to obtain the Collateral Access Agreements
described above, this Section 5.1(e) shall be deemed satisfied on the
Closing Date notwithstanding the fact that all of said Collateral Access
Agreements may not have been obtained.
(f) COLLECTION BANK AGREEMENTS; CONCENTRATION ACCOUNT AGREEMENT. On
the Closing Date, the Agent shall have received fully executed copies of
the Collection Bank Agreements and the Concentration Account Agreements,
each of which shall be in full force and effect.
(g) BORROWING BASE CERTIFICATE. On the Closing Date, the Borrower
shall have delivered to the Agent a Borrowing Base Certificate meeting the
requirements of Section 7.1(e) and which Borrowing Base Certificate shall
indicate (in a manner satisfactory to the Agent) that on such date and
after giving effect to the consummation of the Transaction and all Credit
Events on such date, the Borrower shall be able to incur additional
Outstandings, after giving effect to the Outstandings on the Closing Date,
of $40,000,000 or more in compliance with the Borrowing Base restrictions.
(h) EQUITY ISSUANCE. On or prior to the Closing Date, (a) Holdings
shall have received gross cash proceeds of (i) at least $130 million in
connection with the
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issuance to the Equity Investors and (ii) at least $5 million in connection
with the issuance to Persons satisfactory to the Agent, in each case by
Holdings of Holdings Common Stock (the "Common Stock Financing"), (b)
existing shareholders and members of management of Holdings reasonably
satisfactory to the Agent shall have retained at least $24 million of
existing common stock and options to purchase existing common stock (valued
on the same basis as the common stock, but subtracting any unpaid exercise
price) of Holdings after giving effect to the Transaction (the "Equity
Rollover", and together with the Common Stock Financing, the "Equity
Issuance"), (c) the Agent shall have received true and correct copies of
all agreements or documents governing, or related to, the Equity Issuance
(the "Equity Issuance Documents") and (d) all the terms and conditions of
the Equity Issuance Documents shall be in form and substance reasonably
satisfactory to the Agent. All conditions precedent to the consummation of
the Equity Issuance as set forth in the Equity Issuance Documents shall
have been satisfied, and not waived in any material respect unless
consented to by the Agent, to the reasonable satisfaction of the Agent.
Holdings shall have used all cash proceeds received from the Equity
Issuance to make payments owing in connection with the Transaction prior to
or concurrently with the Borrower's utilization of the Revolving Loans for
such purpose. The Equity Issuance shall have occurred in accordance with
the terms and conditions of the Equity Issuance Documents and all
applicable law.
(i) ISSUANCE OF SENIOR UNSECURED NOTES. On or prior to the Closing
Date, the Borrower shall have received gross cash proceeds (without giving
effect to any discounts or commissions to initial purchasers) of not less
than $400 million from the issuance of a like principal amount of Senior
Unsecured Notes (the issuance of the Senior Unsecured Notes, the "Senior
Unsecured Notes Issuance"). The Agent shall have received true and correct
copies of all agreements or documents governing, or related to, the Senior
Unsecured Notes Issuance (the "Senior Unsecured Notes Documents") and all
terms and conditions of the Senior Unsecured Note Documents and the Senior
Unsecured Notes shall be in form and substance reasonably satisfactory to
the Agent and, in any event, the Senior Unsecured Notes shall not be
secured by any asset of Holdings, the Borrower or any of their respective
Subsidiaries. The Borrower shall have used all net cash proceeds received
from the Senior Unsecured Notes Issuance to make payments owing in
connection with the Transaction prior to or concurrently with the
utilization of Revolving Loans for such purpose. The Senior Unsecured
Notes Issuance shall have occurred in accordance with the terms and
conditions of the Senior Unsecured Note Documents and all applicable law.
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(j) RECAPITALIZATION; ETC. (i) On the Closing Date, Holdings shall
have repurchased all of its outstanding capital stock other than that being
reinvested or issued pursuant to the Equity Rollover (the "Stock
Repurchase").
(ii) On the Closing Date and concurrently with the Credit Events then
occurring (1) the total commitments under the Existing Credit Agreement
shall have been terminated, and all loans thereunder shall have been repaid
in full, together with interest thereon, (2) all other amounts owing
pursuant to the Existing Credit Agreement shall have been repaid in full,
(3) the Existing Credit Agreement shall have been terminated and (4) the
Agent shall have received evidence in form, scope and substance
satisfactory to it that the matters set forth in this Clause (j)(ii) have
been satisfied on such date. On the Closing Date and concurrently with the
Credit Events then occurring, the creditors under the Existing Credit
Agreement shall have terminated and released all security interests and
Liens on the capital stock of the Borrower or any of its respective
Subsidiaries, or any other assets owned by Holdings, the Borrower or any of
their respective Subsidiaries granted in connection with the Existing
Credit Agreement. In connection with the preceding sentence, the Agent
shall have received such releases of security interests in and Liens on the
capital stock of Holdings, the Borrower or any of their respective
Subsidiaries, or any other assets owned by the Borrower and its respective
Subsidiaries, as may have been requested by the Agent, which releases shall
be in form and substance satisfactory to the Agent. Without limiting the
foregoing, there shall have been delivered (w) proper termination
statements (Form UCC-3 or the appropriate equivalent) for filing under the
UCC of each jurisdiction where a financing statement (Form UCC-1 or the
appropriate equivalent) was filed with respect to Holdings, the Borrower or
any of their respective Subsidiaries in connection with the security
interests created with respect to the Existing Credit Agreement and the
documentation related thereto, (x) termination or reassignment of any
security interest in, or Lien on, any patents, trademarks, copyrights, or
similar interests of Holdings, the Borrower or any of their respective
Subsidiaries on which filings have been made, (y) terminations of all
mortgages, leasehold mortgages and deeds of trust created with respect to
property of Holdings, the Borrower or any of their respective Subsidiaries,
in each case, to secure the obligations under the Existing Credit
Agreement, all of which shall be in form and substance satisfactory to the
Agent, and (z) all collateral owned by Holdings, the Borrower or any of
their respective Subsidiaries in the possession of Congress Financial
Corporation, in its capacity as agent under the Existing Credit Agreement
or collateral agent under any related security document or any other agent,
collateral agent or trustee for the creditors under the Existing Credit
Agreement.
(iii) On or prior to the Closing Date and concurrently with the
Credit Events then occurring, the Borrower shall have consummated a tender
offer/consent
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solicitation with respect to the outstanding Senior Secured Notes (the
"Senior Secured Notes Tender Offer/Consent Solicitation"), pursuant to
which (1) the Borrower shall offer, subject to the terms and conditions
contained in the Senior Secured Notes Tender Offer/Consent Solicitation, to
purchase all of the outstanding Senior Secured Notes at the cash price set
forth in the Senior Secured Notes Tender Offer/Consent Solicitation and (2)
consents shall be solicited to a proposed amendment to the Senior Secured
Notes Indenture and other Senior Secured Notes Collateral Documents, on
terms and conditions satisfactory to the Agent, which amendment shall
provide for the substantial elimination of the financial and certain
operating covenants contained in the Senior Secured Notes Indenture
(including, without limitation, limitations on the incurrence of liens,
restricted payments, transactions with affiliates and indebtedness) and the
amendment or elimination of certain other provisions in the Senior Secured
Notes Collateral Documents. All terms and conditions of the Senior Secured
Notes Tender Offer/Consent Solicitation shall be satisfactory to the Agent,
and the period for tendering Senior Secured Notes pursuant thereto shall
terminate on or prior to the Closing Date. On or prior to the Closing
Date, (x) the Borrower shall have received sufficient consents to authorize
the execution and delivery of the Senior Secured Notes Indenture
Supplement, (y) the Borrower and the trustee under the Senior Secured Notes
Indenture shall have duly executed and delivered the Senior Secured Notes
Indenture Supplement and (z) the Senior Secured Notes Collateral Documents
Amendments shall have been duly executed and delivered. On the Closing
Date and concurrently with the Credit Events then occurring, the Borrower
shall have repurchased the Senior Secured Notes tendered, and not
theretofore withdrawn, pursuant to the Senior Secured Notes Tender
Offer/Consent Solicitation (the "Senior Secured Notes Tender Offer
Repurchases").
(iv) On or prior to the Closing Date and concurrently with the Credit
Events then occurring, Holdings shall have consummated a tender
offer/consent solicitation with respect to the outstanding Holding Co.
Notes (the "Holding Co. Notes Tender Offer/Consent Solicitation"), pursuant
to which (1) Holdings shall offer, subject to the terms and conditions
contained in the Holding Co. Notes Tender Offer/Consent Solicitation, to
purchase all of the outstanding Holding Co. Notes at the cash price set
forth in the Holding Co. Notes Tender Offer/Consent Solicitation and (2)
consents shall be solicited to a proposed amendment to the Holding Co.
Notes Indenture, on terms and conditions satisfactory to the Agent, which
amendment shall provide for the substantial elimination of the financial
and certain operating covenants contained in the Holding Co. Notes
Indenture (including, without limitation, limitations on the incurrence of
liens, restricted payments, transactions with affiliates and indebtedness).
All terms and conditions of the Holding Co. Notes Tender Offer/Consent
Solicitation shall be satisfactory to the Agent, and the period for
tendering Holding Co. Notes pursuant thereto shall
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terminate on or prior to the Closing Date. On or prior to the Closing
Date, (x) Holdings shall have received sufficient consents to authorize the
execution and delivery of the Holding Co. Notes Indenture Supplement and
(y) Holdings and the trustee under the Holding Co. Notes Indenture shall
have duly executed and delivered the Holding Co. Notes Indenture
Supplement. On the Closing Date and concurrently with the Credit Events
then occurring, Holdings shall have repurchased the Holding Co. Notes
tendered, and not theretofore withdrawn, pursuant to the Holding Co. Notes
Tender Offer/Consent Solicitation (the "Holding Co. Notes Tender Offer
Repurchases").
(v) On the Closing Date and after giving effect to the Transaction
and the Revolving Loans incurred on the Closing Date, neither Holdings, the
Borrower nor any of their respective Subsidiaries shall have any
Indebtedness outstanding except for (i) Indebtedness created under this
Credit Agreement and the other Credit Documents, (ii) the Senior Unsecured
Notes, (iii) those Senior Secured Notes not purchased pursuant to the
Senior Secured Notes Tender Offer Repurchases (which in no event shall have
an aggregate principal amount in excess of $82,499,999 million), (iv) those
Holding Co. Notes not purchased pursuant to the Holding Co. Notes Tender
Offer Repurchases (which in no event shall have an aggregate principal
amount in excess of $14,645,499), (v) the Existing Indebtedness and (vi)
such other Indebtedness, if any, as shall be permitted to remain
outstanding by the Agent. On and as of the Closing Date, all Existing
Indebtedness (excluding any issue of Existing Indebtedness with an
aggregate principal amount then outstanding of less than $1,000,000, so
long as the aggregate principal amount of all outstanding Existing
Indebtedness excluded pursuant to this parenthetical does not exceed
$4,000,000) and any Senior Secured Notes and Holding Co. Notes which are
not accepted for purchase pursuant to the tender offers described above,
shall remain outstanding after giving effect to the Transaction and the
other transactions contemplated hereby without any default or events of
default existing thereunder or arising as a result of the Transaction and
the other transactions contemplated hereby (except to the extent amended or
waived by the parties thereto on terms and conditions satisfactory to the
Agent), and there shall not be any amendments or modifications to the
Existing Indebtedness Agreements other than as requested or approved by the
Agent. On and as of the Closing Date, the Agent shall be satisfied with
the amount of and the terms and conditions of all Existing Indebtedness.
(vi) On or prior to the Closing Date, the Agent shall have received
true and correct copies of the Recapitalization Documents, certified as
such by an appropriate officer of Holdings, each of which shall have been
duly authorized, executed and delivered by the parties thereto and shall be
in full force and effect and in form and substance (including all terms and
conditions thereof) reasonably satisfactory to the Agent. On or prior to
the Closing Date, all conditions set forth
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in the Recapitalization Documents shall have been satisfied in all material
respects and not waived (unless waived with the consent of the Agent, which
shall not be unreasonably withheld) and the Recapitalization shall have
been consummated in all material respects in accordance with the
Recapitalization Documents and all applicable laws.
(k) APPROVALS. All necessary material governmental (domestic and
foreign) and third party approvals and/or consents in connection with the
Transaction, the transactions contemplated by the Transaction Documents and
otherwise referred to herein or therein shall have been obtained and remain
in full force and effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents, or imposes materially adverse conditions upon, the
consummation of the Transaction, the making of any Revolving Loans or the
issuance of any Letters of Credit or the other transactions contemplated
hereby. There shall not have been any statute, rule regulation, injunction
or order applicable to the Transaction, or the financing thereof,
promulgated, enacted, entered or enforced by any state or federal
government or governmental or regulatory authority or agency or by any
federal or state court or tribunal, nor shall there be pending any action
or proceeding by or before any such authority, court or tribunal, involving
a substantial likelihood of an order, that would prohibit, restrict, delay
or otherwise materially adversely affect the Transaction or the financing
thereof.
(l) MATERIAL ADVERSE CHANGE, ETC. Since April 7, 1997, nothing shall
have occurred (and neither the Agent nor the Lenders shall have become
aware of any facts or conditions not previously known) which the Agent
shall reasonably determine could have a materially adverse effect on the
Transaction or a Material Adverse Effect.
(m) LITIGATION. On the Closing Date, with the exception of the
Disclosed Litigation, there shall be no actions, suits, investigations or
proceedings pending or threatened (a) with respect to this Credit
Agreement, any other Credit Document, the Transaction or any document
executed in connection therewith, or (b) which BTCC shall determine is
reasonably likely to have a materially adverse effect on the Transaction or
a Material Adverse Effect.
(n) CORPORATE PROCEEDINGS. (i) On the Closing Date, the Agent shall
have received a certificate from each Credit Party, dated the Closing Date,
signed by the secretary or any assistant secretary of such Credit Party in
the form of Exhibit H with appropriate insertions, together with copies of
the Certificate of Incorporation and By-Laws, or other organizational
documents, of such Credit Party and the resolutions of such Credit Party
referred to in such certificate and all of the fore-
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going (including each such Certificate of Incorporation and By-Laws) shall
be reasonably satisfactory to the Agent.
(ii) On the Closing Date, all corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated
by this Credit Agreement and the other Transaction Documents shall be
reasonably satisfactory in form and substance to the Agent, and the Agent
shall have received all information and copies of all certificates,
documents and papers, including good standing certificates and any other
records of corporate proceedings and governmental approvals, if any, which
the Agent reasonably may have requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
(o) PLANS; COLLECTIVE BARGAINING AGREEMENTS; EXISTING INDEBTEDNESS
AGREEMENTS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT AGREEMENTS; EMPLOYMENT
AGREEMENTS; TAX SHARING AGREEMENTS; MATERIAL CONTRACTS. On or prior to the
Closing Date, there shall have been delivered or made available to the
Agent true and correct copies, of:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan", as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans", as defined in
Section 3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees
of Holdings, the Borrower or any of their respective Subsidiaries or
any ERISA Affiliate (provided that the foregoing shall apply in the
case of any "multiemployer plan", as defined in 4001(a)(3) of ERISA,
only to the extent that any document described therein is in the
possession of Holdings, the Borrower or any of their respective
Subsidiaries or any ERISA Affiliate or reasonably available thereto
from the sponsor or trustee of any such plan), and any recent
actuarial analysis prepared in connection with any of the foregoing;
(ii) all collective bargaining agreements or any other similar
agreement or arrangements covering the employees of Holdings, the
Borrower or any of their respective Subsidiaries (collectively, the
"Collective Bargaining Agreements");
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(iii) all agreements evidencing or relating to any Existing
Indebtedness in an aggregate amount in excess of $1,000,000
(collectively, the "Existing Indebtedness Agreements");
(iv) all agreements entered into by Holdings, the Borrower or any
of their respective Subsidiaries (x) governing the terms and relative
rights of such entity's capital stock or (y) with any shareholders
relating to such entity with respect to their capital stock
(collectively, the "Shareholders' Agreements");
(v) any material agreements (or the forms thereof) with members
of, or with respect to, the management of Holdings, the Borrower or
any of their respective Subsidiaries (collectively the "Management
Agreements");
(vi) any employment agreements (or the forms thereof together
with a list of employees who are parties to such agreements) entered
into by Holdings, the Borrower or any of their respective Subsidiaries
(collectively, the "Employment Agreements");
(vii) any tax sharing, tax allocation and other similar
agreement entered into by Holdings, the Borrower or any of their
respective Subsidiaries (collectively, as amended from time to time in
accordance with the requirements of this Agreement, the "Tax Sharing
Agreements"); and
(viii) any other Material Contracts;
all of which documents relating to the Plans, Collective Bargaining
Agreements, Existing Indebtedness Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements, Tax Sharing Agreements and
Material Contracts shall be in the form and substance reasonably
satisfactory to the Agent and shall, except as contemplated by the Credit
Documents or the Transaction Documents, be in full force and effect on the
Closing Date.
(p) SOLVENCY CERTIFICATE. On or prior to the Closing Date, the
Lenders shall have received a solvency certificate from the chief financial
officer of Holdings in form and substance reasonably acceptable to the
Agent stating the conclusions that, after giving effect to the Transaction
and the incurrence of all the financing contemplated thereby, the Borrower
and the Borrower and its Subsidiaries taken as a whole are not insolvent
and will not be rendered insolvent by the indebtedness incurred in
connection therewith, and will not be left with
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unreasonably small capital with which to engage in its or their businesses
and will not have incurred debts beyond its or their ability to pay such
debts as they mature.
(q) PROJECTIONS; ETC. On or prior to the Closing Date, the Lenders
shall have received detailed annual five-year financial projections
(monthly for the first year and annually thereafter) (including details as
to rental rates, utilization rates, fleet capital expenditures and cost per
unit assumptions and corresponding balance sheets, statements of operations
and cash flow and changes in shareholders' equity) of Holdings and its
Subsidiaries after giving effect to the Transaction in form and substance
reasonably satisfactory to the Agent (together with those projections
heretofore provided to the Lenders, the "Projections").
(r) INSURANCE POLICIES. On or prior to the Closing Date, the Agent
shall have received (i) evidence of insurance coverage (including, without
limitation, certificates of insurance) for the business and properties of
Holdings, the Borrower and their respective Subsidiaries showing compliance
with the requirements of Section 7.10 and (ii) endorsements, (x) naming the
Agent as loss payee with respect to all casualty coverages and containing
other customary loss payable provisions and (y) naming the Agent as
additional insured for all general liability coverages, all in form and
substance reasonably satisfactory to the Agent.
(s) CONSENT LETTER. On or prior to the Closing Date, the Agent shall
have received a letter from CT Corporation System, substantially in the
form of Exhibit I hereto, indicating its consent to its appointment by
Holdings, the Borrower, and each other Credit Party as its agent to receive
service of process as specified in Section 11.1 of this Credit Agreement.
(t) PAYMENT OF FEES. On the Closing Date, all costs, fees and
expenses, and all other compensation contemplated by this Credit Agreement
due to the Agent or the Lenders (including, without limitation, reasonable
legal fees and expenses) shall have been paid to the extent due.
(u) COLLATERAL EXAMINATION AND APPRAISAL. On or prior to the Closing
Date, the Lenders shall have received and be satisfied with the results of
(i) a collateral examination report concerning all accounts receivable of
the Borrower and its Subsidiaries and the Rental Equipment, all in form and
substance reasonably satisfactory to the Agent and (ii) a current complete
appraisal analysis (not on a desktop, but on a physical inspection basis)
by a third party and on a valuation basis acceptable to the Agent with
respect to the Rental Equipment.
(v) ENVIRONMENTAL REPORTS. On or prior to the Closing Date, the
Lenders shall have received and be satisfied with the results of a written
environmental and
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hazardous substance report by GaiaTech relating to Holdings, the Borrower
and their respective Subsidiaries (it being understood that a written
report of substantially the same scope and containing substantially the
same information as the report previously provided to the Agent orally by
GaiaTech shall be satisfactory to the Agent).
(w) MANAGEMENT. On the Closing Date, the identity of the Board of
Directors of Holdings and the management of Holdings and the Borrower shall
have been disclosed to the Lenders and they shall be satisfied therewith.
(x) SUBSIDIARIES GUARANTY. On the Closing Date, each of the
Wholly-Owned Domestic Subsidiaries of the Borrower (each a "Subsidiary
Guarantor" and collectively, the "Subsidiary Guarantors") shall have duly
authorized, executed and delivered a Subsidiary Guaranty in the form of
Exhibit J (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Subsidiaries Guaranty")
and the Subsidiaries Guaranty shall be in full force and effect.
(y) PLEDGE AGREEMENT. On the Closing Date, Holdings, the Borrower and
each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Pledge Agreement in the form of Exhibit K (as modified, amended
or supplemented from time to time, the "Pledge Agreement") and shall have
delivered all pledged securities (endorsed in blank in the case of
promissory notes or accompanied by executed and undated stock powers in the
case of capital stock) purported to be pledged thereunder to BTCC, as
pledgee thereunder for the benefit of the secured creditors described
therein.
(z) MORTGAGES; TITLE INSURANCE; SURVEYS; ETC. On the Closing Date,
the Collateral Agent shall have received:
(i) duly authorized, executed, acknowledged, and delivered
mortgages substantially in the form of Exhibit L (as modified,
supplemented or amended from time to time, the "Mortgages"), which
Mortgages shall cover such of the Real Property owned by Holdings, the
Borrower and/or their respective Subsidiaries as shall be designated
as such on Schedule X as a mortgaged property thereunder (each, a
"Mortgaged Property" and, collectively, the "Mortgaged Properties"),
together with evidence that counterparts of the Mortgages have been
delivered to the title insurance company insuring the Lien of the
Mortgages for recording in all places to the extent necessary or, in
the reasonable opinion of the Collateral Agent, desirable to
effectively create a valid and enforceable first priority Lien on each
Mort-
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gaged Property in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Lenders;
(ii) an ALTA Lender's extended coverage policy of mortgage title
insurance covering the Mortgaged Properties, together with all
endorsements reasonably requested by the Collateral Agent relating
thereto issued by First American Title Insurance Company or such other
title insurers reasonably satisfactory to the Collateral Agent (the
"Mortgage Policies") in an amount satisfactory to the Agent and the
Required Lenders assuring the Collateral Agent that each of the
Mortgages on the Mortgaged Properties is a valid and enforceable first
priority mortgage lien on the respective Mortgaged Properties, free
and clear of all defects and encumbrances except Permitted
Encumbrances and such Mortgage Policies shall otherwise be in form and
substance reasonably satisfactory to the Agent and the Required
Lenders and shall include, as appropriate, an endorsement for future
advances under this Credit Agreement and the Notes and for any other
matter that the Collateral Agent in its discretion may reasonably
request, shall not include an exception for mechanics' liens, and
shall provide for affirmative insurance and such reinsurance as the
Collateral Agent in its discretion may reasonably request; and
(iii) a survey, in form and substance (and as of a date)
satisfactory to the Collateral Agent, of each of the Mortgaged
Properties, certified by a licensed professional surveyor reasonably
satisfactory to the Collateral Agent.
(aa) DEPOSIT ACCOUNT AGREEMENT. On the Closing Date, First Trust
National Association on behalf of the holders of Senior Secured Notes,
Mobile Field Office Company, the Unit Subsidiary, the Borrower and B of A,
as the Depositary, shall have entered into one or more Deposit Account
Agreements in the form of Exhibit M (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof (the
"Deposit Account Agreement").
(bb) INTERCREDITOR AGREEMENT. On the Closing Date, the Agent on
behalf of the Lenders, First Trust National Association on behalf of the
holders of Senior Secured Notes and the Borrower shall have entered into an
Intercreditor Agreement in the form of Exhibit N (as modified, amended or
supplemented from time to time in accordance with the terms thereof and
hereof, the "Intercreditor Agreement"), which shall be in full force and
effect.
(cc) BAILEE AGREEMENT. On the Closing Date, the Agent on behalf of
the Lenders, First Trust National Association on behalf of the holders of
Senior Secured
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Notes, the Borrower and First Trust National Association, as Bailee, shall
have entered into a Bailee Agreement in the form of Exhibit O (as modified,
amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Bailee Agreement"), which shall be in full force
and effect.
(dd) CUSTODIAN AGREEMENT. On the Closing Date, the Agent on behalf
of the Lenders, First Trust National Association on behalf of the holders
of Senior Secured Notes, Mobile Field Office Company, the Borrower and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as the Custodians shall have entered
into a Custodian Agreement in the form of Exhibit P (as modified, amended
or supplemented from time to time in accordance with the terms thereof and
hereof, the "Custodian Agreement"), which shall be in full force and
effect.
(ee) CREATION OF UNIT SUBSIDIARY; TRANSFER OF ASSETS THERETO; MASTER
LEASE; ETC. On or prior to the Closing Date, the Borrower shall have
established the Unit Subsidiary as a direct Wholly-Owned Subsidiary of the
Borrower (all of the equity interests in which shall have been pledged, and
delivered for pledge, pursuant to the Pledge Agreement). The Governing
Documents of the Unit Subsidiary shall have been delivered to the Agent and
shall be satisfactory in all respects to the Agent and the Required
Lenders. On or prior to the Closing Date, the Borrower and its other
Subsidiaries shall have transferred all Non-Qualified Units then owned by
the Borrower and its other Subsidiaries to the Unit Subsidiary as a capital
contribution thereto. The Agent and the Lenders shall have received true
and correct copies of all documentation executed in connection with the
transfer of the Non-Qualified Units as required above. On the Closing
Date, the Borrower and the Unit Subsidiary shall have entered into a master
lease agreement (the "Master Lease Agreement"), pursuant to which the
Non-Qualified Units from time to time held by the Unit Subsidiary shall be
leased to the Borrower, all terms and conditions of which Master Lease
shall be satisfactory to the Agent and the Required Lenders. The Unit
Subsidiary may also, on or prior to the Closing Date, enter into a
management agreement with the Borrower (the "Unit Subsidiary Management
Agreement"), so long as all terms and conditions thereof are acceptable to
the Agent and the Required Lenders.
5.2 CONDITIONS TO EACH REVOLVING LOAN AND LETTER OF CREDIT. On the
date of the making of any Revolving Loan or the issuance of any Letter of
Credit, both at the time of making thereof and after giving effect thereto and
to the application of the proceeds therefrom, the following statements shall be
true to the satisfaction of the Agent (and each delivery or deemed delivery of
each Notice of Borrowing and a Letter of Credit Request, and the acceptance by
the Borrower of the proceeds of such Revolving Loans or issuance of such Letter
of Credit, shall constitute a representation and warranty by the Borrower that
on the date of such Revolving Loans or issuance of such Letter of Credit at the
time of
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making thereof and after giving effect thereto and to the application of the
proceeds therefrom, such statements are true):
(a) The representations and warranties contained in this Credit
Agreement and in each other Credit Document are true and correct in all
material respects on and as of the date of such Revolving Loans or issuance
of such Letter of Credit as though made on and as of such date, except to
the extent that such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall have
been true and accurate on and as of such earlier date);
(b) No event has occurred and is continuing, or would result from such
Revolving Loans or the issuance of any Letter of Credit or the application
of the proceeds thereof, which would constitute a Default or an Event of
Default; and
(c) With respect to the issuance of any Letter of Credit, none of the
events set forth in Section 3.1 hereof has occurred and is continuing or
would result from the issuance of such Letter of Credit.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
of the applicable conditions specified above exist as of the date of such Credit
Event. All of the certificates, legal opinions and other documents and papers
referred to in this Section 5, unless otherwise specified, shall be delivered to
the Agent at the location where the closing occurs for the account of each of
the Lenders and, except for the Revolving Notes, in sufficient counterparts or
copies for each of the Lenders and shall be in form and substance as specified
herein or otherwise satisfactory to the Agent.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
Revolving Loans and issue and/or participate in the Letters of Credit provided
for herein, each of Holdings and the Borrower makes the following
representations, warranties and agreements, as to itself and as to each of its
respective Subsidiaries, all of which shall survive the execution and delivery
of this Credit Agreement, the making of the Revolving Loans and the issuance of
the Letters of Credit (with the occurrence of each Credit Event being deemed to
constitute a representation and warranty that the matters specified in this
Article 6 are true and correct in all material respects on and as of the date of
each such Credit Event, unless stated to relate to a specific earlier date, in
which case they will be true and correct as of such earlier date):
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6.1 CORPORATE STATUS. Each Credit Party (i) is a duly organized and
validly existing corporation or limited liability company in good standing under
the laws of the jurisdiction of its organization and has the corporate or
limited liability company power and authority to own its property and assets and
to transact the business in which it is engaged and presently proposes to engage
and (ii) has duly qualified and is authorized to do business and is in good
standing in all jurisdictions where it is required to be so qualified and where
the failure to be so qualified would be reasonably likely to have a Material
Adverse Effect.
6.2 CORPORATE POWER AND AUTHORITY. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors and general equitable
principles (regardless of whether enforcement is sought in equity or at law) and
(ii) federal securities or other laws or regulations or public policy insofar as
they may restrict the enforceability of rights to indemnification.
6.3 NO VIOLATION. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is a party nor compliance
with the terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
violate or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to the
Collateral Documents) result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of such Credit
Party or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to which such Credit
Party or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject or (iii) will violate
any provision of any Governing Document of Holdings, the Borrower or any of
their respective Subsidiaries, except, in the case of clauses (i) and (ii), any
contraventions, conflicts, inconsistencies, breaches and defaults which are not
reasonably likely to adversely affect any Lender or to have a Material Adverse
Effect. In no event shall any Credit Event hereunder conflict or be
inconsistent with or violate or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, the
Senior Unsecured Notes Indenture.
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6.4 LITIGATION. Except for the Disclosed Litigation, there are no
actions, suits or proceedings pending or threatened with respect to (i) any
Credit Document or (ii) Holdings, the Borrower or any of their respective
Subsidiaries that, after giving effect to expected insurance proceeds and
indemnity payments, are reasonably likely to have a Material Adverse Effect.
6.5 USE OF PROCEEDS. (a) The proceeds of all Revolving Loans shall be
utilized to (i) effect the Transaction, (ii) to pay certain fees and expenses
relating thereto and (iii) for general corporate and working capital purposes of
the Borrower and its Subsidiaries, including acquisitions permitted hereunder;
PROVIDED that Outstandings on the Closing Date (and after giving effect to the
consummation of the Transaction and all Credit Events on such date) shall not
exceed the lesser of (x) $135 million and (y) the Borrowing Base on the Closing
Date minus $40 million.
(b) No part of the proceeds of any Revolving Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Revolving
Loan nor the use of the proceeds thereof nor the occurrence of any other Credit
Event will violate or be inconsistent with the provisions of Regulations G, T,
U, or X of the Board of Governors of the Federal Reserve System.
6.6 GOVERNMENTAL APPROVALS. Except for the filing of the Mortgages
and the filing of the financing statements and continuation statements and for
any other filings, registrations or recordings required under the Collateral
Documents or to terminate the security interests and Liens of the Congress
Financial Corporation, as Agent, and the lenders under the Existing Credit
Agreement (all of which have been made or will be made as required), no order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or domestic
governmental or public body or authority, or any subdivision thereof, is
required to authorize or is required in connection with (i) the execution,
delivery and performance by the Credit Parties of the Credit Documents or (ii)
the legality, validity, binding effect or enforceability of any Credit Document
as against each Credit Party thereto.
6.7 INVESTMENT COMPANY ACT. None of Holdings, the Borrower or any of
their respective Subsidiaries is registered, or required to register, as an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
6.8 PUBLIC UTILITY HOLDING COMPANY ACT. None of Holdings, the
Borrower or any of their respective Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary
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company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.9 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of Holdings or
the Borrower in writing to the Agent or any Lender for purposes of or in
connection with this Credit Agreement or any other Credit Document or any
transaction contemplated herein or therein does not, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Holdings
or the Borrower in writing to the Agent or any Lender will not, as of the date
as of which such information is dated or certified, contain any untrue statement
of a material fact or omit to state any material fact necessary to make such
information (taken as a whole) not misleading as of such time, in each case in
light of the circumstances under which such information was provided, it being
understood and agreed that for purposes of this Section 6.9, such factual
information shall not include the Projections and PRO FORMA financial
information.
6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the
Closing Date on a PRO FORMA basis after giving effect to the Transaction and all
Indebtedness incurred, and to be incurred, and Liens created and to be created,
by each Credit Party in connection with this Credit Agreement and by the
Borrower in connection with the Senior Unsecured Notes, (x) the sum of the
assets, at a fair valuation, of the Borrower and its Subsidiaries, taken as a
whole, will exceed their debts, (y) the Borrower and its Subsidiaries, taken as
a whole, will not have incurred nor intend to, or believe that they will, incur
debts beyond their ability to pay such debts as such debts mature and (z) the
Borrower does not have unreasonably small capital with which to conduct its
businesses. For purposes of this Section 6.10(a), "debt" means any reasonably
expected liability on a claim, and "claim" means (i) right to payment whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) The Borrower has furnished to the Lenders the following financial
statements, which have been prepared in accordance with GAAP (except for the
valuation of goodwill and, in the case of the unaudited financial statements
referred to below, for the omission of footnotes and ordinary year end
adjustments) consistently applied throughout the periods involved: (i)
Holdings' consolidated balance sheet as of, and statements of operations,
shareholder's equity and cash flows and consolidating schedules for the fiscal
years ended December 31, 1996, December 31, 1995 and December 31, 1994 audited
by independent certified public accountants, and accompanied by an unqualified
opinion thereof and (ii) unaudited consolidated balance sheets of Holdings and
the Borrower as of, and
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unaudited statements of operations, shareholder's equity and cash flows the
three months ended March 31, 1997 or such other later interim period as may be
available prior to the Closing Date. The PRO FORMA consolidated balance sheet
of the Borrower as of March 31, 1997, a copy of which has heretofore been
furnished to each Lender, presents a good faith estimate of the consolidated PRO
FORMA financial condition of Holdings and its Subsidiaries and the Borrower and
its Subsidiaries (after giving effect to the Transaction and the related
financing thereof) as at the date thereof). Since December 31, 1996, nothing
has occurred which has had or would be reasonably likely to result in a Material
Adverse Effect.
6.11 LOCATIONS OF OFFICES, RECORDS, INVENTORY AND RENTAL EQUIPMENT.
The address of the principal place of business and chief executive office of
each Credit Party as of the date hereof and as of the Closing Date is set forth
on Schedule IV. The books and records of each Credit Party, and all its chattel
paper and records of Accounts and Unit Certificates, are, as of the Closing
Date, maintained exclusively at the respective locations listed on Schedule IV.
As of the Closing Date, there is no jurisdiction (or, with respect to the Rental
Equipment, State) in which any Credit Party has any chattel paper, records of
Account, Rental Equipment (except for Rental Equipment in transit) or Unit
Certificates other than those jurisdictions (or States) identified on Schedule
IV. Schedule IV also contains a complete list of the legal names and addresses
of each facility or warehouse at which Rental Equipment is stored as of the date
hereof and as of the Closing Date. None of the receipts received by the
Borrower from any warehouseman states that the goods covered thereby are to be
delivered to bearer or to the order of a named person other than the Borrower or
to a named person and such named person's assigns.
6.12 FICTITIOUS BUSINESS NAMES. Except as set forth in Schedule V,
none of Holdings, the Borrower or any of their respective Subsidiaries has used
any corporate or fictitious name since May 1, 1992, other than the corporate
name shown on its respective Governing Documents.
6.13 SECURITY INTERESTS. Subject to Sections 11.19 and 11.20, on and
after the Closing Date, each of the Collateral Documents create, as security for
the Obligations, a valid and enforceable perfected security interest in and Lien
on all of the Collateral, superior to and prior to the rights of all third
persons and subject to no other Liens other than Liens (i) securing the Senior
Secured Notes which are subordinate to all Liens created by or pursuant to the
Credit Documents, other than as otherwise permitted under the Collateral
Documents and (ii) permitted by Section 8.2. At all times on or after the
Closing Date, the respective grantor under each Collateral Document shall have
good and marketable title to all the Collateral subject thereto free and clear
of all Liens other than Liens permitted under Section 8.2. No filings or
recordings are required in order to perfect the security interests created under
any Collateral Document except for filings or recordings required pursuant to
the terms of any such Collateral Document.
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6.14 TAX RETURNS AND PAYMENTS. Each of Holdings, the Borrower and
each of their respective Subsidiaries has timely filed or caused to be timely
filed with the appropriate taxing authority, all federal returns and all other
material returns, statements, forms and reports for taxes required to be filed
by or with respect to the income, properties or operations of Holdings, the
Borrower and/or any of their respective Subsidiaries. Such returns accurately
reflect all liability for taxes of Holdings, the Borrower and their respective
Subsidiaries for the periods covered thereby. Each of Holdings, the Borrower
and each of their respective Subsidiaries has paid all material taxes payable by
it other than taxes which are not due, and other than those contested in good
faith and for which adequate reserves have been established in accordance with
GAAP. Except as set forth on Schedule VI, there is no material action, suit,
proceeding, investigation, audit or claim now pending or, to the knowledge of
Holdings or the Borrower, threatened by any authority regarding any taxes
relating to Holdings, the Borrower or any of their respective Subsidiaries. As
of the Closing Date, none of Holdings, the Borrower or any of their respective
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of material taxes of Holdings, the Borrower or any of
their respective Subsidiaries, or is aware of any circumstances that would cause
the taxable years or other taxable periods of Holdings, the Borrower or any of
their respective Subsidiaries not to be subject to the normally applicable
statute of limitations with respect to any material taxes.
6.15 COMPLIANCE WITH ERISA. (i) Schedule VII identifies each Plan;
each Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a Multiemployer Plan is insolvent or in
reorganization; no Plan subject to Title IV of ERISA has an Unfunded Current
Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans subject to Title IV of ERISA,
exceeds $1,000,000; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither the Borrower nor any Subsidiary of the Borrower nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to the Borrower or any
Subsidiary
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of the Borrower or any ERISA Affiliate of incurring a liability to or on account
of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or, to the best knowledge of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate, threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not exceed $1,000,000; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of the Borrower, any
Subsidiary of the Borrower, or any ERISA Affiliate has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA on
the assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan and the Borrower
and its Subsidiaries do not maintain or contribute to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA or any other applicable continuation of coverage laws or
regulations) or any Plan the obligations with respect to which could reasonably
be expected to have a Material Adverse Effect on the ability of the Borrower to
perform its obligations under this Agreement.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither the Borrower nor any of its Subsidiaries has incurred
any obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of the Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
6.16 SUBSIDIARIES. Schedule VIII hereto lists each Subsidiary of the
Borrower, and the direct and indirect ownership interest of the Borrower
therein, in each case existing on the Closing Date. Holdings is the record and
beneficial owner
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of 100% of the capital stock of the Borrower, and the Borrower is the record and
beneficial owner of 100% of the capital stock of the Unit Subsidiary. On the
Closing Date, Holdings has no significant assets or liabilities other than the
Holding Co. Notes and its ownership of the capital stock of the Borrower and any
liabilities directly related thereto, and on such date Holdings owns no other
capital stock of any other Person.
6.17 INTELLECTUAL PROPERTY; ETC. Holdings, the Borrower and each of
their respective Subsidiaries have obtained all material patents, trademarks,
servicemarks, trade names, copyrights, licenses and other rights, free from
burdensome restrictions, that are necessary for the operation of their
respective businesses as presently conducted and as proposed to be conducted.
6.18 COMPLIANCE WITH STATUTES, ETC. (a) Each of Holdings, the
Borrower and their respective Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such instances of
noncompliance as are not reasonably likely to, in the aggregate, have a Material
Adverse Effect.
(b) Each of Holdings, the Borrower and their respective Subsidiaries
is in compliance with all applicable Environmental Laws governing its business
for which failure to comply is likely to have a Material Adverse Effect and none
of Holdings, the Borrower or any of their respective Subsidiaries is liable for
any material penalties, fines or forfeitures for failure to comply with such
Environmental Laws in the manner set forth above. All licenses, permits,
registrations or approvals required for the business of Holdings, the Borrower
and each of their respective Subsidiaries, as conducted as of the Closing Date,
under any Environmental Law have been secured and each of Holdings, the Borrower
and their respective Subsidiaries is in substantial compliance therewith, except
such licenses, permits, registrations or approvals, the failure to secure or to
comply therewith is not reasonably likely to have a Material Adverse Effect.
None of Holdings, the Borrower or any of their respective Subsidiaries is in any
material respect in noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to which Holdings, the
Borrower or any such Subsidiary is a party and which would materially and
adversely affect the ability of Holdings, the Borrower or any such Subsidiary to
operate its business or other Real Property and no event has occurred and is
continuing which, with the passage of time or the giving of notice or both,
would constitute material noncompliance, breach of or default thereunder, except
in each such case, such noncompliance, breaches or defaults as are not
reasonably likely to, in the aggregate, have a Material Adverse Effect. There
are as of the Closing Date no Environmental Claims pending or, to the best
knowledge of the Borrower, threatened, which question the validity, term or
entitlement of Holdings, the Borrower or any of their respective Subsidiaries
for any permit, license, order or registration required for the operation of any
facility which Holdings, the Borrower or any of their respective Subsidiaries
currently operates. There
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are no facts, circumstances, conditions or occurrences concerning the business
or operations of Holdings, the Borrower or any of their respective Subsidiaries,
or any Real Property at any time owned or operated by Holdings, the Borrower or
any of their respective Subsidiaries, or, to the best of their knowledge, on any
property adjoining or adjacent to any such Real Property, that are reasonably
expected (i) to form the basis of a material Environmental Claim against
Holdings, the Borrower or any of their respective Subsidiaries or any currently
owned Real Property of Holdings, the Borrower or any of their respective
Subsidiaries, or (ii) to cause such currently owned Real Property to be subject
to any material restrictions on the ownership, occupancy, use or transferability
of such Real Property under any Environmental Law, except in each such case,
such environmental claims or restrictions that individually, or in the
aggregate, are not reasonably likely to have a Material Adverse Effect.
(c) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, by Holdings, the Borrower or
any of their respective Subsidiaries, any Real Property of Holdings, the
Borrower or any of their respective Subsidiaries or (ii) released or disposed of
on any such Real Property, except Hazardous Materials generated, used, treated
or stored on, or transported to or from, any Real Property of Holdings, the
Borrower or any of their respective Subsidiaries in the ordinary course of
business and in material compliance with Environmental Laws ("Permitted
Materials").
6.19 PROPERTIES. Each of Holdings, the Borrower and their respective
Subsidiaries has good title to all material properties (excluding intellectual
property which is covered in Section 6.17) owned by it free and clear of all
Liens, other than as permitted by Section 8.2. Schedule X contains a true and
complete list of each Real Property owned and leased by Holdings, the Borrower
or their respective Subsidiaries on the Closing Date and the type of interest
therein held by Holdings, the Borrower or such Subsidiary.
6.20 LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENTS. (a) Set forth
on Schedule XI hereto is a list (including dates of termination) of all
Collective Bargaining Agreements in effect on the Closing Date.
(b) None of Holdings, the Borrower nor any of their respective
Subsidiaries is engaged in any unfair labor practice that is likely to have a
Material Adverse Effect. There is (i) no significant unfair labor practice
complaint pending against Holdings, the Borrower or any of their respective
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, before the National Labor Relations Board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is pending on the Closing Date against Holdings, the
Borrower or any of their respective Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them, (ii) no significant strike, labor
dispute, slowdown or
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stoppage is pending against Holdings, the Borrower or any of their respective
Subsidiaries or, to the best knowledge of the Borrower, threatened against
Holdings, the Borrower or any of their respective Subsidiaries, except (with
respect to any matter specified in clause (i) and (ii) above, either
individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect.
6.21 RESTRICTIONS ON SUBSIDIARIES. Except for restrictions contained
in the Credit Documents, the Senior Secured Notes Indenture, the Holding Co.
Notes Indenture, the Senior Unsecured Note Documents and in agreements with
respect to the Existing Indebtedness, as of the Closing Date there are no
contractual or consensual restrictions on the Borrower or any of its
Subsidiaries which prohibit or otherwise restrict (i) the transfer of cash or
other assets (x) between the Borrower and any of its Subsidiaries or (y) between
any Subsidiaries of the Borrower or (ii) the ability of the Borrower or any of
its Subsidiaries to grant security interests to the Lenders in the Collateral.
6.22 STATUS OF ACCOUNTS. Each Account is based on an actual and bona
fide lease or sale and delivery of goods (including Rental Equipment) or
rendition of services to customers, made by the Borrower and its Subsidiaries in
the ordinary course of its business; the goods, Inventory and Rental Equipment
being sold or leased and the Accounts created are its property and are not and
shall not be subject to any Lien, consignment arrangement, encumbrance, security
interest or financing statement whatsoever other than the Liens created pursuant
to the Collateral Documents and Permitted Liens, and, except as otherwise
reported or reserved against on the Borrower's or its Subsidiaries books and
records or to the extent excluded from the Borrowing Base, the Borrower's and
its Subsidiaries' customers have accepted the goods or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without any dispute, offset, defense, or counterclaim.
6.23 MATERIAL CONTRACTS. Neither Holdings, the Borrower, nor any of
their respective Subsidiaries is in breach of or in default under any Material
Contract.
6.24 EXISTING INDEBTEDNESS AND OPERATING LEASES. Schedule III sets
forth a true and complete list of all Existing Indebtedness (excluding any
existing Indebtedness with an aggregate principal amount then outstanding of
less than $1,000,000, so long as the aggregate principal amount of outstanding
Existing Indebtedness excluded pursuant to this parenthetical does not exceed
$4,000,000) and Operating Leases of Holdings, the Borrower and their respective
Subsidiaries as of the Closing Date, in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any other
entity which directly or indirectly guaranteed such debt.
6.25 REPRESENTATIONS AND WARRANTIES IN RECAPITALIZATION AGREEMENT.
All representations and warranties by Holdings, the Borrower and their
respective Subsidiaries
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set forth in the Recapitalization Agreement were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made) and shall be true and correct in all material
respects as of the Closing Date as if such representations or warranties were
made on and as of such date, unless stated to relate to a specific earlier date,
in which case such representations or warranties shall be true and correct in
all material respects as of such earlier date.
6.26 GUARANTEE OF SENIOR SECURED NOTES. No Subsidiary of the Borrower
has guaranteed, or furnished security for, the Senior Secured Notes other than
the Subsidiary Guarantors.
6.27 CUSTODIANS. Each of the Custodians under the Custodian Agreement
is an employee of the Borrower in good standing.
ARTICLE 7.
AFFIRMATIVE COVENANTS
Subject to Sections 11.19 and 11.20, each of Holdings and the Borrower
hereby covenants and agrees that on the Closing Date and thereafter, for so long
as this Credit Agreement is in effect and until the Total Commitments have
terminated, no Letters of Credit or Revolving Notes are outstanding and the
Revolving Loans and Letter of Credit Obligations, together with interest, Fees,
Expenses and all other Obligations then due and payable, are paid in full:
7.1 FINANCIAL INFORMATION. The Borrower shall furnish to the Lenders
the following information within the following time periods:
(a) as soon as available and in any event within 90 days (or 120 days
in the case of the item described in clause (B) below only) after the end
of each fiscal year of Holdings or the Borrower, as applicable, (i) audited
Financial Statements as of the close of such fiscal year and for such
fiscal year, together with a comparison to the Financial Statements for the
prior year, in each case accompanied by (A) a report thereon of the
Auditors thereof unqualified as to scope, which report shall state that
such consolidated financial statements fairly present the consolidated
financial position of Holdings and its consolidated Subsidiaries and the
Borrower and its consolidated Subsidiaries, as applicable, as at the date
indicated and the results of their operations and cash flows for the
periods indicated in conformity with GAAP (except as otherwise stated
therein) and that the examination by such Auditors has been made in
accordance with generally accepted auditing standards, (B) such Auditors'
management letter to Holdings or the Borrower, as the case may
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be, (C) a written statement signed by the Auditors stating that in the
course of the annual audit of the business of Holdings and its consolidated
Subsidiaries or the Borrower and its consolidated Subsidiaries, as
applicable, which audit was conducted by the Auditors in accordance with
generally accepted auditing standards, such Auditors (x) have not obtained
any knowledge of the existence of any Default or Event of Default under any
provision of Sections 8.4, 8.9, 8.10, 8.11, and 8.18 of this Credit
Agreement, or, if such Auditors shall have obtained from such examination
any such knowledge, they shall disclose in such written statement the
existence of the Default or Event of Default and the nature thereof, it
being understood that such Auditors shall not be required hereunder to
perform any special audit procedures and shall have no liability, directly
or indirectly, to anyone for failure to obtain knowledge of any such
Default or Event of Default and (ii) in the case of the Financial
Statements of Holdings, a compliance certificate signed by its chief
executive officer, chief financial officer, treasurer or controller
substantially in the form of Exhibit Q along with a schedule in form
satisfactory to the Agent of the calculations used in determining, as of
the end of such fiscal year, whether the Borrower was in compliance with
the covenants set forth in Articles 7 and 8 of this Credit Agreement for
such year. To the extent that Holdings' or the Borrower's, as the case may
be, annual report on Form 10-K contains any of the foregoing items, the
Lenders will accept Holdings' or the Borrower's, as the case may be, report
on Form 10-K in lieu of such items;
(b) as soon as available and in any event within 45 days after the end
of each fiscal quarter of Holdings or the Borrower, as applicable, (except
the last fiscal quarter of any fiscal year) (i) Financial Statements as at
the end of such period and for the fiscal year to date, together with a
comparison to the Financial Statements for the same periods in the prior
year, all in reasonable detail and duly certified by the chief executive
officer, chief financial officer, treasurer or controller of Holdings or
the Borrower, as applicable, as having been prepared substantially in
accordance with GAAP (subject to the absence of footnotes and audit and
normal year-end adjustments) and (ii) in the case of the Financial
Statements of Holdings, a compliance certificate signed by its chief
executive officer, chief financial officer, treasurer or controller
substantially in the form of Exhibit Q along with a schedule in form
satisfactory to the Agent of the calculations used in determining, as of
the end of such fiscal quarter, whether the Borrower was in compliance with
the covenants set forth in Articles 7 and 8 of this Credit Agreement for
such quarter. To the extent that Holdings' or the Borrower's, as the case
may be, quarterly report on Form 10-Q contains any of the foregoing items,
the Lenders will accept Holdings' or the Borrower's, as the case may be,
report on Form 10-Q in lieu of such items;
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(c) as soon as available and in any event within 30 days after the end
of each month (except the last month of any fiscal quarter, with respect to
which such reports shall be delivered within 45 days after the end of the
month (other than the last quarter of the fiscal year, with respect to
which such reports shall be delivered within 90 days after the end of the
month)), a consolidated balance sheet for the Borrower and its consolidated
Subsidiaries as at the end of such month and consolidated statements of
operations and cash flows for such month and for the fiscal year to date,
together with a comparison to the consolidated balance sheet, statement of
operations and statement of cash flows for the same periods in the prior
year, all in reasonable detail and duly certified (subject to the addition
of footnotes and audit and normal year-end adjustments) by the chief
executive officer, chief financial officer, treasurer or controller of the
Borrower as having been prepared substantially in accordance with GAAP;
(d) not later than 60 days after the commencement of each fiscal year
commencing with the fiscal year ending December 31, 1997, monthly
consolidated projections (in substantially the same form as the
Projections) for the Borrower and its Subsidiaries for the following fiscal
year and annual projections for each subsequent fiscal year through and
including the fiscal year in which the Expiration Date occurs;
(e) upon request by the Agent at any time if a Default or Event of
Default shall exist and in any event not later than 12:00 Noon New York
time within 35 days after the last Business Day of each month (or more
frequently if requested by the Agent in the exercise of its Permitted
Discretion), a Borrowing Base certificate (the "Borrowing Base
Certificate") in substantially the form of Exhibit R, duly completed, as of
the last day of such month (or such other date as the Agent may specify in
such request) and certified by the Borrower's chief executive officer,
chief financial officer, treasurer or controller and subject only to
adjustment upon completion of the normal year-end audit. In addition, each
Borrowing Base Certificate shall have attached to it such additional
schedules and/or other information, including monthly aging reports, as the
Agent may reasonably request;
(f) as soon as possible after the end of each calendar month, but in
any event not later than 30 days after the end of such month (or more
frequently as the Agent may reasonably request), (A) a certificate setting
forth the Average Rental Rate (excluding Sales-Type Leases), (B) a
certificate setting forth the Average Lease Term and the detail of the
calculation thereof as of the last day of the immediately preceding fiscal
month, (C) a listing of each Lease which has been terminated or as to which
a notice of termination has been received from or sent to the account
debtor and each new Lease entered into by Borrower or any of its
Subsidiaries during the immediately preceding month setting forth on such
listing the name of
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each such account debtor, the date of each such Lease, the amount of the
contractual monthly rental and the fixed minimum term thereof, (D) a
listing of the units of Rental Equipment at the branch office locations of
Borrower and each of its Subsidiaries, indicating the units of Rental
Equipment at each branch office location as of the end of the immediately
preceding month, (E) the Utilization as of the end of the immediately
preceding month and the average Utilization for the 13 months then last
ended (calculated by taking the average of the Utilization for each of such
13 months then last ended), and (F) the average age of all Rental Equipment
not constituting storage units (taken as a whole) and the average age of
all Rental Equipment constituting storage units (taken as a whole), in each
case as of the end of the immediately preceding month;
(g) as soon as possible after the end of the second and fourth fiscal
quarters of the Borrower, but in any event not later than the 30th day
following the end of the second and fourth fiscal quarters of the Borrower,
a listing of each Lease (by account debtor name, the number of units of
Rental Equipment and location) in effect as of the last day of the
preceding fiscal quarter indicating the number of units of Rental Equipment
subject to such Lease and the location of such Rental Equipment;
(h) promptly and in any event within five Business Days after becoming
aware of the occurrence of a Default or Event of Default, a certificate of
the chief executive officer or chief financial officer of the Borrower
specifying the nature thereof and the Borrower's proposed response thereto,
each in reasonable detail;
(i) within 30 days after the end of each month (except the last month
of any fiscal quarter, with respect to which such reports shall be
delivered within 45 days after the end of the month (other than the last
quarter of the fiscal year with respect to which such reports shall be
delivered within 90 days after the end of the month)), a comparison of
consolidated actual results of operations, cash flow and Capital
Expenditures for the Borrower and their respective Subsidiaries for such
month and for the period from the beginning of the current fiscal year
through the end of such month (i) with amounts projected for such month and
for the period from the beginning of the current fiscal year through the
end of such month pursuant to the projections delivered pursuant to Section
5.1(q) or, in the case of any fiscal year commencing after the delivery of
projections pursuant to Section 7.1(d) above, the most recent projections
delivered pursuant to Section 7.1(d);
(j) promptly upon the earlier of the mailing or filing thereof, copies
of all ▇▇-▇▇, ▇▇-▇▇, ▇-▇▇, proxy statements, annual reports, quarterly
reports, registration statements and any other filings or other
communications made by either of Holdings or the Borrower to holders of its
publicly traded securities or the
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Securities Exchange Commission from time to time pursuant to the Securities
Exchange Act of 1934, as amended, or the Securities Act of 1933, as
amended;
(k) promptly and in any event after becoming aware of the occurrence
of any of the following events the Borrower will provide the Agent with
notice of such event (and copies of relevant documents if requested):
(i) any Material Contract of Holdings, the Borrower or any of
their respective Subsidiaries is terminated or amended or any new
Material Contract is entered into which is reasonably likely to have
an adverse effect on the Lenders (in which event the Borrower shall
provide the Agent with a copy of such Material Contract); or
(ii) any of the material terms (other than price) upon which
material suppliers of the Borrower or any of its Subsidiaries do
business with the Borrower or such Subsidiary are changed or amended
the results of which are reasonably likely to have an adverse effect
on the Lenders; or
(iii) any order, judgment or decree in excess of $1,000,000
(after reasonably expected insurance and indemnity recovery) shall
have been entered against Holdings, the Borrower or any of their
respective Subsidiaries or any of their respective properties or
assets; or
(iv) any notification of violation of any Requirement of Law
shall have been received by Holdings, the Borrower or any of their
respective Subsidiaries from any Governmental Authority the results of
which are likely to have a Material Adverse Effect;
(l) within 60 days after the end of each fiscal year of Holdings an
update on a desk top basis of the appraisal delivered pursuant to Section
5.1(u)(ii) by a third party and on a valuation basis acceptable to the
Agent, PROVIDED that, (I) if a Default or an Event of Default has occurred
and is continuing, or (II) (x) in the event that the gross book value of
Rental Equipment constituting storage units is less than 10% of the gross
book value of all Rental Equipment at the time the certificate required by
clause (f) above is required to be delivered, (A) the average age of all
Rental Equipment not constituting storage units (taken as a whole) shall,
at such time, have increased, or (B) the Average Rental Rate for all Rental
Equipment not constituting storage units shall, at such time, have
decreased and (y) in the event that the gross book value of Rental
Equipment constituting storage units is greater than or equal to 10% of the
gross book value of all Rental Equipment at such time, (i) the average age
of (1) all Rental Equipment constituting storage units (taken as a whole)
or (2) all Rental Equipment not constituting storage units (taken
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as a whole), shall, at such time, have increased or (ii) the Average Rental
Rate of (1) all Rental Equipment constituting storage units or (2) all
Rental Equipment not constituting storage equipment shall, at such time,
have decreased, in the case of any of clauses (x) or (y), more than 20%
from levels reported in or as of the last appraisal, the Agent shall be
permitted to request an update on a physical inspection basis at any time;
(m) at the request of the Agent (but, so long as no Default or Event
of Default has occurred and is continuing, in no event more frequently than
semi-annually), an update of the collateral examination report delivered to
the Lenders pursuant to Section 5.1(u)(i) in form and substance reasonably
satisfactory to the Agent; and
(n) from time to time, such further information, including customer
address list, regarding the Collateral, business affairs and financial
condition of Holdings, the Borrower and/or each of their respective
Subsidiaries as the Agent may reasonably request.
7.2 REAL ESTATE APPRAISALS. In the event that the Agent or the
Required Lenders at any time after the Effective Date determine in its or their
good faith discretion (as a result of events or circumstances affecting the
Agent or the Required Lenders after the Effective Date) that real estate
appraisals satisfying the requirements set forth in 12 C.F.R., Part 34-Subpart
C, or any successor or similar statute, rule, regulation, guideline or order
(any such appraisal a "Required Appraisal") are or were required to be obtained,
or should be obtained, in connection with any Mortgaged Property or Mortgaged
Properties, then, within 120 days after receiving written notice thereof from
the Agent or the Required Lenders, as the case may be, such Required Appraisals
shall be delivered, at the expense of the Borrower, to the Agent, which Required
Appraisals, and the respective appraiser, shall be satisfactory to the Agent.
7.3 CORPORATE FRANCHISES. Holdings and the Borrower will, and will
cause each of their respective Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence,
material rights and authority to do business, provided that (i) the Mobile Field
Office Liquidation and (ii) any other transaction permitted by Section 8.1 will
not constitute a breach of this Section 7.3, and provided further that Holdings
shall not be required to preserve, with respect to itself, any material right or
authority to do business and with respect to the Borrower, any of the Borrower's
Subsidiaries, or any of Holdings' Subsidiaries, any such existence, material
right or authority to do business if Holdings shall reasonably determine that
such preservation is no longer desirable in the ordinary course of business, and
the loss thereof shall not be reasonably likely to have a Material Adverse
Effect.
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7.4 COMPLIANCE WITH STATUTES, ETC. (a) Holdings and the Borrower will,
and will cause each of their respective Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
Environmental Laws) except to the extent non-compliance (individually or in the
aggregate) would not reasonably be expected to have a Material Adverse Effect.
None of Holdings, the Borrower or any of their respective Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any of
its Real Property, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, except to the extent the failure to
comply with the foregoing requirements, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. If required
to do so under any applicable Environmental Law, Holdings and the Borrower agree
to undertake, and agree to cause each of their respective Subsidiaries to
undertake, any cleanup, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property in accordance with,
in all material respects, the requirements of all such applicable Environmental
Laws and in accordance with, in all material respects, all applicable orders and
directives of all governmental authorities; PROVIDED that none of Holdings, the
Borrower or any of their respective Subsidiaries shall be required to take any
such action where same is being contested by appropriate legal proceedings in
good faith by Holdings, the Borrower or such Subsidiary.
(b) At the request of the Agent or the Required Lenders at any time
and from time to time when an Event of Default has occurred and is continuing,
but in any event no more frequently than once a year, the Borrower will provide,
at the Borrower's sole cost and expense, an environmental site assessment report
or update concerning any Real Property of Holdings, the Borrower or any of their
respective Subsidiaries, prepared by an environmental consulting firm reasonably
acceptable to the Agent, indicating the presence or release of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with any Hazardous Materials on such Real Property; PROVIDED, HOWEVER, no such
request may be made unless the Agent or the Required Lenders reasonably believe
that (i) Holdings, the Borrower or any of their respective Subsidiaries is in
material noncompliance with any Environmental Law with respect to such Real
Property and such noncompliance is reasonably likely to result in a liability of
the Borrower in excess of $1,000,000 (after expected insurance and indemnity
recovery) in the aggregate or (ii) an Event of Default is in existence. If the
Borrower fails to provide the same after 60 days' written notice, the Agent may
order the same, and Holdings and/or the Borrower shall grant and hereby grants
to the Agent and the Lenders and their agents access to such Real Property at
all reasonable times and without unreasonably interfering with the Borrower's
operations and specifically grants the Agent and the Lenders an irrevocable
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nonexclusive license, subject to the rights of tenants, to undertake such an
assessment all at the Borrower's sole expense.
7.5 ERISA. As soon as possible and, in any event, within twenty days
after Holdings, the Borrower, any of their respective Subsidiaries or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
the Borrower will deliver to the Agent a certificate of the chief financial
officer of the Borrower setting forth the full details as to such occurrence and
the action, if any, that Holdings, the Borrower, such Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by Holdings, the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred
(except to the extent that the Borrower has previously delivered to the Lenders
a certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following thirty days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan or Foreign
Pension Plan has not been timely made; that a Plan has been or may be reasonably
expected to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA; that a Plan subject to Title IV of ERISA has an Unfunded
Current Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans subject to Title IV of ERISA,
exceeds the aggregate amount of such Unfunded Current Liabilities that existed
on the Closing Date by $250,000; that proceedings may be or have been instituted
to terminate a Plan or appoint a trustee to administer a Plan which is subject
to Title IV of ERISA; that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Plan; that Holdings, the
Borrower, any of their respective Subsidiaries or any ERISA Affiliate will or
may be reasonably expected to incur any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that
Holdings, the Borrower or any of their respective Subsidiaries may be reasonably
expected to incur any material liability pursuant to any employee welfare
benefit plan (as
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defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA or any
other applicable continuation of coverage laws or regulations) or any Plan or
any Foreign Pension Plan in addition to the liability that existed on the
Effective Date to any such plan or plans. The Borrower will deliver to each of
the Lenders (i) a complete copy of the annual report (on Internal Revenue
Service Form 5500-series) of each Plan (including, to the extent required, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed with
the Internal Revenue Service and (ii) copies of any material records, documents
or other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. In addition to any certificates or notices
delivered to the Lenders pursuant to the first sentence hereof, copies of annual
reports and any records, documents or other information required to be furnished
to the PBGC, and any material notices received by Holdings, the Borrower, any of
their respective Subsidiaries or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Lenders no later than ten days
after the date such annual report has been filed with the Internal Revenue
Service or such records, documents and/or information has been furnished to the
PBGC or such notice has been received by Holdings, the Borrower, such Subsidiary
or the ERISA Affiliate, as applicable.
7.6 GOOD REPAIR. Each of Holdings and the Borrower will, and will
cause each of their respective Subsidiaries to, use its best efforts to provide
that its material properties and equipment used or useful in its business
(including Rental Equipment) in whomsoever's possession they may be, are kept in
good repair, working order and condition, normal wear and tear excepted and,
subject to Section 8.4, that from time to time there are made in such properties
and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto.
7.7 BOOKS AND RECORDS. Each of Holdings and the Borrower agree to
maintain, and to cause each of their respective Subsidiaries to maintain, books
and records pertaining to the Collateral in such detail, form and scope as is
consistent with good business practice, and agrees that such books and records
will reflect the Lenders' interest in its Accounts. Holdings and the Borrower
agree that the Collateral Agent or its agents may enter upon the premises of
Holdings, the Borrower or any of their respective Subsidiaries at any time and
from time to time, during normal business hours and upon reasonable notice under
the circumstances, and at any time at all during the continuance of an Event of
Default, for the purposes of (i) inspecting the Collateral, (ii) inspecting
and/or copying (at the Borrower's expense) any and all records pertaining
thereto, (iii) discussing the affairs, finances and business of Holdings or the
Borrower with any officers, employees and directors of Holdings or the Borrower
or with Auditors (it being understood that Holdings or the Borrower shall be
entitled to have a representative present at any such discussions) and (iv)
verifying Eligible Accounts Receivable and/or Eligible Rental
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Equipment. The Borrower shall give the Collateral Agent fifteen days prior
written notice of any change in the location of any facility owned or leased by
Holdings or the Borrower or any of their respective Subsidiaries where
Collateral is located or in the location of its chief executive office or place
of business from the locations specified in Schedule IV, and to execute in
advance of such change, cause to be filed and/or delivered to the Collateral
Agent any financing statements, Collateral Access Agreements or other documents
required by the Agent, all in form and substance reasonably satisfactory to the
Agent. The Borrower agrees to advise the Agent promptly, in sufficient detail,
of any substantial change relating to the type, quantity or quality of more than
10% (measured by net book value) of the Collateral, or any event (other than a
change in price) which could have a material adverse effect on the value of more
than 10% (measured by net book value) of the Collateral or on the security
interests granted to the Collateral Agent, on behalf of the Lenders therein.
7.8 COLLATERAL RECORDS. Each of Holdings and the Borrower agree to
execute and deliver, and to cause each of their respective Subsidiaries to
execute and deliver, to the Collateral Agent, from time to time, solely for the
Agent's convenience in maintaining a record of the Collateral, such written
statements and schedules as the Collateral Agent may reasonably require,
including, without limitation, those described in Section 7.1 of this Credit
Agreement, designating, identifying or describing the Collateral pledged or
granted to the Lenders under the Collateral Documents. The failure by Holdings,
the Borrower or any of their respective Subsidiaries, however, to promptly give
the Agent such statements or schedules shall not affect, diminish, modify or
otherwise limit the Lenders' security interests in the Collateral.
7.9 SECURITY INTERESTS. Each of Holdings and the Borrower shall, and
shall cause each of their respective Subsidiaries to, defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein other than claims or demands pursuant to the Credit
Documents and subject to the terms of Intercreditor Agreement, the Bailee
Agreement, the Custodian Agreement and the Senior Secured Notes Collateral
Documents. Subject to Sections 11.19 and 11.20, Holdings and the Borrower shall
comply, and shall cause each of their respective Subsidiaries to comply, with
the requirements of all state and federal laws in order to grant to the Lenders
valid and perfected first priority security interests in the Collateral, subject
to Existing Liens and to any other Permitted Liens which pursuant to operation
of law are prior to the perfected security interests created hereunder. The
Collateral Agent is hereby authorized by Holdings and the Borrower to file any
UCC financing statements covering the Collateral whether or not the signatures
of Holdings or the Borrower appears thereon.
7.10 INSURANCE; CASUALTY LOSS. Schedule XII hereto sets forth a true
and complete listing of all insurance maintained by Holdings, the Borrower and
each of their respective Subsidiaries as of the Closing Date. Holdings and the
Borrower agree to maintain, and to cause each of their respective Subsidiaries
to maintain, public liability
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insurance, third party property damage insurance and replacement value (or such
higher coverage as Holdings may obtain) insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and
covering such risks in at least such amounts and against at least such risks as
are described on Schedule XII or, with respect to any lesser coverages (whether
as to the amount or scope of coverage), as are at all times satisfactory to the
Agent in its commercially reasonable judgment. All policies covering the
Collateral are to name the Collateral Agent as an additional insured and the
Collateral Agent as loss payee in case of loss, as its interests may appear, and
are to contain such other provisions as the Agent may reasonably require to
fully protect the Lenders' interest in the Collateral and to any payments to be
made under such policies. The Borrower shall provide written notice to the
Agent of the occurrence of any of the following events within ten Business Days
after the occurrence of such event: any Collateral is (i) damaged or destroyed,
or suffers any other loss, or (ii) condemned, confiscated or otherwise taken, in
whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such Collateral or to materially
diminish its marketability, and in either case either (x) a Default or an Event
of Default has occurred and is continuing or (y) the amount of the damage,
destruction, loss or diminution in value is in excess of $2,000,000
(collectively, a "Casualty Loss"); provided that no notice shall be required in
the event that (x) no Default or Event of Default has occurred and is continuing
and (y) the amount of the damage, destruction, loss or diminution in value is
less than or equal to $2 million in which case, the Borrower may, in its sole
discretion, either apply such amounts (x) to the payment of the outstanding
Revolving Loans or (y) to purchase other assets of the same or similar type as
those for which the Borrower received such insurance proceeds. Holdings, the
Borrower and/or the respective Subsidiary shall diligently file and prosecute
their claim or claims for any award or payment in connection with a Casualty
Loss. In the event of a Casualty Loss, Holdings shall pay to the Collateral
Agent, promptly upon receipt thereof, any and all net insurance proceeds and
payments received by Holdings, the Borrower or any of their respective
Subsidiaries on account of damage, destruction, loss, condemnation or eminent
domain proceedings, whereupon the Collateral Agent shall, at the election of the
Borrower (unless a Default or Event of Default shall have occurred and be
continuing in which case such election shall be made by the Required Lenders, in
their sole discretion), either (a) apply the proceeds realized from Casualty
Losses to payment of accrued and unpaid interest or outstanding principal under
the Revolving Loans or (b) pay such proceeds to Holdings or the Borrower to be
used to repair or replace the Collateral that was the subject of the Casualty
Loss. After the occurrence and during the continuance of an Event of Default,
(i) no settlement on account of any such Casualty Loss shall be made without the
consent of the Collateral Agent and (ii) the Collateral Agent may participate in
any such proceedings and the Borrower shall deliver to the Collateral Agent such
documents as may be requested by the Collateral Agent to permit such
participation and shall consult with the Collateral Agent, its attorneys and
agents in the making and prosecution of such claim or claims. Each of Holdings
and the Borrower hereby irrevocably authorizes and appoints the
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Collateral Agent its attorney-in-fact, after the occurrence and during the
continuance of an Event of Default, to collect and receive for any such award or
payment and to file and prosecute such claim or claims, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest, and
each of Holdings and the Borrower shall, upon demand of the Collateral Agent,
make, execute and deliver any and all assignments and other instruments
sufficient for the purpose of assigning any such award or payment to the
Collateral Agent for the benefit of the Lenders, free and clear of any
encumbrances of any kind or nature whatsoever, other than the right of Holdings
or the Borrower to any insurance proceeds remaining after application thereof by
the Collateral Agent as provided in this Section 7.10.
7.11 TAXES. Holdings and the Borrower will, and will cause each of
their respective Subsidiaries to, pay and discharge all federal income and other
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any properties belonging to it, or
payable by it pursuant to the Tax Sharing Agreements, in each case on a timely
basis, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of Holdings, the Borrower or of any of their respective
Subsidiaries; PROVIDED, that neither Holdings, the Borrower nor any of their
respective Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith judgment
of the management of such Person) with respect thereto in accordance with GAAP.
7.12 END OF FISCAL YEARS; FISCAL QUARTERS. Each of Holdings and the
Borrower will, for financial reporting purposes, cause (i) each of their, and
each of their respective Subsidiaries', fiscal years to end on December 31 of
each year and (ii) each of their and each of their respective Subsidiaries',
fiscal quarters to end on dates consistent therewith.
7.13 FURTHER ASSURANCES. Holdings and the Borrower shall take, and
shall cause each of their respective Subsidiaries to take, all such further
actions and execute all such further documents and instruments as the Collateral
Agent may at any time reasonably determine to be necessary or desirable to
further carry out and consummate the transactions contemplated by the Credit
Documents, to cause the execution, delivery and performance of the Credit
Documents to be duly authorized and to perfect or protect the Liens (and the
priority status thereof) of the Collateral Agent on the Collateral including,
without limitation, (i) filing notices of liens, UCC financing statements and
amendments, renewals and continuations thereof, (ii) obtaining, providing or
making notations of security interests upon Unit Certificates, (iii) cooperating
with the Collateral Agent's representatives, keeping stock records, obtaining
waivers from landlords and from warehousemen and their landlords, (iv) paying
claims which might, if unpaid, become a Lien on the Collateral other than a
Permitted Lien and (v) stamping all Certificates (as defined in the Custodian
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Agreement) relating to the Non-Qualified Units (x) with a legend as required by
the Custodian Agreement and (y) to indicate the transfer of the ownership
thereof to the Unit Subsidiary. Furthermore, Holdings and the Borrower shall
cause to be delivered to the Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by the
Collateral Agent to assure itself that this Section 7.13 has been complied with.
Notwithstanding anything to the contrary contained in this Section 7.13, the
Collateral Agent shall not (except in the circumstances described in the second
and third sentences of Section 11.19) request that the Borrower obtain or
provide any Unit Certificates with respect to any Non-Qualified Units unless an
Event of Default has occurred and is continuing; provided that if any Unit
Certificates are obtained, a notation of the Collateral Agent's security
interest shall be made thereon as required by Section 7.18(b). All actions
required to be taken pursuant to this Section 7.13, as well as pursuant to
Sections 11.19 and 11.20, shall be at the cost and expense of the Borrower.
7.14 MAINTENANCE OF SEPARATENESS. Each Credit Party will, and will
cause each of its Subsidiaries to, satisfy customary corporate and
organizational formalities, including the holding of regular board of directors'
and shareholders' meetings or action by directors or shareholders without a
meeting and the maintenance of corporate offices and records. Not later than
the 90th day following the Closing Date, the Credit Parties shall take all
actions as may be required (x) to establish and maintain an executive committee
for the Unit Subsidiary and (y) so that at least one member of the executive
committee is not and, during the one-year period immediately preceding the time
of initial appointment, was not an employee, officer, director, shareholder, or
partner of the Borrower or any of its Affiliates. In dealing with their
respective creditors, none of Holdings, the Borrower or any of their respective
Subsidiaries shall act in a manner which would cause its creditors to believe
that any such Person was not a separate corporate entity from the other such
Persons. Without limiting the foregoing, the consolidated financial statements
of each of Holdings and the Borrower shall, through appropriate footnote
disclosure, indicate the assets from time to time held by the Unit Subsidiary,
as opposed to Holdings or the Borrower, as the case may be, and its other
Subsidiaries. Finally, from and after the Closing Date no Credit Party nor any
of its Subsidiaries shall take any action, or conduct its affairs in a manner,
which would be reasonably likely to result in the separate existence of the Unit
Subsidiary being ignored, or in the assets and liabilities of the Unit
Subsidiary being substantively consolidated with those of any of Holdings, the
Borrower or any of their respective Subsidiaries (other than the Unit
Subsidiary) in a bankruptcy, reorganization or other insolvency proceeding.
7.15 COLLATERAL ACCESS AGREEMENTS. If, on the Closing Date, the
Borrower shall fail to provide the Agent with Collateral Access Agreements with
respect to all of the Rental Equipment locations as required under Section
5.1(e) (without giving effect to clause (ii) of the proviso thereof), the
Borrower shall exercise reasonable good faith efforts to obtain and deliver to
the Agent, within 90 days of the Closing Date, those Collateral Access
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Agreements with respect to the Rental Equipment locations for which no
Collateral Access Agreement was delivered to the Agent on the Closing Date.
7.16 NEW SUBSIDIARIES. To the extent the Borrower creates or acquires
any Wholly-Owned Subsidiary after the Closing Date in accordance with the other
provisions of this Credit Agreement, each such Wholly-Owned Subsidiary (and any
Subsidiary which guarantees any obligation under the Senior Secured Notes) shall
be required to become a party to the Subsidiaries Guaranty by executing a
counterpart thereof or enter into an amendment thereto satisfactory to the Agent
and, if requested by the Agent or the Required Lenders, shall be required to
enter into the Collateral Documents entered into by the entities which were
Subsidiary Guarantors on the Closing Date, in each case by entering into
counterparts thereof or amendments thereto, in form and substance reasonably
satisfactory to the Agent and the Collateral Agent. In connection with the
foregoing, to the extent requested by the Agent and the Collateral Agent, the
Borrower shall be required to cause to be delivered such relevant documentation
(including opinions of counsel) of the type described in Section 5.1 as the
respective Subsidiary would have delivered if it were a Credit Party on the
Closing Date.
7.17 PERMITTED ACQUISITIONS. (a) Subject to the provisions of this
Section 7.17 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and its Subsidiaries (other than the Unit Subsidiary)
may from time to time after the Closing Date effect Permitted Acquisitions, so
long as (in each case except to the extent the Required Lenders otherwise
specifically agree in writing in the case of a specific Permitted Acquisition):
(i) no Default or Event of Default shall be in existence at the time of the
consummation of the proposed Permitted Acquisition or immediately after giving
effect thereto; (ii) the Borrower shall have given the Agent at least 10
Business Days' prior written notice of any Permitted Acquisition; (iii)
calculations are made by the Borrower of compliance with the covenants contained
in Sections 8.9 and 8.10 for the period of four consecutive fiscal quarters
(taken as one accounting period) most recently ended prior to the date of such
Permitted Acquisition (each, a "Calculation Period"), on a PRO FORMA basis as if
the respective Permitted Acquisition (as well as all other Permitted
Acquisitions theretofore consummated after the first day of such Calculation
Period) had occurred on the first day of such Calculation Period, and such
recalculations shall show that such financial covenants would have been complied
with if the Permitted Acquisition had occurred on the first day of such
Calculation Period (for this purpose, if the first day of the respective
Calculation Period occurs prior to the Initial Borrowing Date, calculated as if
the covenants contained in said Sections 8.9 and 8.10 had been applicable from
the first day of the Calculation Period); (iv) the Borrower shall certify, and
the Agent shall have been satisfied in its reasonable discretion that, to the
best of the Borrower's knowledge, the proposed Permitted Acquisition could not
reasonably be expected to result in materially increased tax, ERISA,
environmental or other contingent liabilities with respect to Holdings, the
Borrower or any of their respective Subsidiaries; (v) all representations and
warranties contained
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herein and in the other Credit Documents shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Permitted Acquisition
(both before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date; (vi) the
Borrower provides to the Agent and the Lenders as soon as available but not
later than five Business Days after the execution thereof, a copy of any
executed purchase agreement or similar agreement with respect to such Permitted
Acquisition; (vii) the aggregate amount invested in all such Permitted
Acquisitions occurring on or after the Closing Date shall not exceed
$25,000,000; and (viii) the Borrower shall have delivered to the Agent an
officer's certificate executed by the chief executive officer or chief financial
officer of the Borrower, certifying to the best of his knowledge, compliance
with the requirements of preceding clauses (i) through (v), inclusive and (vii)
containing the calculations required by the preceding clauses (iii) and (vii).
(b) At the time of each Permitted Acquisition (x) involving the
creation or acquisition of a Subsidiary, or the acquisition of capital stock or
other equity interest of any Person, all capital stock or other equity interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to the Pledge
Agreement and/or (y) involving the acquisition of any Units (as defined in the
Security Agreement), whether directly or by the acquisition of a Subsidiary
which owns such Units, the provisions of Section 7.18 shall be complied with at
the time of the consummation of the respective Permitted Acquisition.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and
to execute and deliver, all of the documentation required by, Section 7.16, to
the satisfaction of the Agent.
7.18 UNIT SUBSIDIARY; PROVISIONS RELATING TO UNITS; ETC. (a) Holdings
and the Borrower shall at all times cause the Unit Subsidiary to be a direct
Wholly-Owned Subsidiary of the Borrower. Each of Holdings and the Borrower
shall take all action so that all Non-Qualified Units at any time owned or
acquired by Holdings, the Borrower or any of their respective Subsidiaries
(other than the Unit Subsidiary) are on the Closing Date (or, if acquired
thereafter, within five Business Days after the end of the month in which such
Acquisition occurred) contributed as a capital contribution to the equity of the
Unit Subsidiary. As a result of the requirements of the immediately preceding
sentence, all Non-Qualified Units at any time held by Holdings or the Borrower
and their respective Subsidiaries shall be transferred to the Unit Subsidiary,
which shall be the exclusive owner thereof.
(b) With respect to all Certificated Units at any time held by
Holdings, the Borrower or any of their Subsidiaries (other than any Certificated
Units with respect to
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which the opinions, satisfactory to the Agent, required by Section 5.1(d)(C)(y)
have been provided), Holdings and the Borrower shall take, or cause to be taken,
all action as is necessary so that, in any event within 30 days after the
Closing Date (or within 30 days after any subsequent acquisition of Certificated
Units) the security interest of the Collateral Agent therein is noted on the
certificate of title issued with respect to the respective Unit (as defined in
the Security Agreement).
ARTICLE 8.
NEGATIVE COVENANTS
Subject to Sections 11.19 and 11.20, each of Holdings and the Borrower
hereby covenants and agrees that as of the Closing Date, and thereafter, for so
long as this Credit Agreement is in effect and until the Total Commitments have
terminated, no Letter of Credit or Revolving Notes are outstanding and the
Revolving Loans and Letter of Credit Obligations, together with interest, Fees,
Expenses and all other Obligations then due and payable are paid in full:
8.1 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. Holdings
and the Borrower will not, and will not permit any of their respective
Subsidiaries to, wind up, liquidate or dissolve its affairs, or enter into any
transaction of merger or consolidation, sell or otherwise dispose of all or any
part of its property or assets or purchase, lease or otherwise acquire (in one
transaction or a series of related transactions) all or any part of the property
or assets of any Person or agree to do any of the foregoing at any future time,
except that the following shall also be permitted:
(a) Capital Expenditures (including the purchase of assets in the form
of additional Rental Equipment) to the extent within the limitations set
forth in Section 8.4;
(b) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.5;
(c) any Subsidiary of the Borrower (excluding the Unit Subsidiary) may
be merged or consolidated with or into, or be liquidated into, the Borrower
or any other Wholly-Owned Subsidiary of the Borrower (so long as the
Borrower or any other Wholly-Owned Subsidiary of the Borrower is the
surviving corporation), or all or any part of the business, properties and
assets of any Subsidiary (excluding the Unit Subsidiary) may be conveyed,
leased, sold or transferred to the Borrower or any other Wholly-Owned
Subsidiary of the Borrower;
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(d) the Permitted Sale-Leaseback Transactions shall be permitted so
long as (i) no Default or Event of Default is then in existence or would
result thereby, (ii) the Net Cash Proceeds therefrom are applied as
provided in Section 2.5(h) and (iii) the lease obligations created thereby
are otherwise permitted under this Agreement;
(e) the sale, lease or disposal in the ordinary course of business of
Inventory and Rental Equipment and the purchase, lease or other acquisition
of equipment, Inventory and Rental Equipment in the ordinary course of
business;
(f) the sale or other disposition of obsolete or excess equipment in
the ordinary course of business and the purchase of equipment in the
ordinary course of business;
(g) operating leases of property entered into or terminated in the
ordinary course of business;
(h) the Mobile Field Office Liquidation shall be permitted;
(i) the Master Lease Agreement may be entered into pursuant to Section
5.1(ee);
(j) the sale or return of automobiles and trucks which the Borrower
and its Subsidiaries customarily replace periodically with substitute
automobiles and trucks in the ordinary course of business;
(k) the Borrower or any Subsidiary may, in the ordinary course of
business, enter into licensing agreements with Persons for the use of
intellectual property or other intangible assets, and settlements,
permissions, consents to use, and similar arrangements concerning
intellectual property or other intangible assets, so long as the Borrower
or such Subsidiary uses reasonable commercial efforts to procure that each
such license or other agreements is permitted to be assigned pursuant to
the Security Agreement and does not otherwise prohibit the granting of Lien
therein by any Credit Party pursuant to the Security Agreement;
(l) the abandonment or other disposition of intellectual property and
other property that is, in the reasonable judgment of the Person owning
such intellectual property and other property, no longer economically
practicable to maintain or useful in the conduct of the business of such
Person; and
(m) the sale of (i) approximately 6.6 acres located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (ii) approximately 7 acres located at ▇▇▇▇▇▇▇
Road east
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of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, (▇▇▇) approximately 6.2 acres located at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and (iv) approximately
10 acres located at lot ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ for
aggregate cash proceeds of not less than $1,000,000;
(n) in connection with the sale of any Rental Equipment to a third
party as permitted by clause (e) above, the sale of Leases and conditional
sales contracts relating to such Rental Equipment, in each case, in the
ordinary course of business for fair market value to third parties;
PROVIDED, that in no event is any such sale with any recourse to the Seller
except for usual and customary warranties in connection with the sale of
the respective Rental Equipment;
(o) sales or other dispositions of assets, in addition to the sales or
dispositions permitted by the foregoing clauses (a) through (n), for fair
market value not to exceed $2,000,000 per fiscal year but not more than
$10,000,000 in the aggregate since the Closing Date; PROVIDED, HOWEVER,
that the Net Sale Proceeds therefrom are applied to the repayment of the
Revolving Loans as specified in Section 2.5(h).
Notwithstanding anything to the contrary contained above, (x) in no event shall
Holdings or the Borrower sell or otherwise dispose of any of their interests in
any Subsidiary except as expressly permitted pursuant to preceding Sections
8.1(c) and (h), (y) in no event shall the Unit Subsidiary be merged with or into
or consolidated with or into any other Person or be liquidated and (z) in no
event shall the Unit Subsidiary transfer any Non-Qualified Units or any interest
therein (except for the lease thereof pursuant to the Master Lease Agreement) to
Holdings, the Borrower or any other Subsidiary of the Borrower. To the extent
the Required Lenders waive the provisions of this Section 8.1 with respect to
the sale of any Collateral, or any Collateral is sold as permitted by this
Section 8.1, such Collateral in each case (so long as (x) the Collateral is not
being transferred to Holdings, the Borrower or any of their respective
Subsidiaries and (y) if any Senior Secured Notes remain outstanding, their Liens
on the respective Collateral being sold are also released) shall be sold free
and clear of the Liens in favor of the Collateral Agent and the Lenders created
by the Collateral Documents and the Collateral Agent shall take such actions as
it deems appropriate in connection therewith or may be reasonably requested by
the Borrower to evidence such Lien release, in each case at the Borrower's
expense.
8.2 LIENS. Holdings and the Borrower will not, and will not permit
any of their respective Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon or with respect to (i) the capital stock of the Borrower
or (ii) any property or assets of any kind (real or personal, tangible or
intangible) of Holdings, the Borrower or any of their respective
Subsidiaries, whether now owned or hereafter acquired, or sell any such
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase
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such property or assets (including sales of accounts receivable or notes with
recourse to Holdings, the Borrower or any of their respective Subsidiaries) or
assign any right to receive income, or file or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute (other than precautionary filings covering
leases of equipment), except Liens, sales and assignments described below
(herein referred to as "Permitted Liens"):
(a) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without
penalty or that are not yet due and payable or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower)
have been established;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law or which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, Liens in favor of customs and revenue
authorities to secure payment of customs duties in connection with the
importation of goods, and other similar Liens arising in the ordinary
course of business, and (x) which, if any such property or asset is
material, do not in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of
the business of the Borrower or such Subsidiary or (y) which are being
contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property or asset
subject to such Lien;
(c) Liens created by or pursuant to this Credit Agreement or the other
Credit Documents;
(d)Liens existing on the Closing Date and listed on Schedule XIII
hereto and renewals and extensions thereof so long as the principal amount
of the Indebtedness secured thereby is not increased and no additional
assets are encumbered thereby ("Existing Liens");
(e) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (x) in connection with liability
insurance, workers' compensation, unemployment insurance and other types of
social security, or (y) to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business, in an aggregate amount (in the
case of this clause (y)) not to exceed $2,500,000 (exclusive of obligations
(i) in respect of borrowed money or (ii) in respect of which a Letter of
Credit has been issued);
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(f) leases or subleases granted to third Persons not interfering with
the ordinary course of business of the Borrower or any of its Subsidiaries;
(g) Capital Leases to the extent permitted under Section 8.3(b);
(h) Liens (x) arising pursuant to purchase money mortgages securing
Indebtedness representing the purchase price (or financing of the purchase
price within 180 days after the respective purchase) of property or other
assets acquired by the Borrower or any Subsidiary, and any extensions,
renewals or replacements of such Liens, PROVIDED that (i) any such Liens
attach only to the assets so purchased, (ii) the Indebtedness secured by
any such Lien does not exceed 100% of the purchase price of the assets
being purchased and (iii) the Indebtedness secured thereby or any
refinancing thereof is permitted by Section 8.3(b); or (y) existing on
specific tangible assets at the time acquired by the Borrower or any
Subsidiary or on assets of a Person at the time such Person first becomes a
Subsidiary or was merged into the Borrower or any Subsidiary; PROVIDED,
that (i) any such Liens were not created at the time of or in contemplation
of the acquisition of such assets or Person by the Borrower or such
Subsidiary, (ii) in the case of any such acquisition of a Person, any such
Lien attaches only to specific tangible assets of such Person and not
assets of such Person generally and (iii) the Indebtedness secured thereby
or any refinancing thereof is permitted by Section 8.3(b);
(i) easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the business
of the Borrower and its Subsidiaries;
(j) Liens created under ERISA and under Environmental Laws that are
being contested in good faith and as to which adequate reserves have been
established to the extent required by GAAP and secure obligations not in
excess of $2,500,000 in the aggregate;
(k) Permitted Encumbrances;
(l) Liens securing Indebtedness permitted under Section 8.3(h);
PROVIDED that such liens are subordinate to all Liens created by or
pursuant to the Credit Documents pursuant to documentation in form and
substance satisfactory to the Agent;
(m) Liens other than those described in the preceding clauses (a)
through (l) so long as neither (x) the aggregate amount of obligations at
any time secured thereby, nor (y) the aggregate fair market value of the
assets subject thereto, exceeds $2,500,000 at any time;
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(n) Permitted Sale-Lease Back transactions so long as such
transactions comply with Section 8.1(d);
(o) any attachment or judgment Lien securing assets with a value less
than $1,000,000 not constituting an Event of Default under Section 9.1(h)
that is being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP;
(p) the leasehold interests of customers in Rental Equipment, in each
case to the extent the respective lease is entered into by the Borrower or
its respective Subsidiary in the ordinary course of its business and is not
pursuant to a sale-leaseback or similar financing transaction; and
(q) the Borrower may enter into the Deposit Account Agreement in the
form of Exhibit M and additional Deposit Account Agreements in
substantially the same form with respect to any additional Collection
Account or Concentration Account entered into in accordance with the terms
of this Credit Agreement.
Notwithstanding anything to the contrary above, in no event shall
there be any "Additional First Lien Debt" (as such term is defined in the
Intercreditor Agreement) without the express consent of the Required Lenders.
8.3 INDEBTEDNESS. Holdings and the Borrower will not, and will not
permit any of their respective Subsidiaries to, contract, create, incur, assume
or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Credit Agreement and the
other Credit Documents;
(b) Capitalized Lease Obligations and Indebtedness of the Borrower
secured by Liens permitted by Section 8.2(h) in an aggregate amount not to
exceed $5,000,000 in any fiscal year;
(c) Existing Indebtedness;
(d) Indebtedness of the Borrower evidenced by the Senior Unsecured
Notes in aggregate principal amount not to exceed $400,000,000 (less the
amount of principal repayments thereof effected after the Closing Date),
and guarantees thereof by the Subsidiary Guarantors, so long as the
guarantee of the Unit Subsidiary is subordinated on the terms as provided
in the Senior Unsecured Notes Indenture as in effect on the date hereof;
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(e) Indebtedness of the Borrower or any of its Wholly-Owned
Subsidiaries owing to the Borrower or any of its Wholly-Owned Subsidiaries,
in each case to the extent making such loan was permitted in Section 8.5;
(f) Indebtedness of the Borrower or any of the Borrower's Subsidiaries
(other than the Unit Subsidiary) evidenced by guarantees, performance bonds
and surety bonds incurred in the ordinary course of business for purposes
of insuring the performance of the Borrower or such Subsidiary in an
aggregate principal amount not to exceed $1,000,000 at any time
outstanding;
(g) Indebtedness under Interest Rate Agreements determined in good
faith by the Borrower to be related to outstanding floating rate
Indebtedness permitted to remain outstanding pursuant to this Section 8.3
and which the Borrower in good faith determines are non-speculative in
nature, PROVIDED THAT the outstanding exposure in connection therewith
shall at no time exceed $15,000,000;
(h) Indebtedness of the Borrower evidenced by the Senior Secured
Notes, if any, not purchased pursuant to the Senior Secured Notes Tender
Offer/Consent Solicitation (which in no event shall exceed $82,499,999)
less the amount of principal repayments thereof after the Closing Date, and
guarantees thereof by Holdings and the Subsidiary Guarantors;
(i) Indebtedness of Holdings evidenced by the Holding Co. Notes, if
any, not purchased pursuant to the Holding Co. Notes Tender Offer/Consent
Solicitation (which in no event shall exceed $14,649,999) less the amount
of principal repayments thereof after the Closing Date;
(j) on or prior to January 31, 1998, Indebtedness in the form of
Recapitalization Notes in an aggregate principal amount not to exceed
$25,000,000;
(k) Indebtedness of the Borrower or any of the Borrower's Subsidiaries
(other than the Unit Subsidiary), in addition to other Indebtedness
permitted under clauses (a) through (j) above, in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding; and
(l) Indebtedness of the Borrower or any of the Borrower's Subsidiaries
(other than the Unit Subsidiary) incurred to refinance any Indebtedness
described in Section 8.3(b) and (c), in each case so long as the principal
amount of outstanding Indebtedness is not increased as a result of any such
refinancing, the weighted average maturity thereof is not decreased and no
greater Liens or security interests are granted, and no additional
guarantees provided, in connection therewith.
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8.4 CAPITAL EXPENDITURES. (a) Holdings and the Borrower will not, and
will not permit any of their respective Subsidiaries to, make any Capital
Expenditures, except that during any fiscal year set forth below, Holdings, the
Borrower and their respective Subsidiaries may make Capital Expenditures, so
long as the aggregate amount of such Capital Expenditures does not exceed in any
fiscal year set forth below the amount set forth below opposite such fiscal
year:
FISCAL YEAR ENDING AMOUNT
------------------ ------
December 31, 1997 $ 84,700,000
December 31, 1998 $ 97,400,000
December 31, 1999 $106,100,000
December 31, 2000 $104,900,000
December 31, 2001 $103,100,000
December 31, 2002 $107,200,000
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by Holdings, the Borrower and their
respective Subsidiaries pursuant to clause (a) above in any fiscal year (before
giving effect to any increase in such permitted expenditure amount pursuant to
this clause (b) and after giving effect to any reduction in such permitted
expenditure amount pursuant to clause (c) below) is greater than the amount of
such Capital Expenditures made by Holdings, the Borrower and their respective
Subsidiaries during such fiscal year, such excess (the "CapEx Rollover Amount")
may be carried forward and utilized to make Capital Expenditures in the
immediately succeeding fiscal year.
(c) In addition to any amounts set forth in clause (a) or (b) above,
in any fiscal year Holdings, the Borrower and their respective Subsidiaries may
make Capital Expenditures in an amount equal to 15% of the amount set forth in
clause (a) above for such fiscal year; PROVIDED, that (i) no Capital
Expenditures were made pursuant to this clause (c) during the prior fiscal year
and (ii) if Capital Expenditures are made during a fiscal year pursuant to this
clause (c), then the amount of Capital Expenditures permitted for the subsequent
fiscal year pursuant to clause (a) above shall be reduced by the amount of such
Capital Expenditures made during such fiscal year pursuant to this clause (c).
(d) Notwithstanding the foregoing, Holdings, the Borrower and their
respective Subsidiaries may make Capital Expenditures (which Capital
Expenditures will not be included in any determination under the foregoing
clause (a), (b) or (c)) with the insurance proceeds received by Holdings, the
Borrower or any of their respective Subsidiaries from any Casualty Loss so long
as such Capital Expenditures are to replace or restore any properties or assets
in respect of which such proceeds were paid in accordance with Section 7.10.
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(e) To the extent any Capital Expenditures made pursuant to clauses
(a), (b) or (c) above involve the purchase or lease of real property, such
Capital Expenditures may not be made unless, to the best of the Borrower's
knowledge, such purchase or lease will not result in any material increase in
the contingent liabilities (including environmental liabilities) of the Borrower
or any of its Subsidiaries.
8.5 INVESTMENTS. Holdings and the Borrower will not, and will not
permit any of their respective Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities issued by, or any other interest in, or make any capital contribution
to (collectively, "Investments") any other Person, except:
(a) Holdings, the Borrower or any of their respective Subsidiaries may
acquire and hold accounts receivables owing to it, if created or acquired
in the ordinary course of business and payable or dischargeable in
accordance with the customary trade terms of the Borrower or its applicable
Subsidiary, as the case may be;
(b) loans and advances to employees, officers and directors in the
ordinary course of business in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding shall be permitted;
(c) subject to continued compliance with Section 7.18 and the last
paragraph of Section 8.1 in the case of any Investments being made by the
Unit Subsidiary, any Investment by any Subsidiary of the Borrower in the
Borrower (so long as any loan made by a Subsidiary of the Borrower, other
than the Unit Subsidiary) to the Borrower is subordinated to the
Obligations on terms satisfactory to the Agent) or in another Wholly-Owned
Subsidiary of the Borrower;
(d) subject to Section 8.16, Investments in Cash Equivalents shall be
permitted;
(e) Investments by Holdings, the Borrower and their respective
Subsidiaries permitted under Section 8.1 and Capital Expenditures permitted
under Section 8.4 shall be permitted;
(f) Investments existing on the Closing Date and listed on Schedule
XIV hereto, without giving effect to any additions thereto or replacements
thereof, shall be permitted;
(g) Investments which may be deemed to exist as a result of the
entering into of Interest Rate Agreements to the extent permitted by
Section 8.3(g); and
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(h) Holdings may make capital contributions to the Borrower;
(i) the Borrower and its Wholly-Owned Domestic Subsidiaries may make
intercompany loans and advances to each other, so long as each such
intercompany loan is evidenced by a promissory note pledged pursuant to the
Pledge Agreement;
(j) the Borrower and any Wholly-Owned Subsidiary (other than the Unit
Subsidiary) may make Permitted Acquisitions in accordance with the terms of
this Credit Agreement;
(k) so long as no Default or Event of Default is then in existence or
would result thereby, the Borrower and its Wholly-Owned Subsidiaries may
make intercompany loans and advances to pay Dividends to the extent
permitted by Section 8.6; and
(l) the Borrower and each Subsidiary Guarantor may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and
suppliers arising the ordinary course of business;
(m) the Borrower may make capital contributions (but not of Eligible
Accounts Receivable) to its Wholly-Owned Subsidiaries so long as such
capital contributions are made in compliance with Section 7.18 (if
applicable); and
(n) any Investments in addition to those contemplated by the foregoing
clauses (a) through (m), PROVIDED that all Investments made pursuant to
this clause (n) shall be permitted by the Senior Unsecured Note Documents
and shall not exceed $10,000,000 at any time outstanding.
8.6 DIVIDENDS, ETC. Holdings and the Borrower will not, and will not
permit any of their respective Subsidiaries to, declare or pay any dividends
(other than dividends payable solely in common stock of the Person paying such
dividend) or return any capital to, its stockholders or authorize or make any
other distribution, payment or delivery of property or cash to its stockholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration (other than consideration in the form of common
stock of the Person paying such dividend), any shares of any class of its
capital stock now or hereafter outstanding (or any warrants for or options or
stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes and Holdings and the Borrower will not
permit any of their respective Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of Holdings, the
Borrower or any of their respective Subsidiaries now or
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hereafter outstanding (or any warrants for or options or stock appreciation
rights issued by such Person in respect of any such shares) (all of the
foregoing "Dividends"), except that:
(a) any Subsidiary of the Borrower may pay Dividends to the Borrower
or any Wholly-Owned Subsidiary of the Borrower which owns equity interest
therein;
(b) Holdings may pay regularly scheduled Dividends on the Permitted
Preferred Stock pursuant to the terms thereof solely through the issuance
of additional preferred shares of such Permitted Preferred Stock;
(c) the Borrower may pay Dividends or make loans to Holdings to
enable Holdings to (i) pay reasonable and customary corporate and
administrative expenses not to exceed in the aggregate $250,000 per year in
the ordinary course, (ii) pay principal and interest on the
Recapitalization Notes, (iii) pay fees, expenses and other payments
required in connection with the Transaction and (iv) make payments
expressly permitted pursuant to Section 8.7;
(d) the Borrower may pay Dividends or make loans to Holdings, so long
as Holdings immediately uses all proceeds thereof to (x) make payments
owing by it in respect of the Recapitalization Notes and/or (y) to
repurchase, redeem or retire the Recapitalization Notes, as long as no
premium is paid in connection therewith;
(e) so long as the payments relate to a period for which the Borrower
is a member of the same consolidated group as Holdings for federal income
tax purposes, the Borrower may make payments required pursuant to the Tax
Sharing Agreement as in effect on the Closing Date and delivered to the
Agent pursuant to Section 5.1(o);
(f) during the 60-day period following the Closing Date, the Borrower
may pay cash Dividends or make loans to Holdings, which in turn shall
(within one Business Day thereafter) utilize the full amount of such cash
Dividends to fund the transactions contemplated by the Recapitalization
(including fees and expenses in connection with the Transaction) so long as
no Default or Event of Default then exists or would exist after giving
effect thereto;
(g) Holdings may repurchase Holdings Common Stock or options to
purchase Holdings Common Stock held by current or former directors,
executives, officers, members of management or employees of Holdings, the
Borrower or any of their respective Subsidiaries (or their spouses or
estates), PROVIDED that (1) no Default or Event of Default then exists or
would result therefrom and (2) the
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aggregate amount of cash expended by Holdings pursuant to this clause (g)
during any fiscal year of Holdings shall not exceed $1,500,000 in the
aggregate;
(h) the Borrower may pay cash Dividends or make loans to Holdings for
the purpose of enabling Holdings to pay the purchases referred to in clause
(g) above, so long as all proceeds thereof are promptly used by Holdings to
make such purchases and/or pay such Dividends;
(i) the Borrower may pay Dividends or make loans to Holdings to
enable Holdings to fund interest on, and redeem, repurchase, defease or pay
upon maturity, the Holding Co. Notes (including any accrued interest,
principal and premium thereon); and
(j) repurchases of capital stock of Holdings which may be deemed to
occur upon exercise of stock options if such capital stock represents a
portion of the exercise price of such options.
8.7 TRANSACTIONS WITH AFFILIATES. Holdings and the Borrower will not,
and will not permit any of their respective Subsidiaries to, enter into any
transaction or series of transactions after the Closing Date whether or not in
the ordinary course of business, with any Affiliate other than on terms and
conditions substantially as favorable to Holdings, the Borrower or such
Subsidiary as would be obtainable by Holdings, the Borrower or such Subsidiary
at the time in a comparable arm's-length transaction with a Person other than an
Affiliate, PROVIDED that the foregoing restrictions shall not apply to (i) the
payment by Holdings or the Borrower of fees, expenses and other amounts to the
Equity Investors and their respective Affiliates in connection with the
Transaction and payments by Holdings, the Borrower and any of their respective
Subsidiaries to the Equity Investors and their respective Affiliates made
pursuant to any financial advisory, financing, underwriting or placement
agreement, or in respect of other investment banking activities, in each case as
determined by the board of directors of such Person in good faith, so long as
the amount of any such fees, expenses, or other amounts paid for any such
service provided shall not exceed the usual and customary fees for similar
services rendered by or obtainable from Persons other than the Equity Investors
and their Affiliates to such Credit Party, (ii) employment arrangements entered
into in the ordinary course of business with officers, directors or similar
executives of Holdings, the Borrower, and their respective Subsidiaries, (iii)
customary fees paid to members of the Board of Directors of Holdings, the
Borrower, and their respective Subsidiaries, (iv) subject to, in the case of the
Unit Subsidiary, continued compliance with the requirements of Section 7.18 and
the last paragraph of Section 8.1, transactions between the Borrower and any of
its Wholly-Owned Subsidiaries or among Wholly-Owned Subsidiaries of the
Borrower; (v) transactions expressly permitted pursuant to Section 8.6; (vi) any
issuance of securities, or other payments, benefits, awards or grants in cash,
securities or otherwise, pursuant to, or the funding of, employment
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arrangements, stock option and stock ownership plans or deferred compensation
plans approved by the Board of Directors of Holdings, the Borrower or the
respective Subsidiary (other than the Unit Subsidiary); (vii) loans or advances
to employees in the ordinary course of business in accordance with past
practices of Holdings, the Borrower or its Subsidiaries (other than the Unit
Subsidiary), but in any event not to exceed $1,000,000 in aggregate amount at
any time outstanding (calculated without regard to any write-downs or write-offs
thereof); (viii) payments pursuant to the Tax Sharing Agreement as originally in
effect; (ix) indemnification agreements with, and the payment of fees and
indemnity to, directors, officers and employees of Holdings, the Borrower or any
Subsidiary of the Borrower (other than the Unit Subsidiary) in each case in the
ordinary course of business; (x) any severance, noncompetition or
confidentiality agreement entered into by Holdings, the Borrower or any
Subsidiary (other than the Unit Subsidiary) with its employees in the ordinary
course of business; and (xi) Holdings' entrance into and, subject to continued
compliance with the terms and conditions set forth herein, Holdings' performance
of its obligations under (a) the Investor Stockholders Agreement dated as of May
22, 1997 among Holdings, Cypress Merchant Banking Partners L.P., Cypress
Offshore Partners L.P., Scotsman Partners L.P., Odyssey Partners, L.P. and BT
Investment Partners, Inc., (b) the Second Amended and Restated Management
Stockholders' and Optionholders' Agreement dated as of May 22, 1997 among
Holdings, Cypress Merchant Banking Partners L.P., Cypress Offshore Partners
L.P., Scotsman Partners, L.P., the Management Stockholders (as defined therein)
and the Permitted Transferees (as defined therein) of the Management
Stockholders who become parties thereto pursuant to the terms and provisions
contained therein and (c) the Amending Agreement dated as of May 22, 1997 among
Holdings, Odyssey Partners, L.P. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
Notwithstanding the foregoing, Holdings and the Borrower shall not,
and shall not permit their respective Subsidiaries to, enter into any agreements
with any Affiliates thereof (or any officers or management of such Affiliates),
or any other person providing for management services (other than the Unit
Subsidiary Management Agreement and any other Management Agreements whereby one
or more Subsidiaries of the Borrower pay fees for management services solely to
the Borrower).
8.8 CHANGES IN BUSINESS. (a) Holdings and the Borrower will not, and
will not permit their respective Subsidiaries to, engage in any business except
(i) all or any part of the business of selling and leasing storage containers,
mobile offices and modular structures and related equipment or any other
equipment sold or leased to a similar customer base and (ii) any business or
services related, ancillary or complementary to such businesses.
(b) Holdings shall not engage in any business other than relating to
its ownership of the capital stock of the Borrower, the issuance of the Holding
Co. Notes and Recapitalization Notes, its guaranty of the Borrower's obligations
under the Credit
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Agreement and any other activity expressly contemplated by this Agreement, the
other Credit Documents and the Recapitalization Agreement. Holdings shall have
no significant assets other than its ownership interests as described in the
immediately preceding sentence and shall act as a holding company which shall
not directly engage in any business.
8.9 INTEREST COVERAGE RATIO. The Borrower will not permit the
Interest Coverage Ratio for any period of four consecutive fiscal quarters (or,
if shorter, the period beginning on July 1, 1997 and ending on the last day of a
fiscal quarter of the Borrower ended during a period specified below), in each
case taken as one accounting period, ended on a date during a period set forth
below to be less than the ratio set forth opposite such period:
Period Ratio
------ -----
July 1, 1997 through and 1.45
including June 30, 1998
July 1, 1998 through and 1.50
including September 30, 1998
October 1, 1998 through and 1.55
including March 31, 1999
April 1, 1999 through and 1.60
including June 30, 1999
July 1, 1999 through and 1.65
including September 30, 1999
October 1, 1999 through and 1.75
including December 31, 1999
January 1, 2000 through and 1.80
including March 31, 2000
April 1, 2000 through and 1.85
including June 30, 2000
July 1, 2000 through and 1.90
including September 30, 2000
October 1, 2000 through and 1.95
including December 31, 2000
Thereafter 2.00
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8.10 UTILIZATION. The Borrower will not permit the Utilization for
any period of 13 consecutive fiscal months ended on the last day of any fiscal
quarter (calculated by taking the average of the Utilization for each of the 13
months in such period) to be less than 75%.
8.11 CREATION OF SUBSIDIARIES. Holdings and the Borrower will not, and
will not permit any of their respective Subsidiaries to, create or acquire any
Subsidiaries other than as permitted in Section 7.17 without the consent of the
Required Lenders.
8.12 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF GOVERNING DOCUMENTS, PREFERRED STOCK AND CERTAIN
OTHER AGREEMENTS; ETC. (a) Holdings and the Borrower will not, and will not
permit any of their respective Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) exchange or purchase, redeem or acquire for
value (whether as a result of a Change of Control, the consummation of
asset sales or otherwise) any Recapitalization Note, Holding Co. Note,
Senior Secured Note or Senior Unsecured Note;
(ii) amend or modify, or permit the amendment or modification of, any
provision of any Recapitalization Note, Senior Secured Notes Indenture,
Holding Co. Notes Indenture, Senior Secured Note Collateral Document or any
Senior Unsecured Note Document, except (x) any amendment or modification
which is not adverse to the Lenders in any respect (it being understood and
agreed that, with respect to the Senior Unsecured Note Documents, in no
event shall any amendment be permitted which relates to the Unit
Subsidiary's guaranty of the Senior Unsecured Notes or the subordination
provisions applicable thereto) and (y) in the case of the Holding Co. Notes
Documents, the Senior Secured Notes Indenture and the Senior Secured Notes
Collateral Documents, amendments, restatements and supplements thereto
executed on or prior to the Closing Date as contemplated by the Transaction
Documents;
(iii) amend, modify or change in any way adverse to the interests
of the Lenders, any Tax Sharing Agreement, the Equity Issuance Documents
(other than the Permitted Preferred Stock), any Management Agreement, the
Master Lease Agreement, the Unit Subsidiary Management Agreement, any
Recapitalization Document, its Certificate of Incorporation (including,
without limitation, by the filing or modification of any certificate of
designation), By-Laws or Limited Liability Company Agreement, or any
agreement entered into by it, with respect to
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its capital stock (including any Shareholders' Agreement, except as
contemplated by the Recapitalization Agreement), or enter into any new Tax
Sharing Agreement, Management Agreement or agreement with respect to its
capital stock which could in any way be adverse to the interests of the
Lenders in their capacity as such; and
(iv) amend, modify or change in any way adverse to the Lenders any
preferred stock (or any Certificates of Designation relating thereto).
(b) Notwithstanding anything to the contrary contained in clause (a)
above, (i) the transactions described in Sections 5.1(j) shall be permitted in
accordance with the provisions of said section and the component definitions as
used therein, (ii) Holdings shall be permitted to repurchase, redeem, acquire
for value and/or retire Recapitalization Notes for a price not to exceed the
outstanding principal amount thereof plus the amount of any accrued and unpaid
interest thereon, in accordance with the terms thereof, (iii) so long as no
Default or Event of Default then exists or would result thereby, prior to the
Senior Secured Notes Repayment Date, the Borrower shall be permitted to
repurchase, redeem, acquire for value and/or retire Senior Secured Notes from
time to time for a price not to exceed 104.83% of the face amount of any Senior
Secured Notes repurchased, redeemed, or acquired for value or retired, plus any
accrued and unpaid interest thereon, and (iv) so long as no Default or Event of
Default then exists or it would result thereby, prior to the Holding Co. Notes
Repayment Date, Holdings shall be permitted to repurchase, redeem, acquire for
value and/or retire Holding Co. Notes from time to time for a price not to
exceed 107.36% of the face amount of any Holding Co. Notes repurchased,
redeemed, acquired for value or retired, plus any accrued and unpaid interest
thereon; PROVIDED that any Notes repurchased, redeemed, acquired for value
and/or retired pursuant to clauses (ii), (iii) or (iv) above shall be
permanently retired.
8.13 ISSUANCE OF STOCK. (a) Holdings shall not issue any shares of
capital stock after the Closing Date, other than (i) shares of Holdings Common
Stock to the extent not resulting in a Change of Control, (ii) shares of
Permitted Preferred Stock on terms and conditions, and pursuant to
documentation, in form and substance satisfactory to the Agent and the Required
Lenders, and (iii) shares of Permitted Preferred Stock paid as pay-in-kind
Dividends on the Permitted Preferred Stock and (b) the Borrower will not permit
any of its Subsidiaries directly or indirectly to issue, sell, assign, pledge or
otherwise encumber or dispose of any shares of its capital stock or other equity
securities (or warrants, rights or options to acquire shares or other equity
securities) of such Subsidiary to any Person other than Holdings or another
Wholly-Owned Subsidiary, except, (x) to the extent permitted by Sections 7.3,
7.17, 8.1(c), 8.2 and 8.5 and (y) for the issuance of directors' qualifying
shares to the extent required by applicable law.
8.14 LIMITATION ON RESTRICTIONS AFFECTING SUBSIDIARIES. Each of
Holdings and the Borrower will not, and will not permit any of their respective
Subsidiaries to,
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directly or indirectly, create or otherwise cause or suffer to exist any
encumbrance or restriction which prohibits or limits the ability of the Borrower
or any Subsidiary of Holdings or the Borrower to (a) pay dividends or make other
distributions or pay any Indebtedness owed to Holdings, the Borrower or any of
their respective Subsidiaries, (b) make loans or advances to Holdings, the
Borrower or any of their respective Subsidiaries, (c) transfer any of its
properties or assets to Holdings, the Borrower or any of their respective
Subsidiaries or (d) create, incur, assume or suffer to exist any lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than encumbrances and restrictions arising under (i) applicable law, (ii)
this Credit Agreement, the other Credit Documents and the Transaction Documents,
(iii) Indebtedness permitted pursuant to Sections 8.3(c), (d), (h) and (i), (iv)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of Holdings, the Borrower or any of their respective
Subsidiaries, (v) customary restrictions on dispositions of real property
interests found in reciprocal easement agreements of Holdings, the Borrower or
any of their respective Subsidiaries, (vi) any agreement relating to
Indebtedness incurred by a Subsidiary of the Borrower prior to the date on which
such Subsidiary was acquired by the Borrower and outstanding on such acquisition
date, (vii) the extension or continuation of contractual obligations in
existence on the date hereof, PROVIDED that any such encumbrances or
restrictions contained in such continuation are no less favorable to the Lenders
than those encumbrances and restrictions under or pursuant to the contractual
obligations continued hereby, and (viii) restrictions imposed under the
agreements relating to Indebtedness permitted under Section 8.3(b), PROVIDED
that such restrictions apply only to the property securing such Indebtedness as
permitted hereunder.
8.15 NO ADDITIONAL BANK ACCOUNTS. Holdings and the Borrower will not,
and will not permit any of their respective Subsidiaries to, directly or
indirectly, open, maintain or otherwise have any checking, savings or other
deposit accounts at any bank or other financial institution where money is or
may be deposited or maintained with any Person, other than (i) the Concentration
Account, the Collection Accounts, the Disbursement Account, any cash Collateral
Account established pursuant to Section 2.5(e) and the accounts set forth on
Schedule XV and (ii) local accounts in the ordinary course of business and in
compliance with Section 8.16 and as set forth on Schedule XV, it being
understood that in no event shall Holdings, the Borrower or any of their
respective Subsidiaries be permitted to direct any payments on behalf of any
Accounts or Leases or any other Collateral to such local accounts.
8.16 NO EXCESS CASH. Holdings and the Borrower will not, and will not
permit any of their respective Subsidiaries to, directly or indirectly, maintain
in the aggregate in all of the checking, savings or other accounts (other than
the Disbursement Accounts, the Collection Accounts, the Concentration Account,
the payroll accounts and the Deferred Compensation Program Investment Account
set forth on Schedule XV) of Holdings, the Borrower and their respective
Subsidiaries total cash balances and investments
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(including Investments in Cash Equivalents) in excess of $500,000 (or, on the
Closing Date and during the immediately following six Business Days, in the case
of amounts representing proceeds of Revolving Loans or other funds received on
the Closing Date in connection with the Transaction, $2,500,000) at any time
during which any Revolving Loans are outstanding hereunder.
8.17 ACCOUNT TERMS. The Borrower shall, and shall cause each of its
Subsidiaries to, promptly pay when due, or in conformity with customary trade
terms consistent with past practices, all of their trade accounts payable,
except for late payment in the ordinary course of business, the lateness of
which payment, singly or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
8.18 PERMITTED PREFERRED STOCK. At all times prior to the Expiration
Date and thereafter until the payment in full in cash of all Obligations then
due and payable hereunder, the Borrower shall pay Dividends on the Permitted
Preferred Stock only in additional shares of Permitted Preferred Stock.
8.19 UNIT SUBSIDIARY. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement, in no event will (i) the Unit
Subsidiary be liquidated and/or dissolved, (ii) the Unit Subsidiary be merged or
consolidated with or into Holdings, the Borrower or any of their respective
other Subsidiaries or any other Person, (iii) the Unit Subsidiary become a
"Guarantor" as opposed to a "Subordinated Guarantor" under the Senior Unsecured
Notes Indenture, (iv) the Borrower permit the "Subordinated Guaranty" of the
Unit Subsidiary contained in the Senior Unsecured Notes Indenture to be released
or (v) the Unit Subsidiary have any Indebtedness other than Indebtedness
expressly permitted under Section 8.3.
ARTICLE 9.
EVENTS OF DEFAULT AND REMEDIES
9.1 EVENTS OF DEFAULT. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) PAYMENTS. The Borrower shall (i) default in the payment when due
of any principal of the Revolving Loans or (ii) default, and such default
shall continue for five or more days, in the payment when due of, any
interest on the Revolving Loans or any drawings under Letters of Credit
which have not been reimbursed by the Borrower (including through the
incurrence of Revolving Loans), or (iii) default, and such default shall
continue for five or more days after written demand therefor by the Agent,
in the payment when due of any Fees, Expense or any other amounts owing
hereunder or under any other Credit Document; or
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(b) REPRESENTATIONS, ETC. Any representation or warranty made by any
Credit Party herein or in any other Credit Document or in any statement or
certificate delivered or required to be delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
(c) COVENANTS. Holdings or the Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement
contained in Sections 7.1(e), 7.1(h), 7.8, 7.12, 7.17 or 7.18 or Article 8,
or (ii) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in Section 9.1(a),
9.1(b) or clause (i) of this Section 9.1(c)) contained in this Credit
Agreement or the other Credit Documents and such default shall continue
unremedied for a period of at least 30 days after notice to the defaulting
party by the Agent or the Required Lenders; or
(d) DEFAULT UNDER OTHER AGREEMENTS. (i) Holdings, the Borrower or any
of their respective Subsidiaries shall (x) default in any payment with
respect to any Indebtedness (other than the Obligations) beyond the period
of grace, if any, applicable thereto or (y) default in the observance or
performance of any agreement or condition relating to any such Indebtedness
or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause any such Indebtedness to become
due prior to its stated maturity; or (ii) any such Indebtedness of
Holdings, the Borrower or any of their respective Subsidiaries shall be
declared by the holders thereof or a representative therefor to be due and
payable prior to the stated maturity thereof; PROVIDED that it shall not
constitute an Event of Default pursuant to this Section 9.1 unless the
principal amount of any one issue of Indebtedness referred to in clauses
(i) or (ii) above exceeds $2,000,000 or the aggregate amount of all
Indebtedness referred to in clauses (i) and (ii) above exceeds $3,000,000
at any one time; or
(e) BANKRUPTCY, ETC. Holdings, the Borrower or any of their
respective Subsidiaries, shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or
an involuntary case is commenced against Holdings, the Borrower or any of
their respective Subsidiaries, and the petition is not controverted within
30 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for,
or takes charge of, all or substantially all of the property of Holdings,
the Borrower or any of its Subsidiaries; or Holdings, the Borrower or any
of their respective Subsidiaries commences any other proceeding under any
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reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Holdings, the Borrower or
such Subsidiary; or there is commenced against Holdings, the Borrower or
any of their respective Subsidiaries, any such proceeding which remains
undismissed for a period of 60 days; or Holdings, the Borrower or any of
their respective Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is
entered; or Holdings, the Borrower or any of their respective Subsidiaries
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or Holdings, the Borrower or any of their respective
Subsidiaries makes a general assignment for the benefit of creditors; or
any corporate action is taken by Holdings, the Borrower or any of their
respective Subsidiaries for the purpose of effecting any of the foregoing,
PROVIDED that the Mobile Field Office Liquidation shall not constitute a
Default or an Event of Default hereunder; or
(f) ERISA. (i) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof after the Closing Date
under Section 412 of the Code or Section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event
shall have occurred, a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be
subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof) and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur with respect
to such Plan within the following 30 days, any Plan which is subject to
Title IV of ERISA shall have had or is likely to have a trustee appointed
to administer such Plan, any Plan which is subject to Title IV of ERISA is,
shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan subject to Title IV of ERISA
shall have an Unfunded Current Liability, a contribution required to be
made with respect to a Plan or a Foreign Pension Plan has not been timely
made, the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on
account of a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the
Borrower or any Subsidiary of the Borrower has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans
(as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA or any other applicable continuation of coverage
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laws) or Plans or Foreign Pension Plans; (ii) there shall result from any
such event or events the imposition of a Lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and
(iii) such Lien, security interest or liability, individually, and/or in
the aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect; or
(g) COLLATERAL DOCUMENTS. Any Collateral Document shall cease to be
in full force and effect (except in accordance with the terms thereof), or
shall cease to give the Collateral Agent on behalf of the Lenders the
Liens, rights, powers and privileges purported to be created thereby in
favor of the Collateral Agent, any Credit Party shall default in any
material respect in the due performance or observance of any term, covenant
or agreement on its part to be performed or observed pursuant to any such
Collateral Document and such default shall continue unremedied for a period
of at least 30 days after notice to the Borrower by the Agent or the
Required Lenders; or
(h) JUDGMENTS. One or more judgments or decrees shall be entered
against Holdings, the Borrower or any of their respective Subsidiaries
involving a liability of $1,000,000 or more in the case of any one such
judgment or decree (to the extent not paid or covered by insurance provided
by a carrier that has acknowledged coverage) and all such judgments or
decrees shall not have been vacated, discharged or stayed pending appeal
within 60 days from the entry thereof; or
(i) CHANGE OF CONTROL. A Change of Control shall occur; or
(j) GUARANTY. Any Guaranty shall cease to be in full force and effect
(except in accordance with the terms thereof), or any Guarantor shall
default in any material respect in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant thereto or any Guarantor shall deny or disaffirm any of its
obligations thereunder and such default, denial or disaffirmation shall
continue unremedied for a period of at least 30 days after notice to the
Borrower by the Agent or the Required Lenders;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to
enforce its claims against the Borrower, except as otherwise specifically
provided for in this Credit Agreement (PROVIDED that, if an Event of Default
specified in Section 9.1(e) shall occur with respect to the Borrower or the Unit
Subsidiary, the result which would occur upon the giving of written notice by
the Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitments
terminated, whereupon the Commitment
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of each Lender shall forthwith terminate immediately and any Unused Line Fee
accrued and unpaid shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Revolving Loans and all Obligations owing hereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; (iii) direct the Collateral Agent to enforce any or all of the
Liens and security interests created pursuant to the Collateral Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; and/or (v) direct the Borrower to pay (and the Borrower hereby agrees
upon receipt of such notice, or upon the occurrence of any Event of Default
specified in Section 9.1(e) in respect of the Borrower, it will pay) to the
Payments Administrator at its Payment Office such additional amounts of cash, to
be held as security for the Borrower's reimbursement obligations in respect of
Letter of Credit then outstanding equal to the aggregate of all Letters of
Credit Obligations.
ARTICLE 10.
THE AGENT
10.1 APPOINTMENT. (a) Each Lender hereby designates BTCC as Agent
(for purposes of this Section 10, the term "Agent" shall include BTCC as
Payments Administrator and as Collateral Agent under the Collateral Documents),
to act as herein specified. Each Lender hereby irrevocably authorizes, and each
holder of any Revolving Note or participation in any Letter of Credit by the
acceptance of a Revolving Note or participation shall be deemed irrevocably to
authorize, the Agent to take such action on its behalf under the provisions of
this Credit Agreement and the Revolving Notes and any other instruments and
agreements referred to herein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. Subject to the Intercreditor Agreement, the
Collateral Agent shall hold all Collateral and the Payments Administrator shall
hold all payments of principal, interest, Fees, charges and Expenses received
pursuant to this Credit Agreement or any other Credit Document for the benefit
of the Lenders to be distributed as provided herein. The Agent may perform any
of its duties hereunder by or through its agents or employees.
(b) The provisions of this Article 10 are solely for the benefit of
the Agent and the Lenders, and neither Holdings, the Borrower nor any of their
respective Subsidiaries shall have any rights as a third party beneficiary of
any of the provisions hereof (other than Sections 10.9 and 10.10(c)). In
performing its functions and duties under this Credit Agreement, the Agent shall
act solely as agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligation toward or relationship
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of agency or trust with or for Holdings, the Borrower or any of their respective
Subsidiaries.
10.2 NATURE OF DUTIES OF AGENT. The Agent shall not have duties or
responsibilities except those expressly set forth in this Credit Agreement and
the other Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Credit Agreement or the other Credit Documents a fiduciary relationship in
respect of any Lender; and nothing in this Credit Agreement or the other Credit
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Credit Agreement or the
other Credit Documents except as expressly set forth herein or therein.
10.3 LACK OF RELIANCE ON AGENT. (a) Independently and without
reliance upon the Agent, each Lender, to the extent it deems appropriate, has
made and shall continue to make (i) its own independent investigation of the
financial or other condition and affairs of Holdings, the Borrower and their
respective Subsidiaries in connection with the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of Holdings, the Borrower and their respective Subsidiaries, and, except as
expressly provided in this Credit Agreement, the Agent shall not have any duty
or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Revolving Loans or at any time or
times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement or the other
Credit Documents or the financial or other condition of Holdings, the Borrower
or any of their respective Subsidiaries. The Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Credit Agreement or the other Credit
Documents, or the financial condition of Holdings, the Borrower or any of their
respective Subsidiaries, or the existence or possible existence of any Default
or Event of Default, unless specifically requested to do so in writing by any
Lender.
10.4 CERTAIN RIGHTS OF THE AGENT. The Agent shall have the right to
request instructions from the Required Lenders at any time. If the Agent shall
request instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Credit Agreement or the
other Credit Documents, the Agent shall
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be entitled to refrain from such act or taking such action unless and until the
Agent shall have received instructions from the Required Lenders, and the Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
hereunder in accordance with the instructions of the Required Lenders.
10.5 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other documentary, teletransmission or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person. The Agent may consult with legal counsel (including
counsel for Holdings and the Borrower with respect to matters concerning
Holdings, the Borrower and their respective Subsidiaries), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
10.6 INDEMNIFICATION OF AGENT. To the extent the Agent is not
reimbursed and indemnified by Holdings or the Borrower, each Lender will
reimburse and indemnify the Agent, in proportion to its respective Commitment,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever (including
all Expenses) which may be imposed on, incurred by or asserted against the Agent
in performing its duties hereunder, in any way relating to or arising out of
this Credit Agreement; PROVIDED, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct. The agreements contained in this
Section shall survive any termination of this Credit Agreement and the other
Credit Documents and the payment in full of the Obligations.
10.7 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Credit Agreement, the Loans made by it and the
Revolving Notes issued to it, and its participation in Letters of Credit issued
hereunder, the Agent shall have the same rights and powers hereunder as any
other Lender or holder of a Revolving Note or participation interests and may
exercise the same as though it was not performing the duties specified herein;
and the terms "Lenders", "Required Lenders", "holders of Revolving Notes", or
any similar terms shall, unless the context clearly otherwise indicates, include
the Agent in its individual capacity. The Agent may accept deposits from, lend
money to, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory or other business with Holdings or Borrower
or any Affiliate thereof as if it were not performing the duties specified
herein, and may accept fees and other consideration
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from Borrower for services in connection with this Credit Agreement and
otherwise without having to account for the same to the Lenders.
10.8 HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Revolving Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed with
the Agent. Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder of any
Revolving Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Revolving Note or of any Revolving Note or
Revolving Notes issued in exchange therefor.
10.9 SUCCESSOR AGENT. (a) The Agent may, upon five Business Days'
notice to the Lenders and the Borrower, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this Section
10.9) by giving written notice thereof to the Lenders and the Borrower. Such
resignation of the Agent shall also operate as a resignation as Payments
Administrator. Upon any such resignation, the Required Lenders shall have the
right, upon five days' notice and written approval by the Borrower (which
approval shall not be unreasonably withheld), to appoint a successor Agent. If
no successor Agent (i) shall have been so appointed by the Required Lenders, and
(ii) shall have accepted such appointment, within thirty days after the retiring
Agent's giving of notice of resignation, then, upon five days' notice, the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent. In the
event that no successor Agent is appointed pursuant to the foregoing provisions,
the Agent's resignation shall become effective on the date which is forty-five
days after the retiring Agent's giving of notice of resignation, and the
Required Lenders shall perform the duties of the Agent hereunder.
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
10.10 COLLATERAL MATTERS. (a) Each Lender authorizes and directs the
Collateral Agent to enter into the Collateral Documents for the benefit of the
Lenders. Each Lender hereby agrees, and each holder of any Revolving Note or
participant in Letters of Credit by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any action taken by the
Required Lenders in accordance with the provisions of this Credit Agreement or
the Collateral Documents, and the exercise by the Required Lenders of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders.
The
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Collateral Agent is hereby authorized on behalf of all of the Lenders, without
the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Collateral Documents which may be necessary to perfect and
maintain perfected the security interest in and liens upon the Collateral
granted pursuant to the Collateral Documents.
(b) The Lenders hereby authorize the Collateral Agent, at its option
and in its discretion, upon the direction of the Agent to release any Lien
granted to or held by the Collateral Agent upon any Collateral (i) upon
termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Credit Agreement or
the Credit Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the proceeds of
such sale by the Collateral Agent in compliance with Section 8.1 hereof or (iii)
if approved, authorized or ratified in writing by the Required Lenders, unless
such release is required to be approved by all of the Lenders hereunder. Upon
request by the Agent at any time, the Lenders will confirm in writing the
Collateral Agent's authority to release particular types or items of Collateral
pursuant to this Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, and upon
at least five (5) Business Days' (or such shorter period as is acceptable to the
Collateral Agent) prior written request by the Borrower, the Collateral Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Collateral Agent for the benefit of the Lenders herein or pursuant hereto
upon the Collateral that was sold or transferred; PROVIDED, that (i) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent's opinion, would expose the Collateral Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse, representation or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of Holdings, the Borrower or any of their
respective Subsidiaries in respect of) all interests retained by Holdings, the
Borrower or any of their respective Subsidiaries, including, without limitation,
the proceeds of the sale, all of which shall continue to constitute part of the
Collateral. In the event of any foreclosure or similar enforcement action with
respect to any of the Collateral, the Collateral Agent shall be authorized to
deduct all of the Expenses reasonably incurred by the Collateral Agent from the
proceeds of any such sale, transfer or foreclosure.
(d) The Collateral Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or is owned
by Holdings, the Borrower or any of their respective Subsidiaries or is cared
for, protected or insured or that the Liens granted to the Collateral Agent
herein or pursuant hereto have been properly or
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sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Collateral Agent
in this Section 10.10 or in any of the Collateral Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Collateral Agent's own interest
in the Collateral as one of the Lenders and that the Collateral Agent shall have
no duty or liability whatsoever to the Lenders, except for its gross negligence
or willful misconduct.
10.11 ACTIONS WITH RESPECT TO DEFAULTS. In addition to the Agent's
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such action with respect to an Event of Default
as shall be directed by the Required Lenders; PROVIDED, that until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
10.12 DELIVERY OF INFORMATION. The Agent shall not be required to
deliver to any Lender originals or copies of any documents, instruments,
notices, communications or other information received by the Agent from
Holdings, the Borrower, any Subsidiary, the Required Lenders, any Lender or any
other Person under or in connection with this Credit Agreement or any other
Credit Document except (i) as specifically provided in this Credit Agreement or
any other Credit Document and (ii) as specifically requested from time to time
in writing by any Lender with respect to a specific document, instrument, notice
or other written communication received by and in the possession of the Agent at
the time of receipt of such request and then only in accordance with such
specific request.
ARTICLE 11.
MISCELLANEOUS
11.1 SUBMISSION TO JURISDICTION; WAIVERS. Each of Holdings and the
Borrower hereby irrevocably and unconditionally:
(a) Submits for itself and its property in any legal action or
proceeding relating to this Credit Agreement and the other Credit Documents
to which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York located in New York City, the Courts of the United
States of America for the Southern District of New York and appellate
courts from any thereof;
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(b) Consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) Designates, appoints and empowers CT Corporation as its designee,
appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent
shall cease to be available to act as such, the Borrower agrees to
designate a new designee, appointee and agent in New York City on the terms
and for the purposes of this provision satisfactory to the Agent under this
Credit Agreement and the other Credit Documents.
(d) Agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Holdings
or the Borrower, as applicable, at its address set forth in Section 11.5 or
at such other address of which the Agent shall have been notified pursuant
thereto;
(e) Agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction;
(f) To the extent permitted by law, waives the right to assert any
setoff, counterclaim or cross-claim in respect of, and all statutes of
limitations which may be relevant to, such action or proceeding (other than
compulsory counterclaims), PROVIDED that nothing in this clause (f) shall
preclude a separate action asserting any such claims; and
(g) Waives due diligence, demand, presentment and protest and any
notices thereof as well as notice of nonpayment.
11.2 WAIVER OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENT, THE
ISSUING BANK AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT
DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
11.3 GOVERNING LAW. The validity, interpretation and enforcement of
this Credit Agreement shall be governed by the laws of the State of New York.
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11.4 DELAYS: PARTIAL EXERCISE OF REMEDIES. No delay or omission of
the Agent, the Issuing Bank or the Lenders to exercise any right or remedy
hereunder, whether before or after the happening of any Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such Event of Default. No single or partial exercise by the Agent, the Issuing
Bank or the Lenders of any right or remedy shall preclude any other or further
exercise thereof, or preclude any other right or remedy.
11.5 NOTICES. Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to the Agent, or any of the Lenders, then to BTCC,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, if to
Holdings or the Borrower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: President with a second copy to General Counsel at the same address,
or by facsimile transmission, promptly confirmed in writing sent by first class
mail, if to the Agent, or any of the Lenders, at (▇▇▇) ▇▇▇-▇▇▇▇, if to Holdings
or the Borrower at (▇▇▇) ▇▇▇-▇▇▇▇. All such notices and correspondence shall be
deemed given when received by the party to whom sent.
11.6 BENEFIT OF AGREEMENT. (a) This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, PROVIDED that the Borrower may not assign or
transfer any of its interests hereunder, without the prior written consent of
the Lenders and PROVIDED FURTHER that the rights of each Lender to transfer,
assign or grant participations in its rights and/or obligations hereunder shall
be limited as set forth below in this Section 11.6, PROVIDED that nothing in
this Section 11.6 shall prevent or prohibit any Lender from pledging its rights
under this Credit Agreement and/or its Revolving Loans and/or Revolving Notes
hereunder to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank.
(b) Each Lender shall have the right to transfer, assign or grant
participations in all or any part of its remaining rights and obligations
hereunder on the basis set forth below in this clause (b).
(A) ASSIGNMENTS. Each Lender may assign pursuant to an Assignment and
Assumption Agreement substantially in the form of Exhibit S-1 hereto all or
a portion of its rights and obligations hereunder pursuant to this clause
(b)(A) to (x) one or more Lenders or (y) one or more other Eligible
Transferees, PROVIDED that any such assignment pursuant to clause (y) above
shall be in the aggregate amount of at least $5,000,000, and shall require
the consents of the Agent, the Issuing Bank and the Borrower, which
consents shall not be unreasonably withheld. Any assignment to another
Lender pursuant to this clause (b)(A) will become effective upon the
payment to the Payments Administrator by either the assigning or the
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assignee Lender of a nonrefundable assignment fee of $5,000 and the
recording by the Payments Administrator of such assignment, and the
resultant effects thereof on the Revolving Loans and Commitments of the
assigning Lender and the assignee Lender, in a register maintained by the
Payments Administrator as agent of the Borrower for this purpose (the
"Register"), the Payments Administrator hereby agreeing to effect such
recordation no later than five Business Days after its receipt of a written
notification by the assigning Lender and the assignee Lender of the
proposed assignment. Assignments pursuant to clause (b)(A) (y) will only
be effective if the Payments Administrator shall have received a written
notice in the form of Exhibit S-2 hereto from the assigning Lender and the
assignee and payment of a nonrefundable assignment fee of $5,000 to the
Payments Administrator by either the assigning Lender or the assignee. No
later than five Business Days after its receipt of such written notice, the
Payments Administrator will record such assignment, and the resultant
effects thereof on the Revolving Loans and Commitment of the assigning
Lender, in the Register, at which time such assignment shall become
effective. Notwithstanding the foregoing, the Payments Administrator shall
not be required to, and shall not, record any assignment in the Register on
or after the date on which any proposed amendment, modification or
supplement in respect of this Credit Agreement has been circulated to the
Lenders for approval until the earlier of (x) the effectiveness of such
amendment, modification or supplement in accordance with Section 11.10 or
(y) 30 days following the date on which such proposed amendment,
modification or supplement was circulated to the Lenders. Upon the
effectiveness of any assignment pursuant to clause (b)(A)(y), (x) the
assignee will become a "Lender" for all purposes of this Credit Agreement
and the other Credit Documents with Revolving Loans and a Commitment as so
recorded by the Payments Administrator in the Register, and to the extent
of such assignment, the assigning Lender shall be relieved of its
obligations hereunder with respect to the portion of its Commitment being
assigned and (y) if such assignment occurs after the Closing Date, the
Borrower shall issue new Revolving Notes (in exchange for the Revolving
Note or Revolving Notes of the assigning Lender) to the assigning Lender
(to the extent such Lender's Commitment is not reduced to zero as a result
of such assignment) and to the assignee Lender, in each case to the extent
requested by the assigning Lender or assignee Lender, as the case may be,
to the extent needed to reflect the revised Commitments of such Lenders.
The Payments Administrator will (x) notify the Issuing Bank with respect to
outstanding Letters of Credit within 5 Business Days of the effectiveness
of any assignment hereunder and (y) prepare on the last Business Day of
each calendar quarter during which an assignment has become effective
pursuant to this clause (b)(A) a new Schedule I giving effect to all such
assignments effected during such quarter and will promptly provide same to
the Borrower and each of the Lenders. To the extent that an assignment of
all or any portion of a Lender's rights and obligations hereunder would, at
the time of such
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assignment, result in increased payment obligations under Section 2.9, 4.5
or 4.10 from those being charged by the respective assigning Lender prior
to such assignment, then the Borrower shall not be obligated to pay such
increased amounts (although the Borrower shall be obligated to pay any
other increased amounts of the type described above resulting from changes
after the date of the respective assignment). The Borrower agrees to
indemnify the Payment Administrator from and against any and all losses,
claims, damages and liabilities of whatsoever nature which may be imposed
on, asserted against or incurred by the Agent in performing its duties
under this Section 11.6 other than those resulting from the Agent's willful
misconduct or gross negligence.
(B) PARTICIPATIONS. Each Lender may transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder pursuant to this clause (b)(B) to any Eligible
Transferee, PROVIDED that (i) such Lender shall remain a "Lender" for all
purposes of this Credit Agreement and the transferee of such participation
shall not constitute a Lender hereunder, (ii) no participant under any such
participation shall have rights to approve any amendment to or waiver of
this Credit Agreement or any other Credit Document except to the extent
such amendment or waiver would (x) extend the final scheduled maturity of
any of the Revolving Loans or the Commitment in which such participant is
participating (it being understood that a waiver of a mandatory reduction
in the Total Commitments or the waiver of the application of any prepayment
to the Revolving Loans shall not constitute the extension of the final
scheduled maturity of any Revolving Loan or Commitment), (y) reduce the
interest rate (other than as a result of waiving the applicability of any
post-default increases in interest rates) or Fees applicable to any of the
Revolving Loans, Commitments or Letters of Credit or postpone the payment
or reduce the amount thereof or (z) release all or substantially all of the
Collateral (except as expressly provided in the Credit Documents) and (iii)
the Borrower, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. In the case of any such participation,
the participant shall not have any rights under this Credit Agreement or
any of the other Credit Documents (the participant's rights against the
granting Lender in respect of such participation to be those set forth in
the agreement with such Lender creating such participation) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had
not sold such participation, PROVIDED that such participant shall be
entitled to receive additional amounts under Sections 2.9, 2.10, 4.5 and
4.10 on the same basis as if it were a Lender to the extent that the Lender
granting such participation would be entitled to such benefits if the
participation had not been made. In addition, each agreement creating any
participation must include an agreement by the participant to be bound by
the provisions of Section 11.7 of this Credit Agreement.
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(c) Notwithstanding any other provisions of this Section 11.6, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) If any Lender becomes a Defaulting Lender, or upon the occurrence
of any event giving rise to the operation of Section 2.9, 4.3(c)(ii) or 4.10
with respect to such Lender (and not other Lenders generally), the Borrower
shall have the right, with the consents of the Agent and the Issuing Bank (which
consents shall not be unreasonably withheld) if no Default or Event of Default
then exists, to replace such Lender (the "Replaced Lender") with one or more
Eligible Transferees (collectively, the "Replacement Lender"), PROVIDED that (i)
at the time of any replacement pursuant to this Section 11.6(d), the Replacement
Lender shall enter into one or more Assignment and Assumption Agreements
pursuant to Section 11.6(b)(A) (and with all fees payable pursuant to said
Section 11.6(b)(A) to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Commitments and outstanding
Revolving Loans of, and participations in Letters of Credit by, the Replaced
Lender and, in connection therewith, shall pay to (x) the Replaced Lender in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Revolving Loans of
the Replaced Lender, (B) an amount equal to all drawings under Letters of Credit
that have been funded by (and not reimbursed to) such Replaced Lender, together
with all then unpaid interest with respect thereto at such time, (C) an amount
equal to the increased costs incurred by the Borrower and owing to the Replaced
Lender pursuant to Sections 2.9 and 4.10 and (D) an amount equal to all accrued,
but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Article 4
and (y) the Issuing Bank the amount of all unreimbursed drawings under Letters
of Credit attributable to such Replaced Lender and (ii) all obligations of the
Borrower owing to the Replaced Lender (other than those specifically described
in clause (i) above in respect of which the assignment purchase price has been,
or is concurrently being, paid) shall be paid in full by the Borrower to such
Replaced Lender concurrently with such replacement. Upon the execution of the
respective Assignment and Assumption Agreements the payment of amounts referred
to in clauses (i) and (ii) above the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder,
except with respect to indemnification provisions under this Credit Agreement,
which shall survive as to such Replaced Lender.
(e) Each Lender initially party to this Credit Agreement hereby
represents, and each Person that becomes a Lender pursuant to an assignment
permitted by the preceding clause (b)(A) will upon its becoming party to this
Credit Agreement represent, that it is an Eligible Transferee which makes or
acquires loans in the ordinary course of its business and that it will make or
acquire Revolving Loans for its own account in the ordinary course of such
business, PROVIDED that subject to the preceding clauses (a) through
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(d), the disposition of any promissory notes or other evidences of or interests
in Indebtedness held by such Lender shall at all times be within its exclusive
control.
11.7 CONFIDENTIALITY. Subject to Section 11.6, the Lenders shall hold
all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by Holdings or the Borrower in
accordance with such Lenders' customary procedure for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure to its Affiliates, employees,
auditors, advisors, or counsel or as reasonably required by any BONA FIDE actual
or potential transferee or participant in connection with the contemplated
transfer of any Revolving Loans or participation therein (so long as such
transferee or participant agrees to be bound by the provisions of this Section
11.7) or as required or requested by any governmental agency or representative
thereof or pursuant to legal process, PROVIDED that, unless specifically
prohibited by applicable law or court order, each Lender shall notify Holdings
or the Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information, and
provided further that in no event shall any Lender be obligated or required to
return any materials furnished by Holdings, the Borrower or any Subsidiaries.
11.8 INDEMNIFICATION. (a) Each of Holdings and the Borrower shall,
jointly and severally, and hereby agrees to jointly and severally, indemnify,
defend and hold harmless the Agent, each Issuing Bank and each of the Lenders
and their respective directors, officers, agents and employees (the
"Indemnitee") from and against (x) any and all losses, claims, damages,
liabilities or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from the gross negligence or
willful misconduct of the respective Indemnitee) arising out of or by reason of
any litigations, investigations, claims or proceedings which arise out of or are
in any way related to (i) this Credit Agreement, the other Credit Documents or
the transactions contemplated thereby, (ii) the issuance of the Letters of
Credit, (iii) any actual or proposed use by the Borrower of the proceeds of the
Revolving Loans or (iv) the Agent's or the Lenders' entering into this Credit
Agreement, the other Credit Documents or any other agreements and documents
relating hereto, including, without limitation, amounts paid in any settlement
agreed to by Holdings or the Borrower, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection with any
of the foregoing (whether or not such lender is a party thereto) and (y) any
such losses, claims (including Environmental Claims), damages, liabilities,
deficiencies, judgments, fees and disbursements (including reasonable attorneys'
and consultants' fees and disbursements) or expenses incurred in connection with
any removal, remedial or other action taken by Borrower or any of the Lenders
(except to the extent resulting from the gross negligence
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or willful misconduct of the respective Indemnitee) in connection with
compliance by Holdings, the Borrower or any of their respective Subsidiaries, or
any of their respective properties, with any Environmental Laws or the actual or
alleged presence of Hazardous Materials on any property of the Borrower.
(b) If and to the extent that the Obligations of either Holdings or
the Borrower under this Section 11.8 are unenforceable for any reason, each of
Holdings and the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such Obligations which is permissible under
applicable law. Each of Holdings' and the Borrower's Obligations hereunder
shall survive any termination of this Credit Agreement and the other Credit
Documents and the payment in full of the Obligations, and are in addition to,
and not in substitution of, any other of their Obligations set forth in this
Credit Agreement.
(c) In addition, each of Holdings and the Borrower shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the reasonable
fees and disbursements of counsel and other professionals) paid or incurred by
the Agent or such Lender in (i) enforcing or defending its rights under or in
respect of this Credit Agreement, the other Credit Documents or any other
document or instrument now or hereafter executed and delivered in connection
herewith, (ii) in collecting the Revolving Loans, (iii) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (iv) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
11.9 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Credit Agreement
and the other Credit Documents constitute the entire agreement among Holdings,
the Borrower, the Agent and the Lenders, supersedes any prior agreements among
them, and shall bind and benefit Holdings, the Borrower, the Agent and the
Lenders and their respective successors and permitted assigns.
11.10 AMENDMENT OR WAIVER. Neither this Credit Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties thereto and the Required
Lenders, PROVIDED that no such change, waiver, discharge or termination shall,
without the consent of each Lender (other than a Defaulting Lender) affected
thereby, (i) extend the final scheduled maturity of any Revolving Loan or
Revolving Note (it being understood that any waiver of the application of any
prepayment or the method of application of any prepayment to the Revolving Loans
or any mandatory reduction to the Total Commitments shall not constitute an
extension of the final maturity date of such Revolving Loans), or reduce the
rate (other than as a result of waiving the applicability of any post-default
increases in interest rates) or extend the time of payment of interest or Fees
thereon, or reduce the amount thereof, or increase the Commitment of any Lender
over the amount thereof then in effect (it being understood that
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waivers or modifications of conditions precedent, covenants, Defaults or Events
of Default or of a mandatory reduction in the Total Commitment shall not
constitute an increase in the available portion of any Commitment of any Lender,
and that an increase in the available portion of any Commitment of any Lender
shall not constitute an increase in the Commitment of such Lender), (ii) release
all or substantially all of the Collateral (except as expressly provided in the
Credit Documents), (iii) amend, modify or waive any provision of this Section
11.10, (iv) reduce the percentage specified in the definition of Required
Lenders or change the percentage of holders of Commitments or the aggregate
unpaid principal amount of the Revolving Loans which shall be required for the
Lenders for any of them to take action under this Credit Agreement or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under any Credit Document. No provision of Article 3 or 10 may be
amended without the consent of each Issuing Bank or the Agent, respectively.
11.11 NONLIABILITY OF AGENT AND LENDERS. The relationship between
Holdings, the Borrower and their respective Subsidiaries, on the one hand, and
the Lenders and the Agent, on the other hand, shall be solely that of debtors
and creditors. None of the Agent or any Lender shall have any fiduciary
responsibilities to Holdings, the Borrower, or any of their respective
Subsidiaries. None of the Agent or any Lender undertakes any responsibility to
Holdings, the Borrower, or any of their respective Subsidiaries to review or
inform Holdings, the Borrower, or any of their respective Subsidiaries of any
matter in connection with any phase of the business or operations of Holdings,
the Borrower, or any of their respective Subsidiaries.
11.12 INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable at
any time hereunder to each Lender under such Lender's Revolving Note or Notes
shall be a separate and independent debt.
11.13 COUNTERPARTS. This Credit Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
11.14 EFFECTIVENESS. This Credit Agreement shall become effective on
the date (the "Effective Date") on which all of the parties hereto shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Agent pursuant to Section 11.5 or, in the case of the
Lenders, shall have given to the Agent written, telecopied or telex notice
(actually received) at such office that the same has been signed and mailed to
it.
11.15 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Credit Agreement, and the Table of Contents, are inserted
for
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convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.16 MAXIMUM RATE. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement or in any other Credit Document,
the Borrower, the Agent and the Lenders hereby agree that all agreements among
them under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly limited
so that in no contingency or event whatsoever shall the amount paid, or agreed
to be paid, to the Agent or any Lender for the use, forbearance, or detention of
the money loaned to the Borrower and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance and
Lender should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding hereunder or
on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the Borrower. All sums paid or agreed to be paid to
the Agent or any Lender for the use, forbearance, or detention of the
Obligations and other Indebtedness of the Borrower to the Agent or any Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Indebtedness until payment
in full so that the actual rate of interest on account of all such Indebtedness
does not exceed the Highest Lawful Rate throughout the entire term of such
Indebtedness. The terms and provisions of this Section 11.16 shall control
every other provision of this Credit Agreement and all agreements among the
Borrower, the Agent and the Lenders.
11.17 RIGHT OF SETOFF. In addition to and not in limitation of all
rights of offset that any Lender or the Issuing Bank may have under applicable
law, each Lender and the Issuing Bank shall, upon the occurrence of any Event of
Default and whether or not such Lender or such Issuing Bank has made any demand
or the Obligations of any Credit Party are matured, have the right, upon prior
notice to Holdings or the Borrower, to appropriate and apply to the payment of
the Obligations of Holdings or the Borrower or any of their respective
Subsidiaries all deposits (general or special, time or demand, provisional or
final) then or thereafter held by and other Indebtedness or property then or
thereafter owing by such Lender or such Issuing Bank, including, without
limitation, any and all amounts in the BT Account, the Concentration Account or
the Disbursement Account. Each Lender or the Issuing Bank exercising such
rights shall notify the Agent thereof and
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any amount received as a result of the exercise of such rights shall be
reallocated among the Lenders and the Issuing Bank as set forth in Section 2.10
hereof provided, however, that failure of the Borrower to receive such notice
shall not impair any Lender's or the Issuing Bank's rights hereunder.
11.18 OTHER CREDIT DOCUMENTS. The Lenders hereby authorize the Agent
and the Collateral Agent to enter into the various Credit Documents attached as
exhibits to the Agreement on their behalf, and acknowledge and agree that they
are subject to the terms of the Intercreditor Agreement.
11.19 CERTAIN PROVISIONS REGARDING PERFECTION OF SECURITY INTERESTS.
Notwithstanding anything to the contrary contained in this Credit Agreement or
any of the other Credit Documents, the Lenders acknowledge and agree that,
except to the extent that further actions are required to be taken in accordance
with the terms of Section 7.13 of this Credit Agreement, (i) with respect to
Non-Certificated Units from time to time held by the Unit Subsidiary,
certificates of title have not been issued with respect thereto and,
accordingly, no notation of a security interest has been made under the titling
statutes of any State in connection therewith and (ii) with respect to Units (as
defined in the Security Agreement) from time to time leased to customers,
"fixture filings" will not be made under the provisions of the Uniform
Commercial Code as in effect in the relevant State, both because of the
administrative difficulty of ascertaining whether any such Unit is or becomes a
fixture and the inability of the Borrower and its Subsidiaries to provide the
relevant information which would be required to make such filings.
Notwithstanding the last sentence of Section 7.13, if the Borrower or any of its
Subsidiaries becomes aware that a Certificate of Title is required to be issued
with respect to any Non-Certificated Unit under applicable state law, the
Borrower shall take all steps as may be necessary so that a certificate of title
is issued with respect thereto, on which the security interest of the Collateral
Agent is noted. Furthermore, in the event the Agent or the Required Lenders
reasonably believes that Certificates of Title may be required to be issued in
connection with Non-Certificated Units located in any State, the Borrower shall
promptly (and in any event within 30 days after its receipt of the respective
request) following a request by the Agent or the Required Lenders, cause special
counsel or special counsels designated by it (who shall be reasonably acceptable
to the Agent or the Required Lenders) to issue, with respect to the laws of a
requested State or States, an opinion in form reasonably satisfactory to the
Agent and the Required Lenders as to whether Certificates of Title are required
to be issued with respect to any Non-Certificated Units under the laws of such
State or States and, whether based thereon or upon the advice of their own
counsel, if at any time the Agent or the Required Lenders inform the Borrower
that they in good faith believe that Certificates of Title are required to be
issued with respect to any Non-Certificated Unit under applicable state law and
further request that the actions described in this sentence be taken, then the
Borrower shall take all steps as may be necessary so that, within 90 days from
the date of the respective request, a certificate of title is issued with
respect thereto,
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on which the security interest of the Collateral Agent is noted; PROVIDED that
unless an Event of Default has occurred and is continuing, the Agent or the
Required Lenders shall not, in any event, request an opinion with respect to any
one State more than once in a calendar year. So long as Sections 7.18(a) and
8.11 of this Credit Agreement are complied with, the provisions of this Credit
Agreement and the other Credit Documents shall be deemed modified to the extent
necessary to permit the foregoing (and so that no violation of this Credit
Agreement or the other Credit Documents exists or shall exist as a result of the
actions permitted to be taken (or not taken) in accordance with the provisions
of preceding clauses (i) and (ii) of the first sentence of this Section 11.19
unless and until (and then to the extent) required to be taken in accordance
with the two preceding sentences) (including, without limitation, all conditions
precedent, representations, warranties, covenants and other agreements herein
and therein).
11.20 POST CLOSING ACTIONS. Notwithstanding anything to the contrary
contained in this Credit Agreement or the other Credit Documents, the parties
hereto acknowledge and agree that:
(a) MORTGAGES; TITLE INSURANCE; SURVEYS; ETC. The Borrower was
not required to satisfy the conditions precedent set forth in Section 5.1(z) on
the Closing Date. Such conditions precedent shall be satisfied in full not
later than the 90th day after the Closing Date. By such date, the Borrower
shall have (i) executed, acknowledged and delivered to the Agent Mortgages for
those Mortgaged Properties for which Mortgages were not executed, acknowledged
and delivered by the Borrower on the Closing Date and taken all other actions
required by Section 5.1(z)(i) related to such Mortgages, (ii) delivered, or
caused to be delivered, to the Collateral Agent Mortgage Policies in form and
substance satisfactory to the Collateral Agent, which Mortgage Policies shall
comply with the requirements of Section 5.1(z)(ii), and (iii) delivered, or
caused to be delivered, to the Collateral Agent surveys in form and substance
satisfactory to the Collateral Agent in connection with the Mortgaged
Properties, which surveys shall comply with the requirements of Section
5.1(z)(iii).
(b) UNIT CERTIFICATES. The Borrower and its Subsidiaries were
not required to satisfy the condition precedent set forth in Section 5.1(d)(C)
on the Closing Date. Such condition precedent shall be satisfied in full not
later than the 90th day after the Closing Date. By such date, the Borrower
shall have provided evidence that, with respect to all Certificated Units of the
Borrower and its Subsidiaries, either (x) a notation of the security interest of
the Collateral Agent has been made on the certificate of title with respect
thereto which notation shall, under applicable state law, perfect the Collateral
Agent's security interest therein or (y) an unqualified opinion of counsel
satisfactory to the Agent to the effect that such notation of a security
interest on the relevant certificate of title
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under applicable state law is not required to perfect the security interests
therein created pursuant to the Security Agreement.
(c) AUTOMOBILES AND TRUCKS. The Borrower was not required to
take steps necessary to perfect the security interests purported to be created
by the Security Agreement in automobiles and trucks. The Collateral Agent or
the Required Lenders at any time may, but shall not be required to, request that
the Borrower and/or any of its Subsidiaries take any and all actions with
respect to such automobiles and/or trucks necessary to create a first priority
perfected lien of the Collateral Agent on any automobiles or trucks pledged
pursuant to the Security Agreement.
(d) UCC FILINGS AND FILINGS WITH RESPECT TO INTELLECTUAL
PROPERTY. Holdings, the Borrower and their respective Subsidiaries were not
required to have filed (or cause to have filed) Financing Statements (Form
UCC-1) or any filings with the United States Patent and Trademark Office or the
United States Copyright Office necessary to perfect the security interest
purported to be created by the Security Agreement. Not later then the tenth day
after the Closing Date, Holdings, the Borrower and their respective Subsidiaries
shall have filed (or cause to have filed) all of such Financing Statements (Form
UCC-1) and any filings with the United States Patent and Trademark Office or the
United States Copyright Office necessary to perfect the security interest
purported to be created by the Security Agreement.
(e) The Borrower was not required to satisfy the conditions
precedent set forth in Section 5.1(aa) on the Closing Date. Such conditions
precedent shall be satisfied in full not later than the 10th day after the
Closing Date. By such date, First Trust National Association on behalf of the
holders of Senior Secured Notes, Mobile Field Office Company, the Unit
Subsidiary, the Borrower and B of A, as the Depositary, shall have entered into
one or more Deposit Account Agreements.
All provisions of this Credit Agreement and the other Credit Documents
(including, without limitation, all conditions precedent, representations,
warranties, covenants and other agreements herein and therein) shall be deemed
modified to the extent necessary to effect the foregoing (and to permit the
taking of the actions described above within the time periods, or in the case of
preceding clause (c) to the extent, required above, rather than as otherwise
provided in the Credit Documents); PROVIDED, that (x) to the extent any
representation and warranty would not be true because the foregoing actions were
not taken on the Closing Date, the respective representation and warranty shall
be required to be true and correct in all material respects at the time the
respective action is taken (or was required to be taken) in accordance with the
foregoing provisions of Section 11.20 and (y) all representations and warranties
relating to the Collateral Documents shall be required to be true immediately
after the actions required to be taken by Section 11.20 have been taken (or were
required to be taken). The acceptance of the benefits of each Credit Event
shall
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constitute a representation, warranty and covenant by the Borrowers to each of
the Lenders that the actions required pursuant to this Section 11.20 will be, or
have been, taken within the relevant time periods referred to in this Section
11.20 and that, at such time, all representations and warranties contained in
this Credit Agreement and the other Credit Documents shall then be true and
correct without any modification pursuant to this Section 11.20, the parties
hereto acknowledge and agree that the failure to take any of the actions
required above, within the relevant time periods required above, shall give rise
to an immediate Event of Default pursuant to this Credit Agreement.
ARTICLE 12.
HOLDINGS SECURED GUARANTY
12.1 THE HOLDINGS SECURED GUARANTY. In order to induce the Agent, the
Issuing Bank and the Lenders to enter into this Credit Agreement and to extend
credit hereunder and in recognition of the direct benefits to be received by
Holdings from the proceeds of the Revolving Loans and the issuance of the
Letters of Credit, Holdings hereby agrees with the Agent, the Issuing Bank and
the Lenders as follows: Holdings hereby unconditionally and irrevocably
guarantees the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all Obligations of the Borrower to the
Agent, the Issuing Bank and the Lenders hereunder. If any or all of the
Obligations of the Borrower to the Agent, the Issuing Bank and the Lenders
becomes due and payable hereunder, Holdings unconditionally promises to pay such
Obligations to the Agent, the Issuing Bank and the Lenders, or order, on demand,
together with any and all reasonable expenses which may be incurred by the
Agent, the Issuing Bank or the Lenders in collecting any of the Obligations.
This guaranty constitutes a guaranty of payment and not of collection, and
applies to all Obligations of the Borrower arising in connection with this
Credit Agreement and the other Credit Documents, in each case, heretofore, now,
or hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether or not such Obligations are from time to time reduced, or extinguished
and thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
Obligations may be or hereafter become barred by any statute of limitations, and
whether or not such Obligations may be or hereafter become otherwise
unenforceable.
12.2 BANKRUPTCY. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all Obligations of the Borrower to
the Agent, the Issuing Bank and the Lenders whether or not due or payable by the
Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 9.1(e), and uncondi-
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tionally and irrevocably promises to pay all such Obligations to the Agent, the
Issuing Bank and the Lenders, or order, on demand, in lawful money of the United
States.
12.3 NATURE OF LIABILITY. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Obligations of the Borrower whether executed by Holdings, any other guarantor or
by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agent, the Issuing Bank or the Lenders on the Obligations which such Agent, the
Issuing Bank or such Lender repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
12.4 INDEPENDENT OBLIGATION. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against Holdings
whether or not action is brought against any other guarantor or the Borrower and
whether or not any other guarantor or the Borrower be joined in any such action
or actions. Holdings waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall, to the
fullest extent permitted by law, operate to toll the statute of limitations as
to Holdings.
12.5 AUTHORIZATION. Holdings authorizes the Agent, the Issuing Bank
and the Lenders without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) subject to the prior agreement of the Borrower (to the extent
required by the Credit Agreement), change the manner, place or terms of
payment of, and/or change or extend the time of payment of, renew,
increase, accelerate or alter, any of the Obligations (including any
increase or decrease in the rate of interest thereon), any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the Holdings Secured Guaranty herein made shall apply to the
Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Obligations and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and
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in any order any property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Obligations, any security therefor
or any liability (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or
not) of the Borrower to its creditors other than the Agent, the Issuing
Bank and the Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Agent, the Issuing Bank and
the Lenders regardless of what liability or liabilities of Holdings or the
Borrower remain unpaid; and/or
(g) consent to or waive any breach of, or any act, omission or default
under, this Credit Agreement or any of the instruments or agreements
referred to herein, or otherwise, with the agreement of the Borrower,
amend, modify or supplement this Credit Agreement or any of such other
instruments or agreements.
12.6 RELIANCE. It is not necessary for the Agent, the Issuing Bank or
the Lenders to inquire into the capacity or powers of the Borrower or its
Subsidiaries or the officers, directors, partners or agent acting or purporting
to act on its behalf, and any Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
12.7 SUBORDINATION. Any Obligations of the Borrower now or hereafter
owing to Holdings is hereby subordinated in right of payment to the Obligations
of the Borrower owing to the Agent, the Issuing Bank and the Lenders; PROVIDED
that payment may be made by the Borrower on any such Obligations owing to
Holdings so long as the same is not prohibited by this Credit Agreement; and
PROVIDED FURTHER, that if the Agent so requests at a time when an Event of
Default exists, all such Obligations of the Borrower to Holdings shall be
collected, enforced and received by Holdings as trustee for the Agent, the
Issuing Bank and the Lenders and be paid over to the Agent, the Issuing Bank and
the Lenders on account of the Obligations of the Borrower to the Agent, the
Issuing Bank and
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the Lenders, but without affecting or impairing in any manner the liability of
Holdings under the other provisions of this Holdings Secured Guaranty. Prior to
the transfer by Holdings of any note or negotiable instrument evidencing any
Obligations of the Borrower to Holdings, Holdings shall ▇▇▇▇ such note or
negotiable instrument with a legend that the same is subject to this
subordination.
12.8 WAIVER. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Agent, the
Issuing Bank or the Lenders to (i) proceed against the Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from the Borrower, any other guarantor or any other party or (iii) pursue any
other remedy in the Agent's, the Issuing Bank's or the Lenders' power
whatsoever. Holdings waives any defense based on or arising out of any defense
of the Borrower, any other guarantor or any other party other than payment in
full of the Obligations, including, without limitation, any defense based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than payment in full of the Obligations. The Agent, the Issuing Bank and the
Lenders may, at their election, foreclose on any security held by the Agent, the
Issuing Bank, the Collateral Agent or the Lenders by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Agent, the Issuing Bank and the Lenders may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of Holdings hereunder except to the extent
the Obligations has been paid. Holdings waives, to the fullest extent permitted
by law, any defense arising out of any such election by the Agent, the Issuing
Bank and the Lenders, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of Holdings
against any Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Holdings
Secured Guaranty, and notices of the existence, creation or incurring of new or
additional Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Agent, the Issuing Bank and the Lenders shall
have no duty to advise Holdings of information known to them regarding such
circumstances or risks.
12.9 LIMITATION ON ENFORCEMENT. The Agent, the Issuing Bank and the
Lenders agree that this Holdings Secured Guaranty may be enforced only by the
action of
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the Agent, in each case acting upon the instructions of the Required Lenders and
that the Issuing Bank and each Lender shall not have any right individually to
seek to enforce or to enforce this Holdings Secured Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the
Agent for the benefit of the Agent, the Issuing Bank and the Lenders upon the
terms of this Credit Agreement. The Agent, the Issuing Bank and the Lenders
further agree that this Holdings Secured Guaranty may not be enforced against
any Affiliate, director, officer, employee or stockholder of Holdings.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Credit Agreement as of the date
first above written.
SCOTSMAN HOLDINGS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President
▇▇▇▇▇▇▇▇ SCOTSMAN, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President
BT COMMERCIAL CORPORATION,
Individually and as Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
BANKERS TRUST COMPANY,
as Issuing Bank
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President