EXHIBIT 10.3
EXECUTION
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 30, 1999
AMONG
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.,
AS COMPANY,
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.,
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS LEAD ARRANGER AND SYNDICATION AGENT,
DLJ CAPITAL FUNDING, INC.,
AS DOCUMENTATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
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▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS .......................................................................... 2
1.1 Certain Defined Terms................................................................. 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement............................................................................. 47
1.3 Other Definitional Provisions and Rules of Construction .............................. 48
1.4 Changes in GAAP....................................................................... 48
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............................................ 49
2.1 Commitments; Making of Loans; the Register; Notes..................................... 49
2.2 Interest on the Loans................................................................. 57
2.3 Fees.................................................................................. 61
2.4 Scheduled Payments of Term Loans Repayments, Prepayments and Reductions in
Revolving Loan Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral and Payments Under Guaranties................... 62
2.5 Use of Proceeds....................................................................... 70
2.6 Special Provisions Governing Eurodollar Rate Loans ................................... 70
2.7 Increased Costs; Taxes; Capital Adequacy.............................................. 72
2.8 Obligation of Lenders and Issuing Lenders to Mitigate................................. 76
2.9 Defaulting Lenders.................................................................... 77
2.10 Removal or Replacement of a Lender.................................................... 78
SECTION 3. LETTERS OF CREDIT .................................................................... 80
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein......... 80
3.2 Letter of Credit Fees................................................................. 84
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.................... 85
3.4 Obligations Absolute.................................................................. 87
3.5 Indemnification; Nature of Issuing Lenders' Duties.................................... 88
3.6 Increased Costs and Taxes Relating to Letters of Credit............................... 90
SECTION 4. CONDITIONS TO EFFECTIVENESS AND TO LOANS AND LETTERS OF CREDIT....................... 91
4.1 Conditions to Existing Revolving Loans and Letters of Credit.......................... 91
4.2 Conditions to Effectiveness of this Agreement and Term Loans.......................... 91
(1)
Page
4.3 Conditions to All Loans................................................................ 97
4.4 Conditions to Letters of Credit........................................................ 98
SECTION 5. HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES ............................... 99
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.......... 99
5.2 Authorization of Borrowing, etc....................................................... 100
5.3 Financial Condition................................................................... 102
5.4 No Material Adverse Change ........................................................... 102
5.5 Title to Properties; Liens; Real Property............................................. 103
5.6 Litigation; Adverse Facts ............................................................ 103
5.7 Payment of Taxes ..................................................................... 104
5.8 Performance of Agreements; Materially Adverse Agreements ............................. 104
5.9 Governmental Regulation .............................................................. 104
5.10 Securities Activities................................................................. 104
5.11 Employee Benefit Plans................................................................ 105
5.12 Certain Fees ......................................................................... 105
5.13 Environmental Protection ............................................................. 106
5.14 Employee Matters...................................................................... 106
5.15 Solvency ............................................................................. 106
5.16 Matters Relating to Collateral ....................................................... 107
5.17 Related Agreements.................................................................... 108
5.18 Disclosure............................................................................ 108
5.19 Subordination of Permitted Seller Notes and Shareholder Subordinated Notes............ 109
5.20 Year 2000............................................................................. 109
SECTION 6. HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS......................................... 109
6.1 Financial Statements and Other Reports................................................ 109
6.2 Corporate/Partnership Existence, etc.................................................. 115
6.3 Payment of Taxes and Claims; Tax Consolidation ....................................... 115
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds....................................................... 116
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender
Meeting; Internal Audit; Supplemental Appraisal....................................... 118
6.6 Compliance with Laws, etc............................................................. 118
6.7 Environmental Review and Investigation, Disclosure, Etc.; Actions Regarding
Hazardous Materials Activities, Environmental Claims and Violations of
Environmental Laws.................................................................... 119
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
by Subsidiaries and Future Subsidiaries............................................... 122
(2)
Page
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real Property
Collateral ........................................................................... 123
6.10 Interest Rate Protection.............................................................. 125
6.11 Post-Closing Deliveries............................................................... 125
6.12 Deposit Accounts and Cash Management Systems.......................................... 126
SECTION 7. HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS............................................ 126
7.1 Indebtedness ......................................................................... 126
7.2 Liens and Related Matters............................................................. 129
7.3 Investments; Joint Ventures........................................................... 132
7.4 Contingent Obligations................................................................ 134
7.5 Restricted Junior Payments............................................................ 135
7.6 Financial Covenants................................................................... 137
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions...................... 138
7.8 Fiscal Year........................................................................... 142
7.9 Sales and Lease-Backs................................................................. 142
7.10 Sale or Discount of Receivables....................................................... 142
7.11 Transactions with Shareholders and Affiliates......................................... 142
7.12 Disposal of Subsidiary Interests...................................................... 143
7.13 Conduct of Business................................................................... 143
7.14 Amendments of Documents Relating to Subordinated Indebtedness and Senior
Notes; Amendments of Term Loan Credit Documents....................................... 144
SECTION 8. EVENTS OF DEFAULT..................................................................... 145
8.1 Failure to Make Payments When Due..................................................... 145
8.2 Default in Other Agreements .......................................................... 145
8.3 Breach of Certain Covenants........................................................... 145
8.4 Breach of Warranty.................................................................... 146
8.5 Other Defaults Under Loan Documents................................................... 146
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................................. 146
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.................................... 146
8.8 Judgments and Attachments............................................................. 147
8.9 Dissolution........................................................................... 147
8.10 Employee Benefit Plans................................................................ 147
8.11 Change in Control..................................................................... 147
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations............. 148
(3)
Page
SECTION 9. AGENTS ............................................................................... 149
9.1 Appointment........................................................................... 149
9.2 Powers and Duties; General Immunity .................................................. 151
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness...................................................................... 152
9.4 Right to Indemnity ................................................................... 153
9.5 Successor Administrative Agent and Swing Line Lender ................................. 153
9.6 Collateral Documents and Guaranty..................................................... 154
SECTION 10. MISCELLANEOUS......................................................................... 155
10.1 Assignments and Participations in Loans and Letters of Credit......................... 155
10.2 Expenses.............................................................................. 158
10.3 Indemnity............................................................................. 159
10.4 Set-Off; Security Interest in Deposit Accounts........................................ 160
10.5 Ratable Sharing....................................................................... 161
10.6 Amendments and Waivers................................................................ 162
10.7 Independence of Covenants............................................................. 163
10.8 Notices............................................................................... 163
10.9 Survival of Representations, Warranties and Agreements ............................... 164
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative................................. 164
10.11 Marshalling; Payments Set Aside....................................................... 164
10.12 Severability.......................................................................... 164
10.13 Obligations Several; Independent Nature of Lenders' Rights............................ 165
10.14 Headings.............................................................................. 165
10.15 Applicable Law........................................................................ 165
10.16 Successors and Assigns................................................................ 165
10.17 Consent to Jurisdiction and Service of Process........................................ 165
10.18 Waiver of Jury Trial.................................................................. 166
10.19 Confidentiality ...................................................................... 167
10.20 Counterparts; Effectiveness........................................................... 167
10.21 Limitation on Liability of General Partner............................................ 168
10.22 "C" Corporation Conversion ........................................................... 168
Signature S-1
(4)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
IV-A FORM OF TERM NOTE
V FORM OF SWING LINE NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES
VIII FORM OF OPINION OF SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & FROM LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII FORM OF INTERCREDITOR AGREEMENT
XIII FORM OF PLEDGE AND SECURITY AGREEMENT
XIV FORM OF SUBSIDIARY GUARANTY
XV FORM OF HOLDINGS GUARANTY
XVI FORM OF MORTGAGE
XVII FORM OF COLLATERAL ACCESS AGREEMENT
XVIII FORM OF SUBORDINATION PROVISIONS
XIX FORM OF BORROWING BASE CERTIFICATE
XX FORM OF ACKNOWLEDGMENT AND CONSENT
(5)
SCHEDULES
1.1(i) ADJUSTMENTS TO BORROWING BASE
1.1(ii) ADD BACKS TO EBITDA
1.1(iii) OTHER INVESTORS/EXISTING INVESTORS
1.1(iv) RECAPITALIZATION TRANSACTIONS
1.1(v) CLOSING DATE INITIAL VALUES
1.1(vi) CERTAIN SUBSIDIARIES
1.1(vii) VALUATION PERCENTAGES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1 EXISTING LETTERS OF CREDIT
4.2C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
4.2F EFFECTIVE DATE MORTGAGED PROPERTY
4.2S ENVIRONMENTAL REPORTS
5.1 SUBSIDIARIES OF COMPANY
5.3 CERTAIN UNDISCLOSED LIABILITIES
5.5 REAL PROPERTY
5.5A TITLE TO PROPERTIES; LIENS
5.13 ENVIRONMENTAL MATTERS
6.11 POST-CLOSING DELIVERIES
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.11 CERTAIN TRANSACTIONS WITH AFFILIATES
(6)
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of June 30, 1999 and
entered into by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P., a Pennsylvania limited
partnership ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P., a Pennsylvania
limited partnership ("Holdings"), ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P. ("GSCP"),
as lead arranger (in such capacity, "Lead Arranger") and syndication agent (in
such capacity, "Syndication Agent"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as documentation
agent (in such capacity, "Documentation Agent") and FLEET NATIONAL BANK
("Fleet"), as administrative agent for Lenders (in such capacity,
"Administrative Agent") and Fleet as Collateral Agent for Lenders (in such
capacity, "Collateral Agent").
R E C I T A L S
- - - - - - - -
WHEREAS, capitalized terms used herein having the meanings assigned to
those terms in subsection 1.1;
WHEREAS, Company and certain financial institutions and other persons (the
"Existing Lenders") Syndication Agent, Documentation Agent, Administrative Agent
and Collateral Agent are parties to that certain Credit Agreement dated as of
July 22, 1998 (as heretofore amended, supplemented or otherwise modified, the
"Existing Credit Agreement"), pursuant to which the Existing Lenders have
extended certain credit facilities to Company, the proceeds of which have been
used to consummate the recapitalization transactions contemplated by the
Recapitalization Agreement, to pay certain related transaction fees and
expenses, to refinance certain indebtedness of Company and to provide financing
for working capital and for other general corporate purposes;
WHEREAS, Company desires that Existing Lenders and New Lenders agree to
amend and restate the Existing Credit Agreement in its entirety (i) to extend
additional credit facilities to Company in an aggregate principal amount of
$400,000,000 through (a) a $150,000,000 increase in the Revolving Loan
Commitments, the proceeds of which will be used to pay related fees and expenses
and to provide financing for working capital and other general corporate
purposes of Company and its Subsidiaries (including Consolidated Capital
Expenditures) and for Permitted Acquisitions, and (b) the addition of a Term
Loan facility, the proceeds of which will be used either (y) to repay a portion
of the Revolving Loans outstanding immediately prior the Effective Date or (z)
to finance Permitted Acquisitions consummated on the Effective
Date, and (ii) to make certain other changes as more fully set forth herein,
which amendment and restatement shall become effective upon satisfaction of the
conditions precedent set forth herein;
WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Existing Credit Agreement and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the Obligations of
Company outstanding thereunder; and
WHEREAS, it is the intent of Loan Parties to confirm that all Obligations
of Loan Parties under the other Loan Documents shall continue in full force and
effect and that, from and after the Effective Date, all references to the
"Credit Agreement" contained therein shall be deemed to refer to this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Holdings, Company, Lenders and Agents
agree that, on the Effective Date, the Existing Credit Agreement shall be
amended and restated in its entirety as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
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The following terms used in this Agreement shall have the following
meanings:
"Accounts" shall mean all of Company's and Permitted Subsidiaries'
accounts receivable, whether now or hereafter existing, arising in the
ordinary course of business from sales or leases of goods or rendition of
services made by Company or Permitted Subsidiaries, or through any of
Company's or Permitted Subsidiaries' divisions.
"Acquisition Consideration" means, with respect to any Permitted
Acquisition, the sum, without duplication, of any of the following
consideration paid or debt assumed in connection with such Permitted
Acquisition: (i) Cash; (ii) Securities (including, without limitation,
Permitted Seller Notes); (iii) any other property; (iv) the principal
amount of any Indebtedness assumed in connection with the applicable
Permitted Acquisition; (v) pre-tax payments anticipated to be made under
Permitted Earn-Out Agreements and other contractual arrangements entered
into pursuant to a Permitted Acquisition (the amount of such anticipated
2
payments to be determined by Company and discounted at a discount rate
equal to the interest rate applicable to Loans outstanding under the
Revolving Facility on the date of the consummation of such Permitted
Acquisition, such amount the "Earnout Value"); and (vi) the amount of any
reserves established with respect to the contingent liabilities assumed in
connection with such Permitted Acquisition (net of escrowed portions of the
purchase price paid in connection with such Permitted Acquisition and
indemnification arrangements designed to apply to such liabilities).
"Acknowledgment and Consent" means that certain Acknowledgment and
Consent executed by Holdings, the Company, and the Subsidiary Guarantors
dated as of the Effective Date and substantially in the form of Exhibit XX
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annexed hereto, as such Acknowledgment and Consent may be amended,
restated, supplemented or otherwise modified from time to time.
"Additional Mortgage" has the meaning assigned to that term in
subsection 6.9.
"Additional Mortgaged Property" has the meaning assigned to that term
in subsection 6.9.
"Additional Secured Indebtedness" has the meaning assigned to that
term in subsection 7.1(xv).
"Adjusted Borrowing Base Amount" means, as of any date of
determination, the Borrowing Base Amount, as adjusted in accordance with
Schedule 1.1(i) annexed hereto.
---------------
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the
rate per annum obtained by dividing (i) the arithmetic average (rounded
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upward to the nearest 1/16 of one percent) of the offered quotations, if
any, to first class banks in the interbank Eurodollar market by Reference
Lenders for
3
U.S. dollar deposits of amounts in same day funds comparable to the
respective principal amounts of the Eurodollar Rate Loans of Reference
Lenders for which the Adjusted Eurodollar Rate is then being determined
(which principal amount shall be deemed to be $1,000,000 in the case of any
Reference Lender not making, converting to or continuing such a Eurodollar
Rate Loan) with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated
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maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D
(or any successor category of liabilities under Regulation D); provided
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that if any Reference Lender fails to provide Administrative Agent with its
aforementioned quotation then the Adjusted Eurodollar Rate shall be
determined based on the quotation(s) provided to Administrative Agent by
the other Reference Lender(s).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in subsection
2.6C.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.
"Agent" means, individually, each of Lead Arranger, Syndication Agent,
Administrative Agent, Documentation Agent and Collateral Agent, and
"Agents" means Lead Arranger, Syndication Agent, Administrative Agent,
Documentation Agent and Collateral Agent, collectively.
"Agreement" means prior to the Effective Date, the Existing Credit
Agreement and on and after the Effective Date this Amended and Restated
Credit Agreement dated as of June 30, 1999, as it may be amended,
supplemented or otherwise modified from time to time.
"Applicable Base Rate Margin" means (a) with respect to Revolving
Loans for the period from the Closing Date up to (but excluding) the
Effective Date, 1.25% per annum, and (b) on and after the Effective Date,
with respect to Revolving Loans and Term Loans, a rate per annum equal to
the percentage set forth below opposite the Applicable Total Leverage Ratio
in effect as of such date of determination, any change in any such
Applicable Base Rate Margin to be effective on the date of any
corresponding change in the Applicable Total Leverage Ratio.
4
APPLICABLE APPLICABLE
APPLICABLE BASE RATE MARGIN BASE RATE MARGIN
TOTAL LEVERAGE FOR FOR
RATIO REVOLVING LOANS TERM LOANS
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(greater than or =) 5.5:1.00 1.50% 2.25%
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(less than) 5.5:1.00 1.25% 2.25%
(greater than or =) 5.0:1.00
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(less than) 5.0:1.00 1.00% 2.25%
(greater than or =) 4.5:1.00
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(less than) 4.5:1.00 0.75% 2.25%
(greater than or =) 4.0:1.00
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(less than) 4.0:1.00 0.50% 2.25%
(greater than or =) 3.5:1.00
-------------------------------------------------------------------------------------------------
(less than) 3.5:1.00 0.25% 2.00%
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"Applicable Commitment Fee Percentage" means (a) for the period from
the Closing Date up to (but excluding) the Effective Date .500% per annum
and (b) on and after the Effective Date, a rate per annum equal to the
percentage set forth below opposite the Applicable Total Leverage Ratio
in effect as of such date of determination, any change in the Applicable
Commitment Fee Percentage to be effective on the date of any corresponding
change in the Applicable Total Leverage Ratio.
APPLICABLE APPLICABLE
TOTAL LEVERAGE COMMITMENT
RATIO FEE PERCENTAGE
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(greater than or =) 5.0:1.00 0.500%
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(less than) 5.0:1.00
(greater than or =) 4.0:1.00 0.375%
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(less than) 4.0:1.00 0.250%
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"Applicable Eurodollar Rate Margin" means (a) with respect to
Revolving Loans for the period from the Closing Date up to (but excluding)
the Effective Date 2.25% per annum, and (b) on and after the Effective Date
with respect to Revolving Loans and Term Loans, a rate per annum equal to
the percentage set forth below opposite the Applicable Total Leverage Ratio
in
5
effect as of such date of determination, any change in any such
Applicable Eurodollar Rate Margin to be effective on the date of any
corresponding change in the Applicable Total Leverage Ratio.
APPLICABLE APPLICABLE
EURODOLLAR RATE EURODOLLAR
APPLICABLE MARGIN RATE MARGIN
TOTAL LEVERAGE FOR FOR
RATIO REVOLVING LOANS TERM LOANS
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(greater than or =) 5.5:1.00 2.50% 3.25%
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(less than) 5.5:1.00 2.25% 3.25%
(greater than or =) 5.0:1.00
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(less than) 5.0:1.00 2.00% 3.25%
(greater than or =) 4.5:1.00
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(less than) 4.5:1.00 1.75% 3.25%
(greater than or =) 4.0:1.00
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(less than) 4.0:1.00 1.50% 3.25%
(greater than or =) 3.5:1.00
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(less than) 3.5:1.00 1.25% 3.00%
==========================================================================================
"Applicable Total Leverage Ratio" means, with respect to any date of
determination, the Total Leverage Ratio set forth in the Pricing
Certificate (as defined below) in effect for the Pricing Period (as defined
below) in which such date of determination occurs. For purposes of this
definition, (i) "Pricing Certificate" means an Officer's Certificate of
Company certifying as to the Total Leverage Ratio as of the last day of any
Fiscal Quarter and setting forth the calculation of such Total Leverage
Ratio in reasonable detail, which Officer's Certificate may be delivered to
Administrative Agent at any time on or after the date of delivery by
Company of the Compliance Certificate (the "Related Compliance
Certificate") with respect to the period ending on the last day of such
Fiscal Quarter pursuant to subsection 6.1(iv), and (ii) "Pricing Period"
means each period commencing on the first Business Day after the delivery
to Administrative Agent of a Pricing Certificate and ending on the first
Business Day after the next Pricing Certificate is delivered to
Administrative Agent; provided that, anything contained in this definition
--------
to the contrary notwithstanding, (a) the Applicable Total Leverage Ratio
for the period from the Effective Date to but excluding the date of
commencement of the next Pricing Period shall be deemed to be greater than
5.50:1.00 for purposes of making the relevant calculation referred to above
and (c) in the event that, after the commencement of such first Pricing
Period, (X) Company fails to deliver a Pricing Certificate to
Administrative Agent setting forth the Total Leverage Ratio as of the last
day of any Fiscal Quarter on or before the last day on which Company is
required to deliver the Related
6
Compliance Certificate (such last day being the "Cutoff Date") and (Y)
Administrative Agent determines (each such determination being an "Agent
Determination") on or after the Cutoff Date (on the basis of the Related
Compliance Certificate or a Pricing Certificate delivered after the Cutoff
Date) that the Applicable Total Leverage Ratio that would have been in
effect if Company had delivered a Pricing Certificate on the Cutoff Date is
greater than the Total Leverage Ratio set forth in the most recent Pricing
Certificate actually delivered by Company, then (1) the Applicable Total
Leverage Ratio in effect for purposes of making the relevant calculation
referred to above for the period from the Cutoff Date to the date of
delivery by Company of the next Pricing Certificate (or, if earlier, the
next date on which an Agent Determination is made) shall be the Total
Leverage Ratio determined pursuant to the Agent Determination and (2) on
the first Business Day after Administrative Agent delivers written notice
to Company of any Agent Determination, Company shall pay to Administrative
Agent, for distribution (as appropriate) to Lenders, an aggregate amount
equal to the additional interest, letter of credit fees and commitment fees
Company would have been required to pay in respect of all applicable Loans,
Letters of Credit or Commitments in respect of which any interest or fees
have been paid by Company during the period from the Cutoff Date to the
date such notice is given by Administrative Agent to Company if the amount
of such interest and fees had been calculated using the Applicable Total
Leverage Ratio based on such Agent Determination.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor.
"Asset Sale" means the sale by Holdings or any of its Subsidiaries to
any Person, other than Holdings or any of its wholly-owned Subsidiaries
(and solely with respect to clause (i), the General Partner) of (i) any of
the stock of any of Holdings' Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Holdings or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Holdings or any of its Subsidiaries; provided, however, that Asset Sales
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shall not include (1) equipment, vessels or barges sold in the ordinary
course of business, (2) any other assets to the extent that the aggregate
fair market value of an asset (at the time of sale thereof) sold in any
single transaction or related series of transactions is equal to $2,000,000
or less, (3) any sale or discount, in each case without recourse, of
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof, (4) any sale or
exchange of specific items of equipment, vessels or barges so long as the
purpose of each such sale or exchange is to acquire (and results within 365
days of such sale or exchange in the acquisition of) replacement items of
equipment which are the functional equivalent of the item of equipment so
sold or exchanged, (5) the leasing (pursuant to operating leases in the
ordinary course of business) or licensing of real or personal property,
including intellectual property, (6) the sale for cash in the ordinary
course of business of Cash Equivalents, (7) disposals or replacements of
obsolete, uneconomical, negligible, worn out or surplus assets or property
in the ordinary course of business and (8) assets transferred in connection
with an Investment permitted
7
pursuant to Section 7.3; provided however that solely for purposes of
-------- -------
determining Asset Sales under subsection 2.4B(iii)(a), none of the above
exclusions (excluding clauses (4), (5), (6) and (8)) to Asset Sales shall
apply in the event that the amount of proceeds of transactions relating to
such exclusions in any Fiscal Year shall exceed $10,000,000 in the
aggregate.
"Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit IX annexed hereto.
-----------
"Bain" means ▇▇▇▇ Capital, Inc. and/or one or more of its Affiliates.
"Bain Advisory Services Agreement" means that certain Advisory
Services Agreement by and among Company, Holdings and Bain, in the form
delivered to Agents prior to the Closing Date and as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.14A.
"Bain Investors" means collectively, Bain/ACR, L.L.C., BCIP Associates
II, BCIP Associates II-B, ▇▇▇▇ Capital Fund VI, L.P., ▇▇▇▇ Capital Fund VI-
B, L.P., BCIP Trust Associates II, BCIP Trust Associates II-B, and BCIP
Associates II-C.
"Bain Management Fees" means the fees (including one-time fees payable
in connection with acquisitions, divestitures and financings) and expenses
payable by Holdings or the Company to Bain pursuant to the Bain Advisory
Services Agreement.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(i) the rate of interest announced publicly by Fleet in Boston,
Massachusetts, from time to time, as Fleet's base rate; and
(ii) 1/2 of 1% per annum above the Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"book value" means, with respect to any asset or assets, of any
Person, the value attributed thereto in the books and records of such
Person from time to time.
"Borrowing Base Amount" means, at any date of determination, the sum
of:
8
(i) 100% of the Orderly Liquidation Value of Eligible Cranes and
Lifting Equipment; plus
----
(ii) 75% of the Orderly Liquidation Value of Eligible Trucks and
Trailers; plus
----
(iii) 85% of the aggregate value of Eligible Account Receivables;
plus
----
(iv) 75% of the aggregate value of Eligible Parts and Supplies
Inventory; plus
----
(iv) 75% of the aggregate Orderly Liquidation Value of Eligible
Excavation Equipment;
all as reflected on the most recently delivered Borrowing Base
Certificate.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit XIX annexed hereto, with such modifications to form and
------------
presentation as Administrative Agent may request from time to time,
delivered to Administrative Agent by Company pursuant to subsections 4.2R
and 6.1(xvii) or as otherwise provided under Schedule 1.1(i).
---------------
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York and
Pennsylvania or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar
Rate Loans, any day that is a Business Day described in clause (i) above
and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, would be required to be accounted for as a capital
lease on the balance sheet of that Person.
"Carlisle" means Carlisle Equipment Group, L.P.
"Carlisle Acquisition" means the acquisition of substantially all of
the assets of Carlisle Construction Co., Inc. and its Subsidiaries to be
made under the Carlisle Acquisition Agreement.
"Carlisle Acquisition Agreement" mean that certain Asset Purchase
Agreement by and among Holdings, Carlisle Equipment Group, L.P., the
sellers listed therein and the current owners listed therein, dated as of
June [__], 1999 as amended, modified and supplemented from time to time.
9
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means: (i) marketable direct obligations issued
by, 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 one
of the two highest ratings obtainable from either Standard & Poor's Ratings
Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturity no more than one year from the date of creation
thereof and at the time of acquisition, having a rating of at least A-l
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances (or, with respect to foreign banks, similar
instruments) maturing within one year from the date of acquisition thereof
issued by any bank organized under the laws of the United States of America
or any state or territory thereof or the District of Columbia, Japan or any
member of the European Economic Community or any U.S. branch of a foreign
bank having at the date of acquisition thereof combined capital and surplus
of not less than $200,000,000; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described
in clause (i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market funds
which invest substantially all of their assets in securities of the types
described in clauses (i) through (v) above.
"Certificate re Non-Bank Status" means a certificate substantially in
the form of Exhibit X annexed hereto delivered by a Lender to
---------
Administrative Agent pursuant to subsection 2.7B(iii).
"Class" means, as applied to Lenders, each of the following classes of
Lenders: (i) Lenders having Term Loan Exposure and (ii) Lenders having
Revolving Loan Exposure.
"Closing Date" means the date on which the initial Revolving Loans
were made under the Existing Credit Agreement, which date was July 22,
1998.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the
Obligations.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgment or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor (excluding lessees
of property or equipment in the ordinary course of business) in possession
of any Collateral,
10
substantially in the form of Exhibit XVII annexed hereto with such changes
------------
thereto as may be agreed to by Administrative Agent in the reasonable
exercise of its discretion.
"Collateral Agent" means Fleet in its capacity as Collateral Agent
under the Collateral Documents and the Intercreditor Agreement and also
means any successor Collateral Agent appointed pursuant to Section 6(g) of
the Intercreditor Agreement.
"Collateral Documents" means the Pledge and Security Agreement, the
Intercreditor Agreement, the Mortgages and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of
the other Loan Documents in order to grant to Collateral Agent, on behalf
of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.
"Collateral Warranties" shall mean the representations and warranties
made with respect to the Collateral pursuant to Sections 5.5A and 5.16A of
this Agreement and Sections 5 and 8.6 of the Pledge and Security Agreement.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by Company or any of its Subsidiaries in the ordinary course of
business of Company or such Subsidiary.
"Commitments" means (i) with respect to the period prior to the
Effective Date, the commitments of Lenders to make Loans as set forth in
subsection 2.1A of the Existing Credit Agreement, and (ii) on and after the
Effective Date, the commitments of Lenders to make Loans as set forth in
subsection 2.1A of this Agreement.
"Common Units" means common partnership interests of Holdings
(including Class A and Class L units).
"Company" has the meaning assigned to such term in the introduction to
this Agreement.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit VI annexed hereto delivered to Administrative Agent by Company
----------
pursuant to subsection 6.1(iv).
"Confidential Information Memorandum" means that certain Confidential
Information Memoranda prepared by GSCP, DLJ and Fleet relating to the Loans
dated May 1999.
"Conforming Leasehold Interest" means any Recorded Leasehold Interest
as to which the lessor has substantially agreed in writing for the benefit
of Administrative Agent (which writing has been delivered to Administrative
Agent), whether under the terms of the applicable lease, under
11
the terms of a Landlord Consent and Estoppel, or otherwise, to the matters
described in the definition of "Landlord Consent and Estoppel," which
interest, if a subleasehold or sub-subleasehold interest, is not subject to
any contrary restrictions contained in a superior lease or sublease.
"Consolidated Adjusted EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income (including,
without duplication, foreign withholding taxes and any payment of Permitted
Tax Distributions), (iv) total depreciation expense, (v) total amortization
expense, (vi) other non-cash items reducing Consolidated Net Income, and
(vii) to the extent deducted in determining Consolidated Net Income, those
items described on Schedule 1.1(ii) annexed hereto, less (a) other non-cash
---------------- ----
items increasing Consolidated Net Income, and (b) to the extent included in
Consolidated Net Income, net gains on sales of used Cranes and Lifting
Equipment and used Excavation Equipment, all of the foregoing as determined
on a consolidated basis for Company and its Subsidiaries in conformity with
GAAP.
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases
which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "purchases of property, plant or
equipment" or comparable items reflected in the consolidated statement of
cash flows of Company and its Subsidiaries.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
--------- -------
interest expense not payable in Cash (including interest expense paid in
kind and amortization of discount, of deferred financing fees, of premiums
paid on Hedge Agreements and of debt issuance costs).
"Consolidated Interest Expense" means, for any period, total cash and
non-cash interest expense (including that portion attributable to Capital
Leases in accordance with GAAP, interest expense paid in kind and
amortization or write-off of discount, of deferred financing fees, of
premiums paid on Hedge Agreements and of debt issuance costs, and accretion
of any debt discount and capitalized interest) of Company and its
Subsidiaries on a consolidated basis in accordance with GAAP with respect
to all outstanding Indebtedness of Company and its Subsidiaries, including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, net costs under
Interest Rate Agreements, commitment fees accrued under subsection 2.3A and
any administrative agent's fees payable to Administrative Agent.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting
12
period determined in conformity with GAAP; provided that there shall be
--------
excluded (i) the income (or loss) of any Person (other than a Subsidiary of
Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of Company
or is merged into or consolidated with Company or any of its Subsidiaries
or that Person's assets are acquired by Company or any of its Subsidiaries,
(iii) the income of any Subsidiary of Company to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary,
(iv) any gains or losses attributable to Asset Sales, other than of new or
used Cranes and Lifting Equipment (without regard to the $2,000,000
limitation set forth in the definition thereof or reserves relating thereto
and the related tax effects) or new or used Excavation Equipment or
returned surplus assets of any Pension Plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net extraordinary gains or
net extraordinary losses.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and
its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another
if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to (a) the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is
13
specifically limited, or (B) if neither amount in clause (a) is stated or
determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform) as determined by such
Person in good faith. Contingent Obligations shall not include standard
contractual indemnities entered into in the ordinary course of business.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other material instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject.
"Corporate Loan Party" means any Loan Party which is a corporation.
"Cranes and Lifting Equipment" shall mean each item of equipment that
is owned by the Company or its Permitted Subsidiaries that constitutes any
of the following: a hydraulic truck crane, a hydraulic rough terrain crane,
an aerial lift, a carry-deck crane, a boom truck, a tower crane, a crawler
crane, a conventional truck crane or a crane attachment; including, without
limitation, those items identified on Schedule 2.1(d)(A) to the Pledge and
------------------
Security Agreement.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party which is entered into for the purpose of hedging
against fluctuations in currency values; provided however that such
----------------
agreements (i) relate only to the purchase or sale of equipment used in the
business of the Company and (ii) are not entered into for speculative
purposes.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"DLJ." has the meaning assigned to that term in the introduction to
this Agreement.
"Documentation Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"▇▇▇▇ Acquisition Agreement" means that certain Asset Purchase
Agreement dated June 4, 1999, by and between DAI Statutory Trust, a
Connecticut statutory trust, and ACR/▇▇▇▇ Acquisition, Inc., a Delaware
corporation as amended, modified and supplemented from time to time.
14
"Effective Date" means the date on or before July 2, 1999 on which the
conditions precedent set forth in subsections 4.2 and 4.3 shall be
satisfied or waived in accordance with the terms hereof.
"Effective Date Mortgage" has the meaning assigned to that term in
subsection 4.2F.
"Effective Date Mortgaged Policies" has the meaning assigned to that
term in subsection 4.2F.
"Effective Date Mortgaged Property" has the meaning assigned to that
term in subsection 4.2F.
"Eligible Accounts Receivable" shall mean the aggregate face amount of
Company's and Permitted Subsidiaries' Accounts, as reflected on their books
and records in accordance with GAAP, payable in Dollars, that conform to
the warranties contained in this definition and to the Collateral
Warranties. Unless otherwise approved in writing by Administrative Agent,
no Account shall be deemed to be an Eligible Account Receivable if:
(i) the Account is unpaid 90 days or more from the original
invoice date; provided that with respect to any Account designated by
--------
Administrative Agent as a "dated account", such Account shall not be
deemed ineligible pursuant to this clause (i) unless unpaid more than
30 days or more from its due date or 180 days or more from its invoice
date; or
(ii) such Account if from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof) are
ineligible under the provisions of clause (i) above;
(iii) the Account, when aggregated with all other Accounts of
such account debtor, exceeds fifteen percent (15%) in face value of
all consolidated Accounts of Company and Permitted Subsidiaries in the
aggregate then outstanding, to the extent of such excess; or
(iv) (A) the account debtor is also a creditor of Company or
Permitted Subsidiaries, to the extent of the amount owed by Company or
Permitted Subsidiaries to the account debtor, (B) 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 Company or Permitted Subsidiaries, which has not
been resolved to the extent of such dispute or (C) the Account
otherwise is or may become subject to any right of setoff by the
account debtor, to the extent of the amount of such setoff; or
15
(v) to the knowledge of the Company, 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 in the premises in respect to
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 failed, suspended business, ceased to be solvent,
or 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; or
(vi) the sale is to an account debtor outside the continental
United States, the United States Virgin Islands, or Canada, unless the
sale is (a) on letter of credit, guaranty or acceptance terms, in each
case acceptable to Administrative Agent in its sole discretion, or (b)
otherwise approved by and acceptable to Administrative Agent in its
reasonable discretion; or
(vii) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return except in accordance with ordinary course of
business dealings or customary practice; or
(viii) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless Company or such
Permitted Subsidiary duly and effectively assigns its rights to
payment of such Account to Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727
et seq.); or
-- ---
(ix) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor or the services
giving rise to such Account have not been performed by Company or a
Permitted Subsidiary and accepted by the account debtor or the Account
otherwise does not represent a final sale; or
(x) the Account is not subject to a valid, enforceable and First
Priority perfected Lien in favor of Administrative Agent; or
(xi) Administrative Agent, in the exercise of its reasonable
discretion, determines it to be ineligible.
"Eligible Assignee" means (a) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized
16
under the laws of the United States or any state thereof; (iii) a
commercial bank organized under the laws of any other country or a
political subdivision thereof; provided that (x) such bank is acting
--------
through a branch or agency located in the United States or (y) such bank is
organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act) which extends credit or
buys loans as one of its businesses including insurance companies, funds,
investment companies and lease financing companies; and (b) any Lender, any
Affiliate of any Lender and, with respect to any Lender that is an
investment fund that invests in commercial loans, any other investment fund
that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor; provided that no Affiliate of Holdings shall be an Eligible
--------
Assignee.
"Eligible Cranes and Lifting Equipment" shall mean each of the Cranes
and Lifting Equipment that (i) is owned solely by Company or a Permitted
Subsidiary and with respect to which Company or a Permitted Subsidiary has
good, valid and marketable title, (ii) unless in transit, is located on
property of a customer of Company or a Permitted Subsidiary, or is stored
on property that is either owned or leased by Company or a Permitted
Subsidiary (provided that; with respect to Cranes and Lifting Equipment
stored on property leased by Company or a Permitted Subsidiary, Company or
a Permitted Subsidiary, if requested by Administrative Agent, shall have
delivered in favor of Administrative Agent a Collateral Access Agreement
from the landlord of such leased property); (iii) is subject to a valid,
enforceable and perfected First Priority Lien in favor of Collateral Agent
(provided that, notwithstanding the provisions of this clause (iii) or
--------
Schedule 1.1(i), with respect to any item included in Cranes and Lifting
---------------
Equipment acquired after the Closing Date that is subject to a certificate
of title, so long as the documentation necessary to reflect the appropriate
transfer of title and recordation of a Lien in favor of Collateral Agent in
any such item has been filed in the appropriate filing office, such item
shall be included in the definition of Eligible Cranes and Lifting
Equipment for a period of up to 90 days pending final action by such filing
office with respect for such filings; provided further that, the Orderly
----------------
Liquidation Value of such item during any such period shall be deemed to be
75% of their purchase price (net of transportation costs and taxes); (iv)
is located in the United States, the United States Virgin Islands, Canada
or a Caribbean jurisdiction; (v) is not obsolete; (vi) unless otherwise
undergoing ordinary maintenance, is used or is available for use, rent or
lease in the business of Company and its Permitted Subsidiaries, and is in
a condition suitable for such use, rent or lease; (vii) conforms to the
warranties contained in this definition and to the Collateral Warranties;
and (viii) Administrative Agent has not determined in its reasonable
judgment to be ineligible; provided that, for purpose of determining
--------
ineligibility pursuant to this clause (viii) with respect to Cranes and
Lifting Equipment included in Category 1 (as set forth in Schedule
--------
1.1(vii)), Crawler Cranes and Conventional Truck Cranes, Administrative
-------
Agent shall make its determination on the basis of the criteria set forth
in clauses (i) - (vii) of this definition and, with respect to any such
determination regarding any single item with a value of $500,000 or more or
any group of items of a value of $3,000,000 or more
17
during any Fiscal Year, no determination of ineligibility shall be
effective until 10 days prior written notice has been given by
Administrative Agent to Company with respect to the ineligibility of such
items.
"Eligible Excavation Equipment" shall mean each item of Excavation
Equipment that (i) is owned solely by Company or a Permitted Subsidiary and
with respect to which Company or a Permitted Subsidiary has good, valid and
marketable title, (ii) unless in transit, is located on property of a
customer of Company or a Permitted Subsidiary, or is stored on property
that is either owned or leased by Company or a Permitted Subsidiary
(provided that; with respect to Excavation Equipment stored on property
leased by Company or a Permitted Subsidiary, Company or a Permitted
Subsidiary, if requested by Administrative Agent, shall have delivered in
favor of Administrative Agent a Collateral Access Agreement from the
landlord of such leased property); (iii) is subject to a valid, enforceable
and perfected First Priority Lien in favor of Collateral Agent (provided
--------
that, notwithstanding the provisions of this clause (iii) or Schedule
--------
1.1(i), with respect to any item included in Excavation Equipment acquired
-----
after the Effective Date that is subject to a certificate of title, so long
as the documentation necessary to reflect the appropriate transfer of title
and recordation of a Lien in favor of Collateral Agent in any such item has
been filed in the appropriate filing office, such item shall be included in
the definition of Eligible Excavation Equipment for a period of up to 90
days pending final action by such filing office with respect for such
filings; provided further that, the Orderly Liquidation Value of such item
----------------
during any such period shall be deemed to be 75% of their purchase price
(net of transportation costs and taxes); (iv) is located in the United
States, the United States Virgin Islands, Canada or a Caribbean
jurisdiction; (v) is not obsolete; (vi) unless otherwise undergoing
ordinary maintenance, is used or is available for use, rent or lease in the
business of Company and its Permitted Subsidiaries, and is in a condition
suitable for such use, rent or lease; (vii) conforms to the warranties
contained in this definition and to the Collateral Warranties; and (viii)
Administrative Agent has not determined in its reasonable judgment to be
ineligible; provided that, for purpose of determining ineligibility
--------
pursuant to this clause (viii) with respect to Excavation Equipment any
such determination regarding any single item with a value of $250,000 or
more or any group of items of a value of $2,000,000 or more during any
Fiscal Year, no determination of ineligibility shall be effective until 10
days prior written notice has been given by Administrative Agent to Company
with respect to the ineligibility of such items.
"Eligible Parts and Supplies Inventory" shall mean each item included
in the Parts and Supplies Inventory that (i) is owned solely by Company or
a Permitted Subsidiary and with respect to which Company or a Permitted
Subsidiary has good, valid and marketable title; (ii) is stored on property
that is either owned or leased by Company or a Permitted Subsidiary
(provided that; with respect to Parts and Supplies Inventory stored on
property leased by Company or a Permitted Subsidiary, Company or such
Permitted Subsidiary, at the request of Administrative Agent, shall have
delivered in favor of the Agent a Collateral Access Agreement from the
landlord of such leased property); (iii) is subject to a valid, enforceable
and perfected First Priority Lien in favor of
18
Collateral Agent; (iv) is located in the United States, the United States
Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not obsolete;
(vi) otherwise conforms to the warranties contained in this definition and
to the Collateral Warranties; (vii) is subject to record keeping, valuation
methodologies, and process and reporting controls reasonably acceptable to
Administrative Agent; and (viii) Administrative Agent has not determined,
in its reasonable judgment, to be ineligible.
"Eligible Trucks and Trailers" shall mean each of the Trucks and
Trailers that (i) is owned solely by Company or a Permitted Subsidiary and
with respect to which Company or a Permitted Subsidiary has good, valid and
marketable title; (ii) unless in transit or undergoing ordinary
maintenance, is stored on property that is either owned or leased by
Company or a Permitted Subsidiary when not rented to an account debtor
pursuant to an equipment lease (provided that, with respect to Trucks and
Trailers stored on property leased by Company or a Permitted Subsidiary,
Company or such Permitted Subsidiary, at the request of Administrative
Agent, shall have delivered in favor of Administrative Agent a Collateral
Access Agreement from the landlord of such leased property); (iii) is
subject to a valid, enforceable and perfected First Priority Lien in favor
of Collateral Agent; (iv) is located in the United States, the United
States Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not
obsolete; (vi) unless otherwise undergoing ordinary maintenance, is used or
available for use and in a condition available for use in the ordinary
course of business in connection with Company's or a Permitted Subsidiary's
equipment rental and sales activities; (vii) otherwise conforms to the
warranties contained in this definition and to the Collateral Warranties;
and (viii) Administrative Agent has not determined in its reasonable
judgment to be ineligible.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare from environmental hazards (including
19
Hazardous Materials), in any manner applicable to Holdings or any of
its Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
------
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
------
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
------
Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean
------
Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
------
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide and
------
Rodenticide Act (7 U.S.C. (S) 136 et seq.), the Occupational Safety and
------
Health Act (29 U.S.C. (S) 651 et seq.), the Oil Pollution Act (33 U.S.C.
------
(S) 2701 et seq.) and the Emergency Planning and Community Right-to-Know
------
Act (42 U.S.C. (S) 11001 et seq.), each as amended or supplemented, any
------
analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
"Equipment Year" shall mean, with respect to any determination made
pursuant to Schedule 1.1(vii), the number of calendar years since the year
----------------
of manufacture of each item of Rental Equipment (with the year of
manufacture representing year 0).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person
is a member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member. Any former ERISA
Affiliate of Holdings or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Holdings or such Subsidiary within the
meaning of this definition with respect to the period such entity was an
ERISA Affiliate of Holdings or such Subsidiary and with respect to
liabilities arising after such period for which Holdings or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make by its
due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required
20
contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of
any such Pension Plan resulting in liability pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is
any potential liability therefor, or the receipt by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of
an act or omission which could give rise to the imposition on Holdings or
any of its Subsidiaries of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409, Section
502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee
Benefit Plan; (ix) the assertion of a material claim (other than routine
claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Holdings or any of its
Subsidiaries in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under Section
401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of
the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in Section 8.
"Excavation Equipment" shall mean each item of equipment that is owned
by the Company or its Permitted Subsidiaries that constitutes excavation
equipment including, without limitation, any of the following: excavators,
backhoe, hydraulic hammers, tractors, loaders, scrapers, graders,
compactors, rollers and soil stabilizers and sweepers, but in any event
does not include equipment that would otherwise constitute Cranes and
Lifting Equipment or Trucks and Trailers.
21
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of the applicable Issuing Lender in
the New York foreign exchange market for the purchase by such Issuing
Lender (by cable transfer) of such currency in exchange for Dollars at
12:00 noon (New York time) one Business Day prior to such date, expressed
as a number of units of such currency per one Dollar.
"Excluded Subsidiaries" means, collectively, all Subsidiaries in which
the fair market value (as reasonably determined and certified by senior
management of Company) of such Subsidiaries' assets do not in the aggregate
exceed $15,000,000; provided, that no Subsidiary shall be an Excluded
--------
Subsidiary if it acquires assets with a fair market value in excess of
$2,000,000 in the aggregate or incurs Indebtedness or Contingent
Obligations in excess of $2,000,000 in the aggregate.
"Existing Credit Agreement" has the meaning assigned to that term in
the Recitals to this Agreement.
"Existing Investors" means certain existing shareholders, management
officers and employees of Company and other investors identified in
Schedule 1.1(iii) annexed hereto as Existing Investors.
"Existing Lenders" has the meaning assigned to that term in the
Recitals to this Agreement.
"Existing Letters of Credit" has the meaning assigned to that term in
subsection 3.1.
"Existing Mortgages" means any mortgage, deed of trust or deed
delivered pursuant to the Existing Credit Agreement including any
amendments, modifications, restatements or assignments thereof.
"Existing Revolving Loans" means, with respect to any Existing Lender,
the Revolving Loans under, and as defined in, the Existing Credit Agreement
held by such Existing Lender immediately prior to the Effective Date and
which Revolving Loans remain outstanding immediately after the Effective
Date.
22
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Holdings or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate 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 which is a Business Day, the average of the
quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected by
Administrative Agent.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xiii).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
(a) Permitted Encumbrances and (b) with respect to any Collateral other
than Collateral securing the Loans hereunder, Liens permitted pursuant to
subsections 7.2A(iii), 7.2A(viii), 7.2A(ix), 7.2(xi) and 7.2A(xv)) and (ii)
such Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2) to which such Collateral is subject.
"First Supplemental Agreement" means collectively (i) the Supplemental
Indenture, dated as of the date hereof, among Holdings the Company and
State Street Bank and Trust Company as trustee and (ii) the Supplemental
Indenture, dated as of the date hereof among the Company and State Street
Bank and Trust Company.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries
ending on the December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to
the calendar year in which such Fiscal Year ends.
"Fleet" has the meaning assigned to that term in the introduction to
this Agreement.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"Foreign Cash Equivalents" means certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada or a Caribbean
jurisdiction or any country that is a member of the European Economic
Community whose short-term commercial paper rating from
23
S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least
P-1 or the equivalent thereof, in each case with maturities of not more
than one year from the date of acquisition.
"Funding and Payment Office" means (i) the office of Administrative
Agent and Swing Line Lender located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ or (ii) such other office of Administrative Agent and Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender to
Company and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsections 1.2 and 1.4, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of determination.
"General Partner" means ACR Management LLC, a Delaware limited
liability company, the sole general partner of Company, or any permitted
successor thereto.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal,
state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"Guaranties" means the Holdings Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined in any statute or regulation as or included in the
definition in any statute or regulation of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by reason of
properties harmful to health, safety or the indoor or outdoor environment
(including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar meaning and regulatory
effect under any applicable Environmental Laws); (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
24
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde
foam insulation; (viii) polychlorinated biphenyls, including any oil or
dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and
(x) any other chemical, material or substance which could pose a hazard to
the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, present or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, migration, Release,
threatened Release, discharge, placement, generation, transportation,
processing, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective
action or response action with respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values.
"Holdings" has the meaning assigned to that term in the introduction
to this Agreement.
"Holdings Guaranty" means the Holdings Guaranty executed and delivered
by Holdings and the General Partner on the Closing Date, substantially in
the form of Exhibit XV annexed hereto, as such Holdings Guaranty may be
----------
amended, supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"Husky Acquisition Agreement" means that certain Stock and Asset
Purchase Agreement dated March 20, 1999, by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, an
individual, Husky Crane, Inc., a California corporation, Paradise Equipment
Company, a California limited partnership, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings,
L.P., a Pennsylvania limited partnership, and the Company, as amended,
modified or supplemented from time to time.
"Increased Amount Date" has the meaning assigned to that term in
subsection 2.1A(v).
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and any accrued expenses or trade
payables), (a) which obligation in accordance with GAAP would be shown as a
liability on the balance sheet of such Person or (b) which purchase price
is evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held
25
by that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. The amount of any Indebtedness which is non-recourse to the obligor
thereunder or to any other obligor and for which recourse is limited to an
identified asset or assets shall be equal to the lesser of (1) the stated
amount of such obligation and (2) the fair market value of such asset or
assets. Obligations under Interest Rate Agreements and Currency Agreements
constitute (X) in the case of Hedge Agreements, Contingent Obligations, and
(Y) in all other cases, Investments, and in neither case constitute
Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Independent Appraiser" means Hunyady Appraisal Services or such other
appraisal firm selected by the Company and reasonably acceptable to the
Administrative Agent.
"Independent Public Accountant" means any of the five largest public
accounting firms in the United States selected by Holdings.
"Initial Period" means the period commencing on and including the
Effective Date and ending on (but excluding) the earlier of (i) the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments and (ii) the date which is 30 days
after the Effective Date.
"Initial Value" shall mean, with respect to each item of Rental
Equipment, an amount equal to (y) with respect to each item of Rental
Equipment in existence as of the Closing Date, the appraised orderly
liquidation value (assuming liquidation within an 180-day period) of each
item of Rental Equipment specified on Schedule 1.1(v) annexed hereto, and
---------------
(z) with respect to each item of Rental Equipment acquired subsequent to
the Closing Date, an amount (which amount shall not, in any event, exceed
the purchase price thereof, net of shipping costs and taxes) to be
determined in accordance with the provisions of Schedule 1.1(i).
---------------
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes which are used in the
conduct of the business of Holdings and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Holdings and its Subsidiaries, taken as a whole.
"Intercreditor Agreement" means that certain Intercreditor Agreement
executed and delivered by Administrative Agent, Fleet, as administrative
agent for lenders under the Term Loan Credit Agreement, and Collateral
Agent on the Closing Date, substantially in the form of Exhibit XII annexed
-----------
hereto, as such Intercreditor Agreement may thereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
26
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of longer than three months, "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in subsection
2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Holdings or any of its
Subsidiaries is a party.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest
Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute, and the regulations promulgated by the Internal Revenue
Service thereunder.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are
then held by such Person for sale or lease, including raw materials and
work in process.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of Holdings), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Holdings from any
Person other than Holdings or any of its Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Holdings or any of its Subsidiaries
to any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto less any return of
----
principal or capital thereon, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment.
"IP Collateral" means, collectively, the "Intellectual Property" as
defined in the Pledge and Security Agreement.
27
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any Subsidiary of any Person be considered
--------
to be a Joint Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and
substance to Administrative Agent, pursuant to which such lessor
substantially agrees, for the benefit of Administrative Agent, (i) that
without any further consent of such lessor or any further action on the
part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to
the purchaser at a foreclosure sale or in a transfer in lieu of such a sale
(and to a subsequent third party assignee if Administrative Agent, any
Lender, or an Affiliate of either so acquires such Leasehold Property),
(ii) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Administrative
Agent notice of such default and at least 60 days (or, if such default
cannot reasonably be cured by Administrative Agent within such period, such
longer period as may reasonably be required) to cure such default, (iii) to
the matters contained in a Collateral Access Agreement, and (iv) to such
other matters relating to such Leasehold Property as Administrative Agent
may reasonably request; provided, however, that Administrative Agent may
-----------------
determine in its reasonable discretion that any one or more of the
agreements set forth in clauses (i) through (iv) are not required to be
included in a Landlord Consent and Estoppel with respect to a particular
Leasehold Property.
"Lead Arranger" has the meaning assigned to that term in the
introduction to this Agreement.
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its
reasonable discretion as not being required to be included in the
Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, persons who become Lenders
pursuant to subsection 2.1A(v), together with their successors and
permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires; provided
--------
that the term "Lenders", when used in the context of a particular
Commitment, shall mean Lenders having that Commitment.
28
"Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1 (including,
without limitation, Existing Letters of Credit).
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
----
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is
denominated in a currency other than Dollars shall be valued based on the
applicable Exchange Rate for such currency as of the applicable date of
determination.
"Leverage Ratio" means the ratio of (i) the average monthly
outstanding principal amount of the Loans, the Second Priority Term Loans,
Capital Leases and Additional Secured Indebtedness, less cash on hand as of
----
the date of determination, for the quarterly period ending on the last day
of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the four-
Fiscal Quarter period then ended, in each case as set forth in the most
recent Compliance Certificate delivered by Company to Administrative Agent
pursuant to clause (iv) of subsection 6.1; provided, however, that with
-----------------
respect to any period during which a Permitted Acquisition occurs, for
purposes of calculating the Leverage Ratio under subsections 2.4B(iii)(d),
the provisions of subsection 7.6D with respect to any cost savings that
would otherwise be given effect in calculating Consolidated Adjusted EBITDA
as a result of such provisions shall not be given effect until such cost
savings are actually realized.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"Loan" or "Loans" means one or more of the Term Loans, Revolving Loans
or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties, the Deposit Account
Agreement, the Collateral Documents and the Acknowledgment and Consent.
"Loan Party" means each of Holdings, General Partner, Company and any
of Holding's Subsidiaries from time to time executing a Loan Document, and
"Loan Parties" means all such Persons, collectively.
29
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or
otherwise) of Holdings and its Subsidiaries, taken as a whole, or (ii) the
impairment of the ability of any Loan Party to perform, or of
Administrative Agent, Collateral Agent or Lenders to enforce, the
Obligations.
"Material Contract" means any contract or arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew would reasonably be expected to have a Material Adverse Effect.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, however, that no Leasehold Property with respect to
--------
which the aggregate amount of all rents payable during any one Fiscal Year
never exceeds $1,000,000 shall be a "Material Leasehold Property".
"Material Real Property Asset" means a Real Property Asset reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, "Material Real Property Assets" shall not include
--------
any individual Real Property Asset that does not exceed $500,000 in fair
market value; provided, further that, Real Property Assets that do not
-------- -------
constitute Material Real Property Assets shall not exceed $6,000,000 in
aggregate fair market value.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XVI annexed hereto
-----------
or in such other form as may be approved by Collateral Agent in its
reasonable discretion, in each case with such changes thereto as may be
recommended by Collateral Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at Collateral
Agent's option, in the case of an Additional Mortgaged Property, an
amendment to an existing Mortgage, in form reasonably satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as
such security instrument or amendment may be amended, supplemented or
otherwise modified from time to time.
"Mortgaged Property" means any property subject to an Existing
Mortgage, an Effective Date Mortgaged Property and/or an Additional
Mortgaged Property.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"Multiemployer plan" as defined in Section 3(37) of ERISA.
30
"NAIC" means the National Association of Insurance Commissioners.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received) received from such Asset Sale, net of any bona fide costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of
such Asset Sale as a result of any gain recognized in connection with such
Asset Sale and (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans)
that is secured by a Lien on the stock or assets in question and that is
repaid as a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (i) under any
casualty insurance policy in respect of a covered loss thereunder or (ii)
as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net
of any actual and documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims
of Holdings or such Subsidiary in respect thereof.
"New Business" means any assets or business acquired by Company or any
of its Subsidiaries in a Permitted Acquisition.
"New Lender" means any person who becomes a Lender under this
Agreement as of the Effective Date or pursuant to Section 2.1A(v).
"New Revolving Lender" has the meaning assigned to that term in
subsection 2.1A(v).
"New Revolving Loan Commitments" has the meaning assigned to that term
in subsection 2.1A(v).
"New Term Loan Commitments" has the meaning assigned to that term in
subsection 2.1A(v).
"New Term Loans" has the meaning assigned to that term in subsection
2.1A(v).
31
"New Term Loan Lender" has the meaning assigned to that term in
subsection 2.1A(v).
"1999 Acquisitions" means the acquisitions made or to be made under
the 1999 Acquisition Documents.
"1999 Acquisition Documents" means the Husky Acquisition Agreement,
the ▇▇▇▇ Acquisition Agreement and the Carlisle Acquisition Agreement.
"Notes" means one or more of the Term Notes, Revolving Notes or Swing
Line Note or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
---------
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
----------
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to
-----------
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Agents, Lenders or their respective Affiliates or
any of them under the Loan Documents, whether for principal, interest,
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnification or otherwise.
"Officers' Certificate" means, with respect to any Person, a
certificate executed on behalf of such Person (x) if such Person is a
partnership, by the chairman of the board (if an officer) or chief
executive officer, chief operating officer, president or vice president or
by the chief financial officer of one of its partners and (y) if such
Person is a corporation, on behalf of such corporation by its chairman of
the board (if an officer), chief executive officer, chief operating officer
or its president or one of its vice presidents and, with respect to
financial matters only, by its principal financial officer or principal
accounting officer or its treasurer; provided that every Officers'
--------
Certificate with respect to the compliance with a condition precedent to
the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or
32
have caused to be made such examination or investigation as is necessary to
enable them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"Orderly Liquidation Value" shall mean, as of any date of
determination and with respect to each item of Rental Equipment:
(i) for items of Rental Equipment owned by the Company as of the
Closing Date, an amount equal to the Initial Value from the Closing
Date through December 31, 1998 and thereafter an amount equal to (A)
the Orderly Liquidation Value of such item of Rental Equipment for the
preceding calendar year multiplied by (B) 1 minus Factor B specified
in Schedule 1.1(vii) corresponding to the current Equipment Year of
----------------
such item of Rental Equipment;
(ii) for items of Rental Equipment acquired by the Company after
the Closing Date:
(a) during the calendar year in which such item of Rental
Equipment is acquired, the Initial Value of such item of Rental
Equipment; or
(b) in each subsequent calendar year, an amount equal to (A)
the Orderly Liquidation Value of such item of Rental Equipment
for the preceding calendar year multiplied by (B) 1 minus either
(x) Factor A if such item of Rental Equipment is not
subject to determination of Initial Value by an Independent
Appraiser pursuant to the provisions of Schedule 1.1(i), or
--------------
(y) Factor B if such item of Rental Equipment is
subject to determination of Initial Value by an Independent
Appraiser pursuant to the provisions of Schedule 1.1(i),
--------------
(each of Factor A and Factor B as specified in Schedule 1.1(vii)
----------------
and corresponding to the current Equipment Year of such item of
Rental Equipment);
provided that, the Orderly Liquidation Value of each item of Rental
--------
Equipment classified as a crawler crane, conventional truck crane, tower
crane or crane attachment (such classification to
33
be made by an Independent Appraiser) shall be the Initial Value of such
Rental Equipment until the date of delivery of the next Supplemental
Appraisal, after which the Orderly Liquidation Value of such Rental
Equipment shall be as specified in the most recent Supplemental Appraisal.
"Other Investors" means certain persons identified on Schedule
--------
1.1(iii) annexed hereto as Other Investors.
-------
"Partnership Agreements" means limited partnership agreements of
Holdings and Company.
"Partnership Loan Party" means any Loan Party which is a general or
limited partnership.
"Parts and Supplies Inventory" shall mean as of any date of
determination Company's or a Permitted Subsidiary's inventory (valued at
the lower of book value and market value) consisting of parts and supplies
(excluding fluids and de minimus amounts of other parts and supplies) being
used or reasonably expected to be used in the immediately succeeding twelve
months in connection with the Rental Equipment.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"Permitted Acquisition" means the acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(xiii) or
(xviii) and specifically including the 1999 Acquisitions.
"Permitted Domestic Subsidiary" means (w) the Subsidiaries set forth
at Schedule 1.1(vi), (x) any wholly-owned Subsidiaries organized under the
---------------
laws of the United States or any state thereof which has been organized
solely for the purpose of facilitating a Permitted Acquisition or which was
acquired pursuant to a Permitted Acquisition, provided that the assets
--------
acquired pursuant to such Permitted Acquisition are promptly contributed or
otherwise transferred to the Company, (y) any Transitory Subsidiary and (z)
any wholly-owned Subsidiary of Company which is organized under the laws of
the United States or any state thereof, provided however that, all such
----------------
Subsidiaries under this clause (z), in the aggregate, shall not have been
capitalized by Company in Cash or other property, including equipment, in
excess of 3% of the book value of the total assets of Company and its
Subsidiaries and provided further that, substantially all the assets
----------------
thereof shall be subject to a First Priority Lien in favor of the
Collateral Agent, and the Collateral Agent shall be reasonably satisfied
that such Liens are substantially similar in respect of priority,
enforceability and realization to those granted to Collateral Agent by the
Company.
34
"Permitted Earn-Out Agreements" means any other agreement by Company
to pay the seller or sellers of any Person or assets acquired in accordance
with the provisions of subsection 7.7(xiii) at any time following the
consummation of such acquisition by reference to the financial performance
of the person or assets acquired; provided that, the Earnout Value (as
--------
defined in the definition of "Acquisition Consideration") under a Permitted
Earn-Out Agreement included for purposes of calculating Acquisition
Consideration for a Permitted Acquisition shall not exceed 15% of the
Acquisition Consideration under the related Permitted Acquisition.
"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly
prohibited by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess
of 5 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral
on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced
with respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material respect
35
with the ordinary conduct of the business of Holdings or any of its
Subsidiaries or resulting in a material diminution in the value of any
Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as
security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease (b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (b), so
long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to operating leases or Capital Leases permitted by
this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with
the importation of goods;
(x) any zoning or similar law or right reserved to or vested in
any governmental office or agency to control or regulate the use of
any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Holdings or such
Subsidiary; and
(xiii) Liens existing on the Effective Date and listed on
Schedule 7.2.
------------
"Permitted Foreign Subsidiary" means any wholly-owned Subsidiary of
Company which is organized under the laws of Canada or a Caribbean
jurisdiction; provided however that, all such Subsidiaries, in the
----------------
aggregate, shall have not been capitalized by Company in Cash or other
property, including equipment, in excess of 3% of the book value of the
total assets of Company and its Subsidiaries; provided further that,
----------------
substantially all the assets thereof shall be subject to a
36
First Priority Lien in favor of the Collateral Agent, and Collateral Agent
shall be reasonably satisfied that such Liens are substantially similar in
respect of priority, enforceability and realization to those granted to
Collateral Agent by the Company.
"Permitted Sale Leaseback Transactions" means one or more sale
leaseback transaction otherwise prohibited by subsection 7.9 so long as (i)
the assets sold in such transaction constitute Cranes and Lifting
Equipment, Excavation Equipment, Trucks and Trailers and/or vessels or
barges, (ii) the aggregate sales price of the assets sold in all such
transactions in effect as of any date of determination does not exceed 10%
of total consolidated assets of Company and its Subsidiaries as of such
date, (iii) such assets are sold in such transactions for Cash in an amount
not less than their Orderly Liquidation Value, and (iv) within 180 days,
the proceeds of such sale are either reinvested by Company in Cranes and
Lifting Equipment, Excavation Equipment, Trucks and Trailers and/or vessels
or barges or are applied to repay Loans.
"Permitted Seller Note" means a promissory note containing
subordination provisions in substantially the form of, or no less favorable
to Lenders (in the reasonable judgment of Administrative Agent) than the
subordination provisions contained in, Exhibit XVIII annexed hereto,
-------------
representing any Indebtedness of Holdings or Company incurred in connection
with any Permitted Acquisition payable to the seller in connection
therewith, as such note may be amended, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.14B; provided
--------
that, no Permitted Seller Note shall (i) be guarantied by any Subsidiary of
Company or secured by any property of Holdings, Company or any of its
Subsidiaries, (ii) bear cash interest at a rate greater than 15% per annum;
or, (iii) provide for any prepayment or repayment of all or any portion of
the principal thereof prior to the date of the final scheduled installment
of principal of the Loans.
"Permitted Subsidiaries" means Permitted Domestic Subsidiaries and
Permitted Foreign Subsidiaries.
"Permitted Tax Distribution" means, for so long as Holdings or Company
is treated as a partnership or disregarded as an entity separate from its
owners for federal income tax purposes, distributions to the partners of
Holdings or Company in an amount with respect to any period after June 30,
1998, not to exceed the amount of distributions, whether paid or accrued,
necessary to permit Holdings' and Company's partners to pay federal and
state income tax liabilities arising from income of Holdings or Company and
their respective Subsidiaries and taxable to such partners, including the
tax distributions contemplated by Holdings' and Company's respective
partnership agreements attributable to such partners solely as a result of
Holdings or Company (and any intermediate entity through which any such
partner owns its interest in Holdings or Company) being a partnership or
similar pass-through entity for federal income tax purposes.
37
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and
including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"Pledge and Security Agreement" means the Pledge and Security
Agreement substantially in the form of Exhibit XIII annexed hereto, as such
------------
Pledge and Security Agreement may be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Pledge and Security Agreement.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Preferred Units" means Series A preferred interests of Holdings with
an initial liquidation value of $22,500,000.
"Proposed Insurance Reinvestment Proceeds" has the meaning assigned to
that term in subsection 6.4C.
"Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Term Loan Commitment or the Term Loan of
any Lender, the percentage obtained by dividing (x) the Term Loan Exposure
of that Lender by (y) the aggregate Term Loan Exposure of all Lenders, (ii)
with respect to all payments, computations and other matters relating to
the Revolving Loan Commitment or the Revolving Loans of any Lender or any
Letters of Credit issued or participations therein purchased by any Lender
or any participations in any Swing Line Loans purchased by any Lender, the
percentage obtained by dividing (x) the Revolving Loan Exposure of that
Lender by (y) the aggregate Revolving Loan Exposure of all Lenders, and
(iii) for all other purposes with respect to each Lender, the percentage
obtained by dividing (x) the sum of the Term Loan Exposure of that Lender
plus the Revolving Loan Exposure of that Lender by (y) the sum of the
aggregate Term Loan Exposure of all Lenders plus the aggregate Revolving
Loan Exposure of all Lenders, in any such case as the applicable percentage
may be adjusted by assignments permitted pursuant to subsection 10.1. The
Pro Rata Share of each Lender as of the Effective Date for purposes of each
of clauses (i), (ii) and (iii) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
------------
38
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary in order to
create or perfect Liens on any IP Collateral.
"Qualified Preferred Units" means payment-in-kind preferred units of
Holdings that have no cash-call or cash payment provision exercisable
during the term of the Loans or the Term Loan (other than Qualified
Preferred Units referred to in subsection 7.1(viii)).
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recapitalization Agreement" means that certain Amended and Restated
Recapitalization Agreement dated as of July 21, 1998, by and among Company,
Bain/ACR L.L.C. and ACR Management L.L.C., in the form delivered to Agents
and Lenders prior to their execution of the Existing Credit Agreement and
as such agreement may be amended from time to time thereafter to the extent
permitted under subsection 7.14A.
"Recapitalization Transactions" means the series of transactions
described in Schedule 1.1(iv) annexed hereto.
----------------
"Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-
party purchasers and encumbrancers of the affected real property. For
purposes of this definition, the term "Record Document" means, with respect
to any Leasehold Property, (a) the lease evidencing such Leasehold Property
or a memorandum thereof, executed and acknowledged by the owner of the
affected real property, as lessor, or (b) if such Leasehold Property was
acquired or subleased from the holder of a Recorded Leasehold Interest, the
applicable assignment or sublease document, executed and acknowledged by
such holder, in each case in form sufficient to give such constructive
notice upon recordation and otherwise in form reasonably satisfactory to
Administrative Agent.
"Reference Lenders" means Fleet, and not more than two other Lenders
selected by Fleet with the consent of Company.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iv).
"Register" has the meaning assigned to that term in subsection 2.1D.
39
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the Recapitalization
Agreement, the Securityholders Agreement, the Bain Advisory Services
Agreement, the Partnership Agreements, the Senior Notes, the Senior Note
Indenture, the Senior Discount Debentures the Senior Discount Indenture and
the Carlisle Acquisition Agreement.
"Related Party" means with respect to any Person, (i) any stockholder,
officer, employee or partner of such Person and (a) trusts for the benefit
of such Person or the spouses, issue, parents or other relatives of such
Person, (b) entities controlling or controlled by such Person and (c) in
the event of death of any such individual Person, heirs or testamentary
legatees of such Person and, in addition, with respect to Bain, shall
include the Bain Investors or (ii) any Affiliate thereof.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the migration of any Hazardous Materials through the air, soil,
surface water or groundwater.
"Rental Equipment" shall mean (i) all of the Cranes and Lifting
Equipment, (ii) all of the Trucks and Trailers, and (iii) all of the
Excavation Equipment, that in each case, are held for resale or held for
lease by Company or a Permitted Subsidiary.
"Requisite Class Lenders" means, at any time of determination (i) for
the Class of Lenders having Term Loan Exposure, Lenders having or holding
at least a majority of the sum of the aggregate Term Loan Exposure of all
Lenders, and (ii) for the Class of Lenders having Revolving Loan Exposure,
Lenders having or holding at least a majority of the sum of the aggregate
Revolving Loan Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding at least a
majority of the aggregate Revolving Loan Exposure and Term Loan Exposure of
all Lenders.
"Responsible Officer" means any of the chairman of the board (if an
officer), the president, any senior or executive vice president, the
general counsel, its principal financial officer or principal accounting
officer, the secretary or the treasurer of Holdings or, as applicable, any
Subsidiary of Holdings.
40
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock, partnership interest or equivalent equity interests of Holdings or
Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock, partnership interest or equivalent equity
interests to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
by Holdings or the Company, respectively, direct or indirect, of any shares
of any class of stock of Holdings or Company now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of Holdings or Company now or hereafter outstanding, and
(iv) any cash payment or prepayment of principal of, premium, if any, or
interest on, or redemption, purchase, retirement, defeasance (including in-
substance or legal defeasance), sinking fund or similar payment with
respect to, any Subordinated Indebtedness or the Senior Notes.
"Revolver Leverage Ratio" means the ratio of (i) average monthly
principal amount of the Loans, Capital Leases and Additional Secured
Indebtedness outstanding, less cash on hand as of the date of
----
determination, for the quarterly period ending on the last day of any
Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period then ended, in each case as set forth in the most recent
Compliance Certificate delivered by Company to Administrative Agent
pursuant to clause (iv) of subsection 6.1.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iii) or (v), and
"Revolving Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Revolving Loan Commitment Termination Date" means the earlier of (i)
July 22, 2004 or (ii) the date of termination in whole of the Revolving
Loan Commitments pursuant to subsection 2.4B or Section 8.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b)
----
in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in
each case net of any participations purchased by other Lenders in such
Letters of Credit or any unreimbursed drawings thereunder) plus (c) the
----
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any
Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate
----
outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders) plus (e) the aggregate
----
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans.
41
"Revolving Loans" means (i) the Loans made by Lenders to Company
pursuant to subsection 2.1A(i) of the Existing Credit Agreement which
remain outstanding as of the Effective Date and (ii) any Loans made by
Lenders to Company pursuant to subsection 2.1A(iii) or (v) of this
Agreement.
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E of this Agreement to evidence Revolving Loans
and (ii) any promissory notes issued by Company pursuant to the last
sentence of subsection 10.1B(i) in connection with assignment of the
Revolving Loan Commitments or Revolving Loans of any Lenders, in each case
in substantially in the form of Exhibit IV-C annexed hereto, as they may be
------------
amended, supplemented or otherwise modified from time to time.
"Second Priority Term Loans" means the second priority secured term
loans of Company outstanding pursuant to the Second Priority Term Loan
Credit Agreement in the original principal amount of $50,000,000.
"Second Priority Term Loan Credit Agreement" means that certain Term
Loan Credit Agreement dated July 22, 1998, by and among Company, Holdings,
GSCP, as Arranger and Syndication Agent, DLJ, as Documentation Agent and
Fleet, as Administrative Agent and Collateral Agent, as amended as of the
Effective Date and as such Term Loan Credit Agreement may be further
amended, supplemented, refinanced, renewed, extended or otherwise modified
from time to time to the extent permitted under subsection 7.14C.
"Second Priority Term Loan Credit Documents" means the Second Priority
Term Loan Credit Agreement, the promissory notes issued thereunder and each
other document executed in connection with the Second Priority Term Loan
Credit Agreement.
"Secured Parties" has the meaning assigned to that term in the
Intercreditor Agreement.
"Securities" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest
or participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
42
"Securityholders Agreement" means that certain securityholders
agreement among the General Partner, Holdings and various equityholders of
such entities as amended, modified and supplemented from time to time to
the extent permitted under subsection 7.14.
"Senior Discount Debentures" means at least $25,000,000 in initial
aggregate principal amount of Senior Discount Debentures of Holdings and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Capital Corporation issued pursuant to the Senior
Discount Indenture, as amended by the First Supplemental Amendment thereto
and as further amended from time to time as permitted pursuant to
subsection 7.14.
"Senior Discount Indenture" means the indenture pursuant to which the
Senior Discount Debentures are issued, as amended by the First Supplemental
Amendment thereto and as such indenture may be further amended from time to
time to the extent permitted under subsection 7.14.
"Senior Note Indenture" means the indenture pursuant to which the
Senior Notes are issued, as amended by the First Supplemental Amendment
thereto and as such indenture may be further amended from time to time to
the extent permitted under subsection 7.14.
"Senior Notes" means the $155,000,000 in aggregate principal amount of
Senior Notes due July, 2008 of Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corporation issued pursuant to the Senior Note Indenture, including any
notes issued in exchange for such notes as contemplated under the Senior
Note Indenture, as amended by the First Supplemental Amendment thereto and
as further amended from time to time as permitted pursuant to subsection
7.14.
"Series B Preferred Units" means Series B preferred interests of
Holdings.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in
any way by Company or any of its Subsidiaries) containing subordination
provisions substantially in the form of, or no less favorable to Lenders
(in the reasonable judgment of Administrative Agent) than the subordination
provisions contained in Exhibit XVIII annexed hereto, as such note may be
-------------
amended, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.14.
"Solvent" means, with respect to any Person, that as of the date of
determination both (a) (i) the then fair saleable value of the property
(sold as a going concern) of such Person is (y) greater than the total
amount of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person's capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and
43
(iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (b) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Holdings or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Holdings or any of its Subsidiaries, (iii) the obligations of third party
insurers of Holdings or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Holdings or any of
its Subsidiaries, (v) performance, payment, deposit or surety obligations
of Holdings or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (vi) such other obligations of Company and its
Subsidiaries as are reasonably acceptable to Administrative Agent and the
Issuing Lender and otherwise permitted to exist pursuant to the terms of
this Agreement; provided that Standby Letters of Credit may not be issued
--------
for the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"Subordinated Indebtedness" means (i) any Permitted Seller Notes, (ii)
any Shareholder Subordinated Notes, and (iii) any other Indebtedness of
Holdings, or any of its Subsidiaries, subordinated in right of payment to
the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders; provided that
Subordinated Indebtedness shall not include intercompany indebtedness owed
to Company or Permitted Subsidiaries.
"Subsidiary" with respect to any Person means any corporation,
partnership or limited liability company, the financial statements of which
are consolidated with the financial statements of such Person for GAAP
financial reporting purposes. The term "Subsidiary", when used herein
without reference to any particular Person, shall mean a Subsidiary of the
Company.
"Subsidiary Guarantor" means any Subsidiary of Holdings, other than
Company and Excluded Subsidiaries, that is a party to the Subsidiary
Guaranty as of the Effective Date, and any other Subsidiary of Holdings
that executes and delivers a counterpart thereof from time to time
thereafter pursuant to subsection 6.8.
44
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by all Subsidiaries of Holdings (other than Company and the
Excluded Subsidiaries) on the Closing Date and to be executed and delivered
by additional Subsidiaries of Holdings from time to time thereafter in
accordance with subsection 6.8, substantially in the form of Exhibit XIV
-----------
annexed hereto, as such Subsidiary Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"Supplemental Appraisal" shall mean a desktop appraisal conducted each
calendar year (commencing calendar year 1999) to determine the Orderly
Liquidation Value of the Company's Rental Equipment classified as crawler
cranes, conventional truck cranes, tower cranes and crane attachments (such
classification to be made by the Independent Appraiser) prepared by the
Independent Appraiser.
"Swing Line Lender" means Fleet, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iv) of this Agreement.
"Swing Line Note" means (i) any promissory note of Company issued to
the Swing Line Lender pursuant to Section 2.1E - on the Effective Date and
(ii) any promissory note issued by Company to any successor Agent and Swing
Line Lender pursuant to the last sentence of subsection 9.5B, substantially
in the form of Exhibit IV-D annexed hereto, as it may be amended,
------------
supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "Tax on the overall net income" of a Person
--------
shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or
gains (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate
45
to a particular jurisdiction, or otherwise) of that Person (and/or, in the
case of a Lender, its lending office).
"Term Loan" means a Loan made by a Lender to Company as a term loan
pursuant to subsection 2.1A(ii) or (v), and "Term Loans" means any such
Loan or Loans, collectively.
"Term Loan Commitment" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A(ii) or (v), and "Term Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any date
of determination (i) prior to the funding of the Term Loans, that Lender's
Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.
"Term Notes" means (i) the promissory notes of Company issued pursuant
to subsection 2.1E on the Effective Date to evidence the Term Loans and
(ii) any promissory notes issued by Company pursuant to the last sentence
of subsection 10.1B(i) in connection with assignments of the Term Loan
Commitments or Term Loans of any Lenders, in each case substantially in the
form of Exhibit IV-A Annexed hereto, as they may be amended, supplemented
------------
or otherwise modified from time to time.
"Title Company" means, collectively, First American Title Insurance
Company and/or one or more other title insurance companies reasonably
satisfactory to Syndication Agent and Administrative Agent.
"Total Leverage Ratio" means the ratio of (i) average monthly
outstanding principal amount of Consolidated Total Debt, less cash on hand
as of the date of determination, for the quarterly period ending on the
last day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period then ended, in each case as set forth in the
most recent Compliance Certificate delivered by Company to Administrative
Agent pursuant to clause (iv) of subsection 6.1; provided, however, that
-----------------
with respect to any period during which a Permitted Acquisition occurs, for
purposes of calculating the Total Leverage Ratio in the definition of
Applicable Total Leverage Ratio, the provisions of subsection 7.6D with
respect to any cost savings that would otherwise be given effect in
calculating Consolidated Adjusted EBITDA as a result of such provisions
shall not be given effect until such cost savings are actually realized.
"Total Utilization of Commitments" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all
outstanding Term Loans, (ii) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any
46
amount drawn under any Letter of Credit but not yet so applied), (iii) the
aggregate principal amount of all outstanding Swing Line Loans, and (iv)
the Letter of Credit Usage.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"Transaction Costs" means the fees, costs, premiums, penalties and
expenses payable by Holdings and Company in connection with the
transactions contemplated by the Loan Documents, the 1999 Acquisition
Documents and the Related Agreements.
"Transitory Subsidiary" means a Subsidiary of Holdings organized
solely for the purpose of facilitating a Permitted Acquisition or which was
acquired pursuant to a Permitted Acquisition and which immediately after
the consummation of such Permitted Acquisition transfers, sells or
otherwise disposes of all assets acquired pursuant to such Permitted
Acquisition to Company or a Permitted Domestic Subsidiary.
"Trucks and Trailers" shall mean each item of equipment that is owned
by the Company or its Permitted Subsidiaries that constitutes any of the
following: a forklift, a truck, a trailer or any other miscellaneous
equipment, other than Cranes and Lifting Equipment and Excavation Equipment
(such miscellaneous equipment used by the Company or its Permitted
Subsidiaries in the provision of crane rental and lifting and/or excavation
services and subject to the approval of the Administrative Agent, such
approval not to be unreasonably withheld, prior to inclusion in the
definition of Eligible Trucks and Trailers); including, without limitation,
those items identified on Schedule 2.1(d)(B) to the Pledge and Security
-----------------
Agreement.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"wholly-owned" means, with respect to any Subsidiary, that all of the
equity Securities (other than any such security in the nature of a
director's qualifying share) of such Subsidiary are owned by another Person
or one or more wholly-owned Subsidiaries of such other Person; provided,
--------
any Subsidiary that is a limited partnership shall be deemed to be wholly-
owned by another Person so long as such other Person and its wholly-owned
Subsidiaries owns all of the limited partnership interests of such
Subsidiary.
"Year 2000 Compliant" means that all computer applications owned and
controlled by Holdings or any of its Subsidiaries that are material to
Holdings and its Subsidiaries' business and
47
operations will be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000, except to the extent that a
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
------------------------------------------------------------------------
Agreement.
----------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
December 31, 1998 financial statements referred to in subsection 5.3.
Notwithstanding the foregoing, except as otherwise specifically provided herein,
all computations determining compliance with subsection 2.4 and Section 7, and
the calculation of the Total Leverage Ratio, the Leverage Ratio and Revolving
Leverage Ratio for all purposes set forth herein, in each case, including the
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the December 31, 1998 financial statements of Holdings and its
Subsidiaries delivered to the Lenders, but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 and its interpretations
(including non-cash write-ups and non-cash charges relating to inventory, fixed
assets and in-process research and development, in each case arising in
connection with any Permitted Acquisitions) and APB 17 and its interpretations
(including non-cash charges relating to intangibles and goodwill arising in
connection with any Permitted Acquisitions).
1.3 Other Definitional Provisions and Rules of Construction.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
48
D. Each reference to a "Fiscal Quarter period" of a specified number of
Fiscal Quarters shall be a reference to a period of consecutive Fiscal Quarters
of such number.
1.4 Changes in GAAP.
---------------
In the event that a change in GAAP or other accounting principles and
policies after the date hereof affects in any material respect the calculations
of the compliance by Holdings and its Subsidiaries with the covenants contained
herein, Lenders, Company and Holdings agree to negotiate in good faith to amend
the affected covenants (and related definitions) to compensate for the effect of
such changes so that the restrictions, limitations and performance standards
effectively imposed by such covenants, as so amended, are substantially
identical to the restrictions, limitations and performance standards imposed by
such covenants as in effect on the date hereof; provided, that if Requisite
--------
Lenders, Company and Holdings fail to reach agreement with respect to such
amendment within a reasonable period of time following the date of effectiveness
of any such change, calculation of compliance by Holdings and its Subsidiaries
with the covenants contained herein shall be determined in accordance with GAAP
as in effect immediately prior to such change.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
-------------------------------------------------
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Holdings and Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(ii) and (iii) and Swing Line Lender hereby agrees
to make the Loans described in subsection 2.1A(iv).
(i) Existing Revolving Loans. Company acknowledges and confirms that
------------------------
each Existing Lender holds Existing Revolving Loans in the respective
principal amounts outstanding as of the Effective Date after giving effect
to the application of Loans made on the Effective Date set forth opposite
its name on Schedule 2.1 annexed hereto. Company hereby represents,
------------
warrants, agrees, covenants and (1) reaffirms that it is not aware of any
defense, set off, claim or counterclaim against any Agent or Lender in
regard to its Obligations in respect of such Existing Loans and (2)
reaffirms its obligation to pay such Existing Revolving Loans in accordance
with the terms and conditions of this Agreement and the other Loan
Documents. Based on the foregoing, (A) Company and each Lender agree that,
other than any Existing Revolving Loans to be repaid from the proceeds of
the Term Loans on the Effective Date, any amounts owed (whether or not
presently due and payable, and including all interest and fees accrued to
the Effective Date (which shall be payable on the next Interest Payment
Date with respect to the Existing Revolving Loans to which such interest
relates)) by Company to Existing Lenders or in respect of the Existing
Revolving Loans, shall, as of the Effective Date, be converted to,
maintained as, and owed by Company under or in respect of Revolving Loans
hereunder. Amounts repaid or prepaid in respect of Existing Revolving Loans
may
49
be repaid and reborrowed pursuant to Section 2.1A(iii) below to but
excluding the Revolving Loan Commitment Termination Date.
(ii) Term Loans. Each Lender severally agrees to lend to Company on
----------
the Effective Date an amount not exceeding its Term Loan Commitment to be
used for the purposes identified in subsection 2.5A. The amount of each
Lender's Term Loan Commitment is set forth opposite its name on Schedule
--------
2.1 annexed hereto and the aggregate amount of the Term Loan Commitments is
---
$250,000,000; provided that the Term Loan Commitments of Lenders shall be
--------
adjusted to give effect to any assignments of the Term Loan Commitments
pursuant to subsection 10.1B. Each Lender's Term Loan Commitment shall
expire immediately and without further action on July 2, 1999 if the Term
Loans are not made on or before that date. Company may make only one
borrowing under the Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(ii) and subsequently repaid or prepaid may not be
reborrowed.
(iii) Revolving Loans. Each Lender severally agrees, subject to the
---------------
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company
from time to time during the period from the Effective Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount (including its Pro Rata Share of Existing Revolving Loans
outstanding) not exceeding its Pro Rata Share of the aggregate amount of
the Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5. The amount of each Lender's Revolving Loan Commitment as of
the Effective Date is set forth opposite its name on Schedule 2.1 annexed
------------
hereto and the aggregate amount of the Revolving Loan Commitments as of the
Effective Date is $425,000,000; provided that, the Revolving Loan
--------
Commitments of Lenders shall be adjusted to give effect to any assignments
of the Revolving Loan Commitments pursuant to subsection 10.1B; and
provided, further, that the amount of the Revolving Loan Commitments shall
-----------------
be reduced from time to time by the amount of any reductions thereto made
pursuant to subsections 2.4B(ii). Each Lender's Revolving Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full no
later than the Revolving Loan Commitment Termination Date. Amounts borrowed
under this subsection 2.1A(iv) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding
in no event shall the Total Utilization of Commitments at any time exceed
the Adjusted Borrowing Base Amount then in effect and in no event shall the
Total Utilization of Revolving Loan Commitments exceed the aggregate amount
of all Revolving Loan Commitments then in effect.
(iv) Swing Line Loans. Swing Line Lender hereby agrees, subject to
-----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company
50
from time to time during the period from the Effective Date to but
excluding the Revolving Loan Commitment Termination Date by making Swing
Line Loans to Company in an aggregate amount not exceeding the amount of
the Swing Line Loan Commitment to be used for the purposes identified in
subsection 2.5, notwithstanding the fact that such Swing Line Loans, when
aggregated with Swing Line Lender's outstanding Revolving Loans and Swing
Line Lender's Pro Rata Share of the Letter of Credit Usage then in effect,
may exceed Swing Line Lender's Revolving Loan Commitment. The original
amount of the Swing Line Loan Commitment is $30,000,000; provided that any
--------
reduction of the Revolving Loan Commitments made pursuant to subsection
2.4B(ii) which reduces the aggregate Revolving Loan Commitments to an
amount less than the then current amount of the Swing Line Loan Commitment
shall result in an automatic corresponding reduction of the Swing Line Loan
Commitment to the amount of the Revolving Loan Commitments, as so reduced,
without any further action on the part of Company, Administrative Agent or
Swing Line Lender. The Swing Line Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Swing Line Loans and all
other amounts owed hereunder with respect to the Swing Line Loans shall be
paid in full no later than that date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(iv), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 11:00 A.M. (New York City
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is given
which Swing Line Lender requests Lenders to prepay. Anything contained in
this Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not
to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing
Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid shall
no longer be outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note, if any, of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note, if any, of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line Lender
(up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient
to repay in full the Refunded Swing Line
51
Loans. If any portion of any such amount paid (or deemed to be paid) to
Swing Line Lender should be recovered by or on behalf of Company from Swing
Line Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share (calculated, in the case of the foregoing clause (b),
immediately prior to such termination of the Revolving Loan Commitments) of
the unpaid amount of such Swing Line Loans together with accrued interest
thereon. Upon one Business Day's notice from Swing Line Lender, each Lender
shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In the
event any Lender fails to make available to Swing Line Lender the amount of
such Lender's participation as provided in this paragraph, Swing Line
Lender shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by Swing Line
Lender for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. In the event Swing Line Lender receives a
payment of any amount in which other Lenders have purchased participations
as provided in this paragraph, Swing Line Lender shall promptly distribute
to each such other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Holdings or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party thereto;
or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that such obligations of
--------
each Lender are subject to the condition that (X) Swing Line Lender
believed in good faith that all conditions under subsection 4.2 (in the
case of Loans made on the Effective Date) and 4.3 (in the case of all
Loans) to the making of the applicable Refunded Swing Line Loans or other
unpaid Swing Line Loans, as the case may be, were satisfied at the time
such Refunded Swing Line Loans or unpaid Swing Line Loans were made or (Y)
the satisfaction of any such condition not satisfied had been waived in
accordance with
52
subsection 10.6 prior to or at the time such Refunded Swing Line Loans or
other unpaid Swing Line Loans were made.
(v) Increased Amounts. Company may by written notice to Agents elect to
-----------------
increase the Revolving Commitments and/or the aggregate Term Loan Commitments
(any such increase, "New Revolving Loan Commitments" or the "New Term Loan
Commitments," as applicable), by an amount not in excess of $100,000,000 in
the aggregate and not less than $50,000,000 individually and integral
multiples of $5,000,000 in excess of that amount. Each such notice shall
specify (A) the date (each, an "Increased Amount Date") on which Company
proposes that the New Revolving Loan Commitments or that the New Term Loan
Commitments, as applicable. shall be effective and that Term Loans made
pursuant to the New Term Loan Commitments (collectively, "New Term Loans")
shall be made, as applicable, which shall be made not less than 10 Business
Days after the date on which such notice is delivered to Administrative Agent
and (B) the identity of each Lender or other Person (each, a "New Revolving
Lender" or a "New Term Loan Lender", as applicable) to whom Company proposes
any portion of such New Revolving Loan Commitments or New Term Loan
Commitments, as applicable, be allocated and the amounts of such allocations,
provided (x) the New Revolving Loan Commitments or the New Term Loan
Commitments, as applicable, shall be arranged and syndicated by Agents and
Company shall pay to Agents such customary fees and expenses in connection
with arranging, syndicating and providing the New Revolving Loan Commitments
or New Term Loan Commitments, as applicable, as may be necessary in the
reasonable judgment of Agents, to achieve a successful syndication thereof
and no portion of such fees shall be allocable to any persons other than
Agents and those persons providing the New Revolving Loan Commitments or New
Term Loan Commitments, as applicable, (y) any Lender approached by Company
may elect or decline, in its sole discretion, to provide a New Revolving Loan
Commitment or a New Term Loan Commitment. Such New Revolving Loan Commitments
or New Term Loan Commitments shall become effective and any such New Term
Loans shall be made, as applicable, as of such Increased Amount Date provided
(1) no Default or Event of Default shall exist on such Increased Amount Date
before or after giving effect to such New Revolving Loan Commitments or New
Term Loan Commitments, as applicable; (2) both before and after giving effect
to the making of any New Term Loans each of the conditions set forth in
subsection 4.3 shall be satisfied; (3) each increase in Revolving Loan
Commitments or New Term Loan Commitments, as applicable, shall be effected
pursuant to one or more joinder agreements, in each case in form and
substance reasonably satisfactory to Administrative Agent, and executed and
delivered to Administrative Agent and recorded in the Register, each of which
shall be subject to the requirements set forth in subsection 2.7B(iii)(a);
(4) Company shall make any payments required pursuant to subsection 2.6D; (5)
Company shall have delivered to Lenders pro forma financial statements
indicating that not less than 25% of the Revolving Loan Commitments (after
giving effect to any increase thereto pursuant to this provision) will remain
outstanding through the Revolving Loan Commitment Termination Date; and (6)
Company shall deliver or cause to be delivered any legal opinions or other
documents reasonably requested by Administrative Agent in
53
connection with any such transaction. On any Increased Amount Date on which
New Revolving Loan Commitments are effected, subject to the satisfaction of
the foregoing terms and conditions, (a) each of the Revolving Lenders shall
assign to each of the New Revolving Lenders, and each of the New Revolving
Lenders shall purchase from each of the Revolving Lenders, at the principal
amount thereof (together with accrued interest), such interests in the
Revolving Loans outstanding on such Increased Amount Date as shall be
necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans will be held by Revolving Lenders and New
Revolving Lenders ratably in accordance with their Revolving Loan Commitments
after giving effect to the addition of such New Revolving Loan Commitments to
the Revolving Commitments, (b) each New Revolving Loan Commitment shall be a
Revolving Loan Commitment, and (c) each New Revolving Lender shall become a
Revolving Lender. On any Increased Amount Date on which New Term Loan
Commitments are effective subject to the satisfaction of the foregoing terms
and conditions, (i) each New Lender shall make a New Term Loan to Company in
an amount equal to its New Term Loan Commitment, (ii) each New Term Loan
shall be deemed a Term Loan, and (iii) each New Term Loan Lender shall become
a Lender. The Administrative Agent shall notify the Lenders promptly upon
receipt of Company's notice of each Increased Amount Date and in respect
thereof the New Revolving Loan Commitments and the New Revolving Lenders or
the New Term Commitments and the New Lenders, as applicable, and, in the case
of each notice to any Revolving Lender, the respective interests in such
Revolving Lender's Revolving Loans subject to the assignments contemplated by
this subsection. Notwithstanding anything contained herein to the contrary,
the Applicable Base Rate Margins and Applicable Eurodollar Rate Margins
applicable to any New Term Loans or any Loans made under the New Revolving
Loan Commitment shall be less than or equal to the then effective Applicable
Base Rate Margins and Applicable Eurodollar Rate Margins applicable to other
Loans.
B. Borrowing Mechanics. Term Loans and Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to a request by Swing
Line Lender pursuant to subsection 2.1A(iv) for the purpose of repaying any
Refunded Swing Line Loans or Revolving Loans made pursuant to subsection 3.3B
for the purpose of reimbursing any Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it) shall be in an aggregate minimum amount
of $500,000 and integral multiples of $100,000 in excess of that amount;
provided that Term Loans and Revolving Loans made on any Funding Date as
--------
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $50,000 in excess of that
amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $100,000 and integral multiples of $100,000 in excess of that
amount. Whenever Company desires that Lenders make Term Loans or Revolving
Loans it shall deliver to Administrative Agent a Notice of Borrowing no later
than 12:00 Noon (New York City time) at least three Business Days in advance of
the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least
one Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Administrative Agent a Notice of Borrowing no later
than 12:00 Noon (New York City time) on the proposed Funding Date. The Notice
of Borrowing shall specify (i) the proposed
54
Funding Date (which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of Swing Line Loans, that such Loans shall be Base
Rate Loans, (iv) in the case of any Term Loans or Revolving Loans, whether such
Loans shall be Base Rate Loans or Eurodollar Rate Loans, (v) in the case of any
Loans requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor and, (vi) that, after giving effect to the Loans requested
thereby, the Total Utilization of Commitments will not exceed the Adjusted
Borrowing Base Amount then in effect and, in the case of Revolving Loans or
Swing Line Loans, the Total Utilization of Revolving Loan Commitments shall not
exceed the aggregate amount of all Revolving Loan Commitments then in effect.
Term Loans and Revolving Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
--------
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing. Each Lender shall make
the
55
amount of its Loan available to Administrative Agent not later than 1:00 P.M.
(New York City time) on the applicable Funding Date, and Swing Line Lender shall
make the amount of its Swing Line Loan available to Administrative Agent not
later than 2:00 P.M. (New York City time) on the applicable Funding Date, in
each case in same day funds in Dollars, at the Funding and Payment Office.
Except as provided in subsection 2.1A(iv) or subsection 3.3B with respect to
Revolving Loans used to repay Refunded Swing Line Loans or to reimburse any
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it, upon satisfaction or waiver of the conditions precedent specified in
subsections 4.2 (in the case of Loans made on the Closing Date) and 4.3 (in the
case of all Loans), Administrative Agent shall make the proceeds of such Loans
available to Company on the applicable Funding Date by causing an amount of same
day funds in Dollars equal to the proceeds of all such Loans received by
Administrative Agent from Lenders or Swing Line Lender, as the case may be, to
be credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to in
subsection 10.8, a register for the recordation of the names and addresses
of Lenders and the Commitments and Loans of each Lender from time to time
(the "Register"). The Register shall be available for inspection by
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Term Loan
Commitment, the Term Loans, the Revolving Loan Commitment and the Revolving
Loans from time to time of each Lender, the Swing Line Loan Commitment and
the Swing Line Loans from time to time of Swing Line Lender, and each
repayment or prepayment in respect of the principal amount of the Term
56
Loans and the Revolving Loans of each Lender or the Swing Line Loans of
Swing Line Lender. Any such recordation shall be conclusive and binding on
Company and each Lender, absent manifest error; provided that failure to
--------
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of the Term Loan and each
Revolving Loan made by it and each payment in respect thereof. Any such
recordation shall be conclusive and binding on Company, absent manifest
error; provided that, failure to make any such recordation, or any error in
--------
such recordation, shall not affect any Lender's Commitments or Company's
Obligations in respect of any applicable Loans; and provided, further that,
-----------------
in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern and be conclusive
and binding on such Lender, absent manifest error.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates Fleet (or such Person who may serve as
Successor Administrative Agent) to serve as Company's agent solely for
purposes of maintaining the Register as provided in this subsection 2.1D,
and Company hereby agrees that, to the extent Fleet (or such Person who may
serve as Successor Administrative Agent) serves in such capacity, Fleet and
its officers, directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 10.3.
E. Optional Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Effective Date or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to subsection
10.1) on the Effective Date (or, if such notice is delivered after the Effective
Date, promptly after Company's receipt of such notice) a promissory note or
promissory notes to evidence such Lender's Revolving Loans, Term Loans
57
or Swing Line Loans, substantially in the form of Exhibit IV, IVA or Exhibit V
---------------- ---------
annexed hereto, respectively, with appropriate insertions.
2.2 Interest on the Loans.
----------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Loan (other than a Swingline Loan) shall bear interest on the unpaid
principal amount thereof from the date made through but excluding the date of
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted Eurodollar Rate. Subject to the
provisions of subsection 2.7, each Swing Line Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate.
The applicable basis for determining the rate of interest with respect to any
Loan (other than a Swingline Loan) shall be selected by Company initially at the
time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B. The basis for determining the interest rate with respect to
any Loan (other than a Swingline Loan) may be changed from time to time pursuant
to subsection 2.2D. If on any day a Loan (other than a Swingline Loan) is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, each Loan
(other than Swing Line Loans) shall bear interest through maturity as
follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
----
the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin.
----
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, a one-, two-, three- or six-month period or, if
deposits in the interbank Eurodollar market are generally available for such
period (as determined by each Lender making, converting to or continuing such
Eurodollar Rate Loan), a twelve-month period; provided that:
--------
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate
58
Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar
Rate Loan;
(ii) in the case of immediately successive Interest Periods applicable
to a Eurodollar Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Term Loans
shall extend beyond July 20, 2006, and no Interest Period with respect to
any portion of the Revolving Loans shall extend beyond the Revolving Loan
Commitment Termination Date;
(vi) if requested by Syndication Agent, Company shall not select an
Interest Period with respect to the Term Loan of longer than one month
prior to the end of the Initial Period;
(vii) there shall be no more than fifteen (15) Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to but excluding each
Interest Payment Date applicable to that Loan, upon any prepayment of that Loan
(to the extent accrued on the amount being prepaid) and at maturity (including
final maturity); provided that in the event any Swing Line Loans or any
--------
Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4B, interest accrued on such Swing Line Loans or Revolving Loans through the
date of such prepayment shall be payable on the next succeeding Interest Payment
Date applicable to Base Rate Loans (or, if earlier, at final maturity).
59
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Term Loans or Revolving Loans equal to $500,000 and integral
multiples of $100,000 in excess of that amount from Loans bearing interest at a
rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that Loans
-----------------
may not be continued as or converted to Eurodollar Rate Loans with an Interest
Period longer than one month prior to the end of the Initial Period.
Company shall deliver a Notice of Conversion/Continuation at any time after
the Effective Date to Administrative Agent no later than 12:00 Noon (New York
City time) at least one Business Day in advance of the proposed conversion date
(in the case of a conversion to a Base Rate Loan) and at least three Business
Days in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, the requested Interest Period, and (v) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, that no Potential Event of Default or
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Company may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
60
Notwithstanding the foregoing, Eurodollar Rate Loans may be converted to
Base Rate Loans prior to the expiration of the applicable Interest Periods so
long as such conversion occurs on the Effective Date; provided that accrued
interest through the Effective Date on the Loans so converted shall be paid
within five Business Days following the Effective Date.
E. Post-Maturity Interest. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees arising pursuant to subsection 2.3 owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall, if Requisite Lenders so elect in writing,
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
at maturity under this Agreement with respect to the applicable Loans (or, in
the case of any such fees at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of overdue Eurodollar Rate Loans, upon the expiration
--------
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
--------
day on which it is made, one day's interest shall be paid on that Loan.
2.3 Fees.
----
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the Total Utilization of
Revolving Loan Commitments less outstanding Swingline Loans (other than, with
----
respect to Swingline Lender, the
61
Swingline Lenders Pro Rata Share of the Swingline Loans) multiplied by the
-------------
Applicable Commitment Fee Percentage, such commitment fees to be calculated on
the basis of a 360-day year and the actual number of days elapsed and to be
payable quarterly in arrears on March 15, June 15, September 15 and December 15
of each year, commencing on the first such date to occur after the Closing Date,
and on the Revolving Loan Commitment Termination Date. Any such calculation or
distribution of fees pursuant to this subsection 2.3A shall take into account
the increase in Revolving Loan Commitments and adjustments to Pro Rata Shares
with respect thereto as of the Effective Date.
B. Other Fees. Company agrees to pay to Agents such fees in the amounts and
at the times separately agreed upon between Company and each Agent.
2.4 Scheduled Payments of Term Loans Repayments, Prepayments and Reductions in
---------------------------------------------------------------------------
Revolving Loan Commitments; General Provisions Regarding Payments;
------------------------------------------------------------------
Application of Proceeds of Collateral and Payments Under Guaranties.
-------------------------------------------------------------------
A. Scheduled Payments of Term Loans.
(i) Scheduled Payments of Term Loans. Company shall make principal
---------------------------------
payments on the Term Loans in installments on the dates and in the
percentages of the original principal amount of the Term Loans set forth
below:
======================================================================
SCHEDULED REPAYMENT OF
DATE TERM LOANS
-----------------------------------------------------------------------
September 30, 1999 .25%
-----------------------------------------------------------------------
December 31, 1999 .25%
-----------------------------------------------------------------------
March 31, 2000 .25%
-----------------------------------------------------------------------
June 30, 2000 .25%
-----------------------------------------------------------------------
September 30, 2000 .25%
-----------------------------------------------------------------------
December 31, 2000 .25%
-----------------------------------------------------------------------
March 31, 2001 .25%
-----------------------------------------------------------------------
June 30, 2001 .25%
-----------------------------------------------------------------------
September 30, 2001 .25%
-----------------------------------------------------------------------
December 31, 2001 .25%
-----------------------------------------------------------------------
March 31, 2002 .25%
-----------------------------------------------------------------------
June 30, 2002 .25%
-----------------------------------------------------------------------
September 30, 2002 .25%
-----------------------------------------------------------------------
December 31, 2002 .25%
-----------------------------------------------------------------------
March 31, 2003 .25%
-----------------------------------------------------------------------
June 30, 2003 .25%
-----------------------------------------------------------------------
September 30, 2003 .25%
-----------------------------------------------------------------------
62
========================================================
SCHEDULED REPAYMENT OF
DATE TERM LOANS
-------------------------------------------------------
December 31, 2003 .25%
-------------------------------------------------------
March 31, 2004 .25%
-------------------------------------------------------
June 30, 2004 .25%
-------------------------------------------------------
September 30, 2004 .25%
-------------------------------------------------------
December 31, 2004 .25%
-------------------------------------------------------
March 31, 2005 .25%
-------------------------------------------------------
June 30, 2005 .25%
-------------------------------------------------------
September 30, 2005 .25%
-------------------------------------------------------
December 31, 2005 .25%
-------------------------------------------------------
March 31, 2006 .25%
-------------------------------------------------------
June 30, 2006 .25%
-------------------------------------------------------
July 20, 2006 93.0%
-------------------------------------------------------
; provided, in the event any New Term Loans are made, such New Term Loans shall
--------
be repaid on each of the dates set forth above occurring on or after the
Increased Amount Date relating to such New Term Loans in an amount equal to a
portion of such New Term Loans equal to a ratio of (y) the amount of other Term
Loans being repaid on such date and (z) the total aggregate amount of other Term
Loans outstanding on such Increased Amount Date; provided further that the
-------- -------
scheduled installments of principal of the Term Loans set forth above shall be
reduced in connection with any voluntary or mandatory prepayments of the Term
Loans in accordance with subsection 2.4B(iv); and provided, further that the
-------- -------
Term Loans and all other amounts owed hereunder with respect to the Term Loans
shall be paid in full no later than July 20, 2006, and the final installment
payable by Company in respect of the Term Loans on such date shall be in an
amount, if such amount is different from that specified above, sufficient to
repay all amounts owing by Company under this Agreement with respect to the Term
Loans.
B. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or telephonic notice
---------------------
to Administrative Agent on or prior to 12:00 Noon (New York City time) on the
date of prepayment, which notice, if telephonic, shall be promptly confirmed in
writing, at any time and from time to time prepay any Swing Line Loan on any
Business Day in whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount. Company may, upon
written or telephonic notice on the date of prepayment, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case given to Administrative Agent by 12:00
Noon (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by telefacsimile
or
63
telephone to each Lender), at any time and from time to time prepay any Term
Loans or Revolving Loans on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company may, upon
---------------------------------------------------
not less than three Business Days' prior written or telephonic notice confirmed
in writing to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone to
each Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments at the
time of such proposed termination or reduction after giving effect to any
concurrent repayment of Revolving Loans and Letter of Credit; provided that any
--------
such partial reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in
excess of that amount. Company's notice to Administrative Agent shall designate
the date (which shall be a Business Day) of such termination or reduction and
the amount of any partial reduction, and such termination or reduction of the
Revolving Loan Commitments shall be effective on the date specified in Company's
notice and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments. The Loans shall be prepaid in the amounts
----------------------
and under the circumstances set forth below, all such prepayments to be applied
as set forth below or as more specifically provided in subsection 2.4B(iv).
(a) Prepayments From Net Asset Sale Proceeds. No later than the fifth
-----------------------------------------
Business Day following the date of receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset Sale,
Company shall prepay the Loans in an aggregate amount equal to such Net
Asset Sale Proceeds. Notwithstanding the foregoing, the Net Asset Sale
Proceeds shall not be required to repay Loans as set forth above, to the
extent that and so long as such Net Asset Sale Proceeds are within 365 days
of receipt of such proceeds, reinvested (or a contract entered into with
respect to such reinvestment) in the business of the Company and its
Subsidiaries. If Company is otherwise required to apply any portion of Net
Asset Sale Proceeds to prepay Indebtedness evidenced by the Second Priority
Term Loans or the Senior Notes then, notwithstanding anything contained in
this Agreement to the contrary, Company shall apply such Net Asset Sale
Proceeds to the prepayment of the Loans so as to eliminate or minimize any
obligation to prepay the Second Priority Term Loans or the Senior Notes.
64
(b) Prepayments from Net Insurance/Condemnation Proceeds. No later
-----------------------------------------------------
than the tenth Business Day following the date of receipt by Administrative
Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be applied to prepay
the Loans pursuant to the provisions of subsection 6.4C, Company shall
prepay the Loans in an aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds minus (if (1) no Event of Default shall
-----
have occurred and be continuing and (2) Company shall have delivered to
Administrative Agent, on or before such tenth Business Day, the Officers'
Certificate described in subsection 6.4C), any Proposed Insurance
Reinvestment Proceeds; provided, that at Company's option, such Proposed
--------
Insurance Reinvestment Proceeds may be applied to prepay outstanding
Revolving Loans to the full extent thereof. In addition, no later than 365
days after receipt of any Proposed Insurance Reinvestment Proceeds, Company
shall prepay the Loans in an amount equal to the amount of any such
Proposed Insurance Reinvestment Proceeds that have not theretofore been
applied to the costs of repairing, restoring or replacing the applicable
assets of Company or its Subsidiaries or reinvested in assets used in the
ordinary course of business; provided further that, Company shall not be
----------------
required to make any prepayment of the Loans to the extent that Net
Insurance/Condemnation Proceeds during any Fiscal Year does not exceed 2%
of consolidated total assets of Company.
(c) Prepayments Due to Issuance of Debt. On the date of receipt by
------------------------------------
Holdings, Company or any of their respective Subsidiaries of the Cash
proceeds of any Indebtedness, including debt Securities of Holdings,
Company or any of their respective Subsidiaries (other than the Loans and
any other Indebtedness permitted under subsections 7.1 (such proceeds, net
of underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and
expenses, being the "Net Indebtedness Proceeds")), Company shall prepay the
Loans in an aggregate amount equal to such Net Indebtedness Proceeds;
provided, however, that payment or acceptance of the amounts provided for
-----------------
in this subsection 2.4B(iii)(c) shall not constitute a waiver of any Event
of Default resulting from the incurrence of such Indebtedness or otherwise
prejudice any rights or remedies of Agents or Lenders. If Company is
otherwise required to apply any portion of Net Indebtedness Proceeds to
prepay Indebtedness evidenced by the Second Priority Term Loans or the
Senior Notes then, notwithstanding anything contained in this Agreement to
the contrary, Company shall apply such Net Indebtedness Proceeds to the
prepayment of the Loans so as to eliminate or minimize any obligation to
prepay the Second Priority Term Loans or the Senior Notes.
(d) Prepayments Due to Issuance of Equity Securities. On the date of
-------------------------------------------------
receipt by Holdings or Company of Cash proceeds (any such proceeds, net of
underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and
expenses, being "Net Equity Proceeds") from the issuance of any equity
Securities of Holdings or Company after the Effective Date (other
65
than (A) capital contributions by Holdings to Company or any other
Subsidiary, (B) issuances of Securities to the General Partner or Holdings
or to any wholly owned Subsidiary of the Company by the Company, or (C)
issuances of Holdings Common Units, Preferred Units, Series B Preferred
Units or Qualified Preferred Units (x) to employees, officers, directors
and consultants of Holdings and its Subsidiaries in the ordinary course of
business in connection with their employment by Holdings, Company or its
Subsidiaries and (y) to ▇▇▇▇ Investors, the Other Investors, the Existing
Investors and their Related Parties to the extent the Cash proceeds thereof
are not in excess of $25,000,000 and (z) in connection with payment of all
or any portion of the purchase price of a business or assets in a 1999
Acquisition or a Permitted Acquisition), Company shall prepay the Loans in
an aggregate amount equal to: (i) 50% (or, if the Leverage Ratio is not
more than 3.5 to 1.0 on the date such Net Equity Proceeds are received, no
such payment shall be made) of such Net Equity Proceeds if such Net Equity
Proceeds are derived from a non-public sale of equity Securities or
partnership interests of Holdings or Company or (ii) 75% (or, if the
Leverage Ratio is not more than 3.5 to 1.0 on the date such Net Equity
Proceeds are received, no such payment shall be made) of such Net Equity
Proceeds if such Net Equity Proceeds are derived from the sale of equity
Securities or partnership interests of Holdings or Company through a public
offering. If Company is otherwise required to apply any portion of Net
Equity Proceeds to prepay Indebtedness evidenced by the Second Priority
Term Loans or the Senior Notes then, notwithstanding anything contained in
this Agreement to the contrary, Company shall apply such Net Equity
Proceeds to the prepayment of the Revolving Loans so as to eliminate or
minimize any obligation to prepay the Second Priority Term Loans or the
Senior Notes.
(e) Calculations of Net Proceeds Amounts; Additional Prepayments and
----------------------------------------------------------------
Reductions Based on Subsequent Calculations. Concurrently with any
--------------------------------------------
prepayment of the Loans pursuant to subsections 2.4B(iii)(a)-(d), Company
shall deliver to Administrative Agent an Officers' Certificate
demonstrating the calculation of the amount (the "Net Proceeds Amount") of
the applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds, Net Indebtedness Proceeds or Net Equity Proceeds (as such terms
are defined in subsections 2.4B(iii)(a), (b), (c) and (d), respectively),
as the case may be, that gave rise to such prepayment. In the event that
Company shall subsequently determine that the actual Net Proceeds Amount
was greater than the amount set forth in such Officers' Certificate,
Company shall promptly make an additional prepayment of the Loans in an
amount equal to the amount of such excess, and Company shall concurrently
therewith deliver to Administrative Agent an Officers' Certificate
demonstrating the derivation of the additional Net Proceeds Amount
resulting in such excess.
(f) Prepayments Relating to the Borrowing Base. Company shall from
-------------------------------------------
time to time prior to the Revolving Loan Commitment Termination Date,
prepay Loans (and after all Loans have been repaid, deposit in a collateral
account same day funds in an
66
amount equal to the Letter of Credit Usage until such time as the Letters
of Credit shall have been terminated and the Letter of Credit Usage has
been reduced to zero or until no payment is otherwise required under this
clause (f)) in such amounts as shall be necessary so that at all times the
Total Utilization of Commitments shall not exceed the Adjusted Borrowing
Base Amount then in effect.
(g) Prepayments Due to Restrictions of Revolving Loan Commitments.
--------------------------------------------------------------
Company shall from time to time prepay first the Swing Line Loans and
-----
second the Revolving Loans to the extent necessary so that the Total
------
Utilization of Revolving Loan Commitments shall not at any time exceed the
Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and Order of
------------------------------------------------------------------
Maturity. Any voluntary prepayments pursuant to subsection 2.4B(i) shall
---------
be applied as specified by Company in the applicable notice of prepayment;
provided that in the event Company fails to specify the Loans to which any
--------
such prepayment shall be applied, such prepayment shall be applied first to
-----
repay outstanding Swing Line Loans to the full extent thereof, and second
------
to repay outstanding Revolving Loans to the full extent thereof, and third
-----
to repay outstanding Term Loans to the full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
------------------------------------------------------
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans pursuant to subsections 2.4B(iii)(a)-(d),(e) and
(f) shall be applied first to prepay the Swing Line Loans to the full
-----
extent thereof, second to prepay the Revolving Loans to the full extent
------
thereof and third to the extent of any remaining portion of the Applied
-----
Amount, to prepay the Term Loans to the full extent thereof.
(c) Application of Prepayments to Base Rate Loans and Eurodollar Rate
-----------------------------------------------------------------
Loans. Any prepayment shall be applied first to Base Rate Loans to the
------
full extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments required to be
made by Company pursuant to subsection 2.6D.
(d) Application of Mandatory Prepayments of Term Loans to the
---------------------------------------------------------
Scheduled Installments of Principal Thereof. Any mandatory prepayments of
--------------------------------------------
the Term Loans pursuant to subsection 2.4B(iii) shall be applied to reduce
the scheduled installments of principal of the Term Loans set forth in
subsection 2.4A(i) on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) to each scheduled installment of
principal of the Term Loans set forth in subsection 2.4A(i) that is unpaid
at the time of such prepayment.
67
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of principal,
---------------------------
interest, fees and other Obligations hereunder and under the Notes shall be made
in Dollars in same day funds, without defense, setoff or counterclaim, free of
any restriction or condition, and delivered to Administrative Agent not later
than 1:00 P.M. (New York City time) on the date due at the Funding and Payment
Office for the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by Company on the
next succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(ii) Application of Payments to Principal and Interest. Except as provided
--------------------------------------------------
in subsection 2.2C, all payments in respect of the principal amount of any Loan
shall include payment of accrued interest on the principal amount being repaid
or prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
--------------------------
payments in respect of Term Loans and Revolving Loans shall be apportioned among
all outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares giving effect to any
adjustments in Pro Rata Shares on and after the Effective Date. Administrative
Agent shall promptly distribute to each Lender, at its primary address set forth
below its name on the appropriate signature page hereof or at such other address
as such Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3. Notwithstanding the foregoing
provisions of this subsection 2.4C(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Subject to the provisions of subsection
--------------------------
2.2B, whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment fees
hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of any
--------------------
Note held by it, or any part thereof (other than by granting participations
therein), that Lender will make a notation thereon of all Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest
68
thereon has been paid; provided that the failure to make (or any error in the
--------
making of) a notation of any Loan made under such Note shall not limit or
otherwise affect the obligations of Company hereunder or under such Note with
respect to any Loan or any payments of principal or interest on such Note.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
--------------------------------------
subsections 2.4B(iii)(a) and 2.4B(iii)(b) with respect to prepayments from Net
Asset Sale Proceeds and Net Insurance/Condemnation Proceeds, all proceeds
received by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any Collateral
Document during the continuation of an Event of Default may, in the discretion
of Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as defined in
such Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale, collection
or other realization, including all expenses, liabilities and advances made
or incurred by Administrative Agent and its agents and counsel in
connection therewith, and all amounts for which Administrative Agent is
entitled to indemnification under such Collateral Document and all advances
made by Administrative Agent thereunder for the account of the applicable
Loan Party, and to the payment of all costs and expenses paid or incurred
by Administrative Agent in connection with the exercise of any right or
remedy under such Collateral Document, all in accordance with the terms of
this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations then due and owing for the
benefit of the holders thereof in accordance with the terms of
Intercreditor Agreement; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received by
-----------------------------------------
Administrative Agent under the Guaranties shall be applied promptly from time to
time by Administrative Agent in the following order of priority:
(a) To the payment of the costs and expenses of any collection or
other realization under such Guaranties, including all expenses,
liabilities and advances made or
69
incurred by Administrative Agent and its agents and counsel in connection
therewith, all in accordance with the terms of this Agreement and Guaranty;
(b) thereafter, to the extent of any excess of such payments, to the
payment of all other Guarantied Obligations (as defined in such Guaranty)
for the benefit of the holders thereof in accordance with the terms of the
Intercreditor Agreement; and
(c) thereafter, to the extent of any excess such payments, to the
payment to Holdings or the applicable Subsidiary Guarantor or to whosoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
2.5 Use of Proceeds.
----------------
A. The proceeds of Existing Revolving Loans were used for the purposes
specified in the Existing Credit Agreement.
B. Term Loans. The proceeds of the Term Loans made on the Effective Date
shall be applied by the Company in full to (x) repay a portion of the Existing
Revolving Loans outstanding immediately prior to the Effective Date, (y) to pay
the purchase price for stock and assets purchased in connection with the 1999
Acquisitions and/or (z) to pay fees and expenses in connection with the 1999
Acquisitions and the amendment and restatement of the Existing Credit Agreement.
C. Post Effective Date Revolving Loans and Swing Line Loans. Revolving
Loans and Swing Line Loans made on or after the Effective Date may be used by
Company for working capital and general corporate purposes, which may include
the making of intercompany loans to any of Company's wholly-owned Subsidiaries,
in accordance with subsection 7.1, for their own working capital and general
corporate purposes (including Consolidated Capital Expenditures) and financing
Permitted Acquisitions.
D. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Holdings or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
---------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
70
A. Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "Affected Lender" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above
71
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Notice of Borrowing or a Notice of Conversion/Continuation, Company shall have
the option, subject to the provisions of subsection 2.6D, to rescind such Notice
of Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, promptly upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation
or a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4B(i)) or other principal
payment or any conversion of any of its Eurodollar Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan, (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company, or (iv) as a consequence
of any other default by Company in the repayment of its Eurodollar Rate Loans
when required by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Subject to its obligations under
subsection 2.8, any Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of any of its branch offices or the office of an
Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
-----------------
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
72
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of an Event of Default, (i) Company may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation of, or into, Eurodollar Rate Loans that has
not yet occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
-----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such
73
increased cost or reduction in amounts received or receivable hereunder. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
------------------------------
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld or assessed by
or within the United States of America or any political subdivision in or
of the United States of America or any other jurisdiction from or to which
a payment is made by or on behalf of Company or by any federation or
organization of which the United States of America or any such jurisdiction
is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
------------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by Company to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is required
by law to make any deduction or withholding, and within 30 days after
the due date of payment of any Tax which it is required by clause (b)
above to pay, Company shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
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provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after the
Closing Date (in the case of each Existing Lender), after the Effective Date (in
the case of each New Lender) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each other Lender)
in any such requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction, withholding
or payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any jurisdiction
other than the United States or any state or other political subdivision
thereof (for purposes of this subsection 2.7B(iii), a "Non-US Lender")
shall deliver to Administrative Agent for transmission to Company, on or
prior to the Effective Date, on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the determination
of Company or Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form 1001
or 4224 (or any successor forms), properly completed and duly executed by
such Lender, together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations issued
thereunder to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form 1001
or 4224 pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form W-8 (or
any successor form), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption required
under the Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments to such
Lender of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters pursuant to subsection 2.7B(iii)(a) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates
or other evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or inaccurate
in any material respect, that such Lender shall promptly (1) deliver to
Administrative Agent for transmission to Company two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate re Non-Bank
Status and two original copies of Internal Revenue
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Service Form W-8, as the case may be, properly completed and duly executed
by such Lender, together with any other certificate or statement of
exemption required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan Documents or (2)
notify Administrative Agent and Company of its inability to deliver any
such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount to any
Non-US Lender under clause (c) of subsection 2.7B(ii) if such Lender shall
have failed to satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have satisfied the
--------
requirements of subsection 2.7B(iii)(a) on or before the Effective Date or
on the date of the Assignment Agreement pursuant to which it became a
Lender (in the case of each other Lender), nothing in this subsection
2.7B(iii)(c) shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the event that, as
a result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
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2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
--------
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses
payable by Company pursuant to this subsection 2.8 (setting forth in reasonable
detail the basis for requesting such amount) submitted by such Lender or Issuing
Lender to Company (with a copy to Administrative Agent) shall be conclusive
absent manifest error.
2.9 Defaulting Lenders.
------------------
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "Defaulting Lender") defaults (a "Funding Default") in its
obligation to fund any Revolving Loan (a "Defaulted Revolving Loan") in
accordance with subsection 2.1, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Loan Documents,
(ii) to the extent permitted by applicable law, until such time as the Default
Excess (as defined below) with respect to such Defaulting Lender shall have been
reduced to zero, (a) any voluntary prepayment of the Revolving Loans pursuant to
subsection 2.4B(i) shall, if Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving Loan
Exposure of such Defaulting Lender were zero, and (b) any mandatory prepayment
of the Revolving Loans pursuant to subsection 2.4B(iii) shall, if Company so
directs at the time of making such mandatory prepayment, be applied to the
Revolving Loans of other Lenders (but not to the Revolving Loans of such
77
Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Revolving Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b), (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding Revolving Loans
and such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage shall
be excluded for purposes of calculating the commitment fee payable to Lenders
pursuant to subsection 2.3A in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any commitment fee pursuant to subsection 2.3A with respect
to such Defaulting Lender's Revolving Loan Commitment in respect of any Default
Period with respect to such Defaulting Lender, and (iv) the Total Utilization of
Revolving Loan Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Revolving Loans of such
Defaulting Lender.
For purposes of this Agreement, (I) "Default Period" means, with respect to
any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"Default Excess" means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this subsection 2.9, performance by
Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.9. The rights and remedies against a
Defaulting Lender under this subsection 2.9 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
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2.10 Removal or Replacement of a Lender.
----------------------------------
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "Increased-Cost Lender") shall give notice to
Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7 or subsection 3.6, (b)
the circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in effect,
and (c) such Lender shall fail to withdraw such notice within five Business
Days after Company's request for such withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the Default
Period for such Defaulting Lender shall remain in effect, and (c) such
Defaulting Lender shall fail to cure the default as a result of which it
has become a Defaulting Lender within five Business Days after Company's
request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
provision to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second provision to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "Terminated Lender") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if any, of
such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding Loans
made by such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender hereunder
pursuant to subsection 2.3, subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
--------
any Loans outstanding at the time of such termination, the written consent
of Administrative Agent and Requisite Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for Company to
make the election set forth in this clause (i); or
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(ii) elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "Replacement Lender") in accordance with the provisions
of subsection 10.1B; provided that (a) on the date of such assignment,
--------
Company shall pay any amounts payable to such Terminated Lender pursuant to
subsection 2.3, subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that (X) Company may not make either of the elections set forth in
--------
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
------------
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
--------
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
---------------------------------------------------------------------
Therein.
--------
A. Letters of Credit. Company acknowledges and confirms that Schedule 3.1
------------
annexed hereto sets forth each letter of credit issued under the Existing Credit
Agreement and outstanding as of the Effective Date (collectively, the "Existing
Letters of Credit"). Company hereby represents, warrants, agrees, covenants and
(a) reaffirms that it is not aware of any defense, set off, claim or
counterclaim against any Agent or Lender in regard to its Obligations in respect
of such Existing Letters of Credit and (b) reaffirms its obligation to reimburse
the applicable Issuing Lenders for honored drawings under such Existing Letters
of Credit in accordance with the terms and conditions of this Agreement and the
other Loan Documents applicable to Letters of Credit issued hereunder. Based on
the foregoing, Company and each Lender agrees that (1) each Existing Letter of
Credit which is a Standby Letter of Credit shall, as of the Effective Date,
80
be deemed for all purposes of this Agreement to be a Standby Letter of Credit
issued hereunder, and (2) each Existing Letter of Credit which is a Commercial
Letter of Credit shall, as of the Effective Date, be deemed for all purposes of
this Agreement to be a Commercial Letter of Credit issued hereunder. In
addition to Company requesting that Lenders make Revolving Loans pursuant to
subsection 2.1A(iii) and that Swing Line Lender make Swing Line Loans pursuant
to subsection 2.1A(iv), Company may request, in accordance with the provisions
of this subsection 3.1, from time to time during the period from the Effective
Date to but excluding the Revolving Loan Commitment Termination Date, that one
or more Lenders issue Letters of Credit for the account of Company for the
purposes specified in the definitions of Commercial Letters of Credit and
Standby Letters of Credit; provided that all such Commercial Letters of Credit
--------
shall provide for sight drawings. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, any one or more Lenders may, but (except as provided in
subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in
accordance with the provisions of this subsection 3.1; provided that Company
--------
shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance, the
Total Utilization of Revolving Loan Commitments would exceed the Revolving
Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $40,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
--------
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
-----------------
Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension; provided, however, that notwithstanding clause (a)
-----------------
but subject to the other restrictions of this subsection, Company may
request the issuance (on a date prior to five Business Days prior to the
Revolving Loan Commitment Termination Date) of a Standby Letter of Credit
having an expiration date later than five Business Days prior to the
Revolving Loan Commitment Termination Date if Company, at the time of such
request, makes arrangements in form and substance satisfactory to the
Issuing Lender thereof to cash collateralize such Letter of Credit provided
--------
that Issuing Lender shall be under no obligation to issue such a Letter of
Credit if it shall reasonably determine that such cash collateralization
arrangements could reasonably be expected to be less favorable to Issuing
Lender than the reimbursement arrangements hereunder with respect to other
Letters of Credit;
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(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is 30 days prior to the Revolving
Loan Commitment Termination Date and (Y) the date which is 180 days from the
date of issuance (on a date prior to 30 days prior to the Revolving Loan
Commitment Termination Date) of such Commercial Letter of Credit or (b) that is
otherwise unacceptable to the applicable Issuing Lender in its reasonable
discretion; provided, that, notwithstanding clause (X) but subject to the other
--------
restrictions of this subsection, Company may request the issuance (on a date
prior to 30 days prior to the Revolving Loan Commitment Termination Date) of a
Commercial Letter of Credit having an expiration date later than the time set
forth in clause (X) if Company, at the time of such request, makes arrangements
in form and substance satisfactory to the Issuing Lender thereof to cash
collateralize such Letter of Credit; provided further that, Issuing Lender shall
-------- -------
be under no obligation to issue such a Letter of Credit if it shall reasonably
determine that such cash collateralization arrangements could reasonably be
expected to be less favorable to Issuing Lender than the reimbursement
arrangements hereunder with respect to other Letters of Credit; or
(v) any Letter of Credit if, after giving effect to the issuance
thereof, the Total Utilization of Commitments exceeds the Adjusted
Borrowing Base Amount then in effect.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 11:00 A.M. (New York City time) at least three
Business Days (in the case of Standby Letters of Credit) or five Business
Days (in the case of Commercial Letters of Credit), or in each case such
shorter period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a Letter of
Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (g) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender, in
--------
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; and provided, further that no
-------- -------
Letter of Credit shall require payment against a conforming draft to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such draft
is required to be presented is located) that such draft is
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presented if such presentation is made after 10:00 A.M. (in the time zone
of such office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
-------------------------------
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and Administrative Agent shall be
the Issuing Lender with respect thereto. In the event that Administrative
Agent, in its sole discretion, elects not to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, whereupon Company
may request any other Lender to issue such Letter of Credit by delivering
to such Lender a copy of the applicable Notice of Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit shall
promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and any
such Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other Lenders
shall have declined to issue such Letter of Credit, notwithstanding the
prior election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit and
shall be the Issuing Lender with respect thereto, notwithstanding the fact
that the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent's outstanding Revolving Loans and
Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect; provided that Administrative Agent shall not be
--------
obligated to issue any Letter of Credit denominated in a foreign currency
which in the judgment of Administrative Agent is not readily and freely
available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
----------------------------
accordance with subsection 10.6) of the conditions set forth in subsection
4.4, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice),
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Administrative Agent shall notify each Lender of the amount of such
Lender's respective participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each calendar
------------------
quarter ending after the Effective Date, so long as any Letter of Credit
shall have been outstanding during such calendar quarter, each Issuing
Lender shall deliver to each other Lender a report setting forth for such
calendar quarter the daily aggregate amount available to be drawn under the
Letters of Credit issued by such Issuing Lender that were outstanding
during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender's Pro Rata Share
(with respect to the Revolving Loan Commitments) of the maximum amount which is
or at any time may become available to be drawn thereunder. On the Revolving
Loan Commitment Termination Date, the Issuing Lender shall be deemed to, and
hereby agrees to, irrevocably repurchase from each Lender such Lender's
participation in the Letters of Credit issued by such Issuing Lender pursuant to
the last proviso to subsection 3.1A(iii) or the last proviso to subsection
3.1A(iv) to the extent any such Letter of Credit remains outstanding and any
amounts remain undrawn thereunder.
3.2 Letter of Credit Fees.
---------------------
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting fee,
payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to the product of (x) the Applicable Eurodollar Rate Margin
and (y) the daily amount available to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each March 15, June 15, September 15 and
December 15 of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Commercial Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Lenders having Revolving
Loan Exposure, equal to the product of (x) the Applicable Eurodollar Rate
Margin and (y) the daily amount available to be drawn under such Commercial
Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) each March 15, June 15,
84
September 15 and December 15 of each year and computed on the basis of a
360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) or (ii)(b) of this subsection 3.2, Administrative Agent shall distribute
to each Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
--------
notwithstanding, (i) unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 11:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in
the case of a drawing under a Letter of Credit which is denominated in a
currency other than Dollars, shall be calculated by reference to the applicable
Exchange Rate) equal to the
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amount of such honored drawing and (ii) subject to satisfaction or waiver of the
conditions specified in subsection 4.3B, Lenders shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the amount of such
honored drawing; and provided, further that, if for any reason proceeds of
-------- -------
Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share of the Revolving Loan
Commitments. Each Lender shall make available to such Issuing Lender an
amount equal to its respective participation, in Dollars and in same day
funds, at the office of such Issuing Lender specified in such notice, not
later than 12:00 Noon (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. In the event that
any Lender fails to make available to such Issuing Lender on such business
day the amount of such Lender's participation in such Letter of Credit as
provided in this subsection 3.3C, such Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the rate customarily used by such Issuing Lender for the
correction of errors among banks for three Business Days and thereafter at
the Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this subsection
3.3C in the event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of Credit
by such Issuing Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of such
Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
---------------------------------------------------------------
In the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit
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issued by it, such Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of all
payments subsequently received by such Issuing Lender from Company in
reimbursement of such honored drawing when such payments are received. Any
such distribution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the Base Rate
plus the Applicable Base Rate Margin for Revolving Loans and (b)
thereafter, if Requisite Lenders so elect in writing pursuant to the
provision of subsection 2.2E of this Agreement, a rate which is 2% per
annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be computed on
the basis of a 365-day or 366-day year, as the case may be, for the actual
number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which such Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such other Lender would have
been entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such Letter
of Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such honored drawing, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under subsection
3.3C(i) with respect to such honored drawing such other Lender's Pro Rata
Share of any interest received by such Issuing Lender in respect of that
portion of such honored drawing so reimbursed by other Lenders for the
period from the date on which such Issuing Lender was so reimbursed by
other Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Company. Any such distribution shall be
made to a Lender at its primary
87
address set forth below its name on the appropriate signature page hereof
or at such other address as such Lender may request.
3.4 Obligations Absolute.
--------------------
The obligation of Company to reimburse each Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Holdings or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document 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;
(iv) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries;
(v) any breach of this Agreement or any other Loan Document by any
party thereto;
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
--------
applicable Letter of Credit shall not have constituted bad faith, gross
negligence or willful misconduct of such Issuing Lender under the circumstances
in question (as determined by a final judgment of a court of competent
jurisdiction).
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3.5 Indemnification; Nature of Issuing Lenders' Duties.
---------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the bad faith, gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority (all such acts or omissions herein
called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any 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) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any 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) so long as such Issuing Lender
complies with its responsibilities under subsection 3.3A, failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) 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) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
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Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising out of the bad faith, gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby), in the event that any Issuing
Lender or Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable lending
or letter of credit office) to any additional Tax (other than any Tax on
the overall net income of such Issuing Lender or Lender) with respect to
the issuing or maintaining of any Letters of Credit or the purchasing or
maintaining of any participations therein or any other obligations under
this Section 3, whether directly or by such being imposed on or suffered by
any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender for which such Issuing Lender is not
otherwise compensated hereunder; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis
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for calculating the additional amounts owed to such Issuing Lender or Lender
under this subsection 3.6, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Existing Revolving Loans and Letters of Credit.
------------------------------------------------------------
The conditions to the making of the Existing Revolving Loans and the
issuance of the Existing Letters of Credit have been satisfied.
4.2 Conditions to Effectiveness of this Agreement and Term Loans.
------------------------------------------------------------
The effectiveness of this Agreement and the obligations of Lenders to make
the Term Loans are, in addition to the conditions precedent specified in
subsection 4.3, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Effective Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Effective Date:
(i) Certified copies of the Agreement of Limited Partnership or
Certificate or Articles of Incorporation of such Person, together with a
good standing certificate from the Secretary of State of its jurisdiction
of formation or incorporation and each other state in which such Person is
qualified as a foreign Person to do business (except, with respect to Loan
Parties, other than Company, any such other state or states in which
failure to be qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (provided that no
--------
such state shall be a state in which real property of the applicable Loan
Party is located)) and, to the extent generally available, a certificate or
other evidence of good standing or existence as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each dated a recent date prior to the
Effective Date;
(ii) Copies of the Bylaws of each such Person that is a corporation,
certified as of the Effective Date by such Person's corporate secretary or
an assistant secretary;
91
(iii) Resolutions of the Board of Directors, general partner or other
authorizing body of such Person approving and authorizing the execution,
delivery and performance of the Loan Documents to which it is a party to be
executed on the Effective Date, certified as of the Effective Date by the
secretary or an assistant secretary or general partner of such Person as
being in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing, as of the Effective Date, any Loan Documents to which it
is a party;
(v) Executed originals of the Loan Documents not previously executed
to which such Person is a party; and
(vi) Such other documents as any Agent may reasonably request.
B. No Material Adverse Effect. Since December 31, 1998, no Material
Adverse Effect (in the opinion of any Agent) shall have occurred.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The organizational structure of Holdings and
-------------------
its Subsidiaries (after giving effect to the 1999 Acquisitions) shall be as
set forth on Schedule 4.2C annexed hereto.
-------------
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Holdings and its Subsidiaries (after giving effect to the 1999
Acquisitions) shall be reasonably satisfactory to the Agents in all
respects and as set forth on Schedule 4.2C annexed hereto.
-------------
D. Amendment to Second Priority Term Loan Credit Documents. Agents shall
each have received a fully executed or conformed copy of any amendments to the
Second Priority Term Loan Credit Documents to be made effective as of the
Effective Date, each of which shall be in form and substance reasonably
satisfactory to Agents, and each such agreement and promissory note shall be in
full force and effect.
E. Necessary Governmental Authorizations and Consents. Holdings and
Company shall have obtained all Governmental Authorizations and all consents of
other Persons, in each case that are necessary in connection with the
transactions contemplated by the Loan Documents and the continued operation of
the business conducted by Holdings and its Subsidiaries, and each of the
foregoing shall be in full force and effect, in each case other than those the
failure to obtain or maintain which, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
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F. Effective Date Mortgages; Effective Date Mortgage Policies; Etc.
Agents shall have received from Holdings, Company and each applicable Subsidiary
Guarantor:
(i) Effective Date Mortgages. Fully executed and notarized Mortgages
-----------------------
(each an "Effective Date Mortgage" and, collectively, the "Effective Date
Mortgages"), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 4.2F annexed hereto (each a "Effective Date Mortgaged Property"
-------------
and, collectively, the "Effective Date Mortgaged Properties");
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
-------------------------
shall be reasonably satisfactory to Agents) in each state in which an
Effective Date Mortgaged Property is located with respect to the
enforceability of the form(s) of Effective Date Mortgages to be recorded in
such state and such other matters as any Agent may reasonably request, in
each case in form and substance reasonably satisfactory to Agents;
provided, however, that Agents may determine in their reasonable discretion
-------- -------
that an opinion of counsel in any one or more of such states shall not be
required hereunder;
(iii) Miscellaneous. Administrative Agent shall have received ALTA
-------------
mortgagee title insurance policies or unconditional commitments therefor
and such other documents or materials as Administrative Agent shall have
reasonably requested in each case in form and substance reasonably
acceptable to Administrative Agent.
G. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to Loan Documents and filings made prior to the
Effective Date pursuant to the Existing Credit Agreement, Agents shall have
received evidence satisfactory to it that each Loan Party shall have taken or
caused to be taken all such actions, executed and delivered or caused to be
executed and delivered all such agreements, documents and instruments, and made
or caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (iii), (iv) and (v) below) that may be
necessary or, in the reasonable opinion of Agents, desirable in order to create
in favor of Collateral Agent, for the benefit of Lenders, a valid and (upon such
filing and recording) perfected First Priority security interest in the
Collateral (including, without limitation, Collateral acquired pursuant to the
1999 Acquisitions). Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates, Instruments and Certificates of Title.
---------------------------------------------------------
Delivery to Collateral Agent of (a) certificates (which certificates shall
be accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Collateral Agent)
representing all capital stock or other equity interests pledged pursuant
to the Pledge and Security Agreement, (b) all promissory notes or other
instruments (duly endorsed, where
93
appropriate, in a manner satisfactory to Collateral Agent) evidencing any
Collateral and (c) except as otherwise set forth in the Pledge and Security
Agreement, certificates of title, indicating thereon the Lien created under
the Pledge and Security Agreement with respect to any item of equipment
covered by a certificate of title issued under a statute of any state
requiring such indication of such security interest as a condition of
perfection thereof;
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Collateral Agent of (a) the results of a recent search, by a Person
reasonably satisfactory to Agents, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
--------------------------------------------
Collateral Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Agents, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. Delivery to Collateral Agent of all cover
---------------------
sheets or other documents or instruments required to be recorded with the
PTO in order to create or perfect Liens in respect of any U.S. patents,
federally registered trademarks or copyrights, or applications for any of
the foregoing, included among the IP Collateral; and
(vi) Opinions of Local Counsel. To the extent requested by Agents,
-------------------------
delivery to Agents of an opinion of counsel under the laws of each
jurisdiction in which any Loan Party or any personal or mixed property
Collateral is located with respect to the creation and perfection of the
security interests in favor of Collateral Agent in such Collateral and such
other matters governed by the laws of such jurisdiction regarding such
security interests as Agents may reasonably request, in each case in form
and substance reasonably satisfactory to Agents.
H. Repayment of Swing Line Loans. On the Effective Date, immediately
before and after giving effect to any borrowings hereunder on such date, no
Swing Line Loans shall be outstanding.
I. No Event of Default. Company shall have delivered to Administrative
Agent an Officer's Certificate, in form and substance satisfactory to
Administrative Agent, to the effect that immediately prior
94
to the Effective Date, no event has occurred and is continuing that would
constitute an Event of Default or Potential Event of Default under the Existing
Credit Agreement.
J. Pro Forma Balance Sheet. On or before the Effective Date, Agents shall
have received from Company pro forma consolidated balance sheets of Company and
its Subsidiaries as at March 31, 1999 reflecting the consummation of the
transactions contemplated by the Loan Documents and the 1999 Acquisitions as if
such transactions had occurred on such date, which pro forma financial
statements shall be in form and substance reasonably satisfactory to Agents.
K. Financial Projections. Lenders shall have received financial
projections reasonably satisfactory in form and substance to Agents for Company
and its Subsidiaries for the period from the Effective Date through December 31,
2006.
L. Solvency Assurances. On the Effective Date, Agents shall have received
a Financial Condition Certificate dated the Effective Date, substantially in the
form of Exhibit XI annexed hereto (with such changes thereto as shall be
----------
approved by Agents in the exercise of their reasonable discretion) and with
appropriate attachments, in each case demonstrating that, after giving effect to
the consummation of the transactions contemplated by the Loan Documents,
Holdings and its Subsidiaries will be Solvent.
M. Evidence of Insurance. Agents shall have received a certificate from
Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to subsection 6.4 with respect to
the 1999 Acquisitions is in full force and effect and that Collateral Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
N. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for Loan Parties, and of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, special Pennsylvania
counsel for Loan Parties, in form and substance reasonably satisfactory to
Agents and their counsel, dated as of the Effective Date and setting forth
substantially the matters in the opinions designated in Exhibit VII annexed
-----------
hereto and as to such other matters as or Agents and acting on behalf of Lenders
may reasonably request and (ii) evidence satisfactory to Agents that Loan
Parties have requested such counsel to deliver such opinions to Lenders.
O. Opinions of Agent's Counsel. Lenders shall have received originally
executed copies of one or more favorable written opinions of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to Agents, dated as of the Effective Date,
substantially in the form of Exhibit VIII annexed hereto and as to such other
------------
matters as Agents may reasonably request.
95
P. Fees and Expenses. Company shall have paid to Agents, for distribution
(as appropriate) to Agents, the fees payable on the Effective Date referred to
in subsection 2.3B. and all reasonable expenses for which invoices have been
presented on or before the Effective Date.
Q. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Agents an Officers' Certificate, in form and substance
reasonably satisfactory to Agents, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all material
respects on and as of the Effective Date to the same extent as though made on
and as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Holdings and Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by them on or before the Effective Date
except as otherwise disclosed to and agreed to in writing by Agents and
Requisite Lenders.
R. Borrowing Base Certificate; Appraisals. Company shall have delivered
(a) a Borrowing Base Certificate dated as of the Effective Date demonstrating an
Adjusted Borrowing Base Amount as of such date of not less than $465,000,000 and
(b) appraisals from independent third-party appraiser in form and substance
reasonably satisfactory to Agents confirming the valuations of assets which are
the subject of the 1999 Acquisitions to be included in the calculation of the
Adjusted Borrowing Base Amount; provided, however, that for the purposes of this
-------- -------
Section 4.2 R, so long as the Administrative Agent is reasonably satisfied that
any certificates of title that are the subject of the 1999 Acquisitions will be
furnished and delivered to the relevant state office for the transfer of title
and release and endorsement of liens thereon within five (5) Business Days of
the Effective Date, then such certificates of title shall be included within the
Adjusted Borrowing Base Amount (without giving effect to any adjustment under
the applicable definition otherwise resulting from a failure to obtain final
action by the appropriate filing office).
S. Environmental Reports. Agents shall have received an environmental
assessment report in form and substance reasonably satisfactory to Agents
addressing each of the Facilities listed in Schedule 4.2S annexed hereto
-------------
prepared by ENVIRON Corporation (or another firm reasonably satisfactory to
Agents).
T. Reallocation of Pro Rata Shares. On the Effective Date, each Lender
that will have a greater Pro Rata Share of the Revolving Loan Commitments on the
Effective Date than its Pro Rata Share of the Revolving Loan Commitments on
(under and as defined in the Existing Credit Agreement) immediately prior to the
Effective Date (including any Lender not party to the Existing Credit Agreement
immediately prior to the Effective Date) (each a "Purchasing Lender"), without
executing an Assignment Agreement, shall be deemed to have automatically
purchased assignments pro rata from each Lender that will have a smaller Pro
Rata Share upon the Effective Date (a "Selling Lender") in all such Selling
Lenders' rights and obligations under this Agreement and the other Loan
Documents, with respect to Revolving Loan Commitments and Existing Revolving
Loans (collectively, except as set forth below, the "Assigned Rights
96
and Obligations") so that, after giving effect to such assignments, each Lender
shall have its respective Pro Rata Share as set forth in Schedule 2.1 of the
------------
Assigned Rights and Obligations. Each such purchase hereunder shall be at par
for a purchase price equal to the principal amount of Loans and without
recourse, representation or warranty, except that, each Selling Lender shall be
deemed to represent and warrant to each Purchasing Lender that the Assigned
Rights and Obligations of such Selling Lender are not subject to any Liens
created by that Selling Lender.
Administrative Agent shall calculate the net amount to be paid or received
by each Lender in connection with the assignments effected hereunder on the
Effective Date. Each Purchasing Lender required to make a payment shall make
the net amount of its required payment available to Administrative Agent, in
same day funds, at the Funding and Payment Office not later than 12:00 p.m. (New
York time) on the Effective Date. Administrative Agent shall distribute on the
Effective Date the proceeds of such amounts to the Selling Lenders entitled to
receive payments, pro rata in proportion to the amount each Selling Lender is
entitled to receive at the primary address set forth below such Selling Lender's
name on the signature pages hereof or at such other address as such Selling
Lender may request in writing to Administrative Agent.
U. 1999 Acquisitions. The acquisitions pursuant to the ▇▇▇▇ Acquisition
Agreement and the Husky Acquisition Agreement shall have closed and all
conditions pursuant to the Carlisle Acquisition Agreement shall have been
satisfied or the fulfillment of any such conditions shall have been waived with
the consent of Agents (such consent not to be unreasonably withheld) and the
Carlisle Acquisition shall have become effective in accordance with the terms
thereof and the aggregate cash consideration paid to the sellers in connection
therewith shall not exceed $167,000,000.
V. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agents and their
counsel shall be reasonably satisfactory in form and substance to Agents and
such counsel, and Agents and such counsel shall have received all such
counterpart originals or certified copies of such documents as Agents may
reasonably request.
Each Lender, by delivering its signature page to this Agreement and funding
its Loan on the Effective Date, shall be deemed to have acknowledged receipt of,
and consented to and approved, each Loan Document and each other document
required to be approved by Agents, Requisite Lenders or Lenders, as applicable,
on or prior to the Effective Date.
4.3 Conditions to All Loans.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
97
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, chief operating officer, president, the principal financial officer,
the principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) After making the Loans requested on such Funding Date, the
Total Utilization of Commitments shall not exceed the Adjusted Borrowing
Base Amount then in effect;
(iv) The making of the Loans requested on such Funding Date shall not
violate any law including Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System; and
(v) There shall not be pending or, to the knowledge of Holdings or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by Holdings or Company in writing pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the reasonable opinion
of Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect or be inconsistent with the financial statements,
balance sheets or financial projections delivered in accordance with
subsection 4.2L or 4.2M; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
98
4.4 Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (other than the Existing
Letters of Credit) (whether or not the applicable Issuing Lender is obligated to
issue such Letter of Credit) is subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of Letter
of Credit, in each case signed by the chief executive officer, chief
operating officer, president, the principal financial officer, the
principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative
Agent, together with all other information specified in subsection 3.1B(i)
and such other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such Letter of
Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.3B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Holdings and Company represent and
warrant to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
----------------------------------------------------------------
Subsidiaries.
------------
A. Organization and Powers. Each Corporate Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Partnership Loan Party is a duly
organized and validly existing partnership under the laws of its jurisdiction of
formation and is in good standing in such jurisdiction in each case as of the
Effective Date as specified in Schedule 5.1 annexed hereto. Each Loan Party has
------------
all requisite corporate or partnership (as applicable) power and authority to
own and operate its properties, to carry on its business as now conducted and as
proposed
99
to be conducted, to enter into the Loan Documents to which it is a party and to
carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Each Corporate Loan Party is
qualified to do business and in good standing, and each Partnership Loan Party
is authorized as a foreign partnership to do business, in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had and will not have a Material Adverse Effect.
C. Conduct of Business. Holdings and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.13.
D. Subsidiaries. All of the Subsidiaries of Holdings as of the Effective
Date are identified in Schedule 5.1 annexed hereto. The capital stock or other
------------
equity interests of each of Holdings' Subsidiaries any portion of which is
pledged under the Collateral Documents is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock or other equity interests
constitutes Margin Stock. The limited and general partnership interests of each
of the Subsidiaries identified in Schedule 5.1 annexed hereto which are limited
------------
partnerships are duly and validly issued. Each of the Subsidiaries of Holdings
is duly organized or formed, validly existing and in good standing under the
laws of its respective jurisdiction of organization or formation, has all
requisite corporate, limited liability company or partnership power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business and
in good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate,
limited liability company or partnership power and authority has not had and
will not have a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
------------
supplemented) correctly sets forth, as of the Effective Date, the ownership
interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of
Holdings identified therein.
5.2 Authorization of Borrowing, etc.
-------------------------------
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents have been duly authorized by all necessary corporate, limited
liability company and/or partnership (as applicable) action on the part of each
Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties
of the Loan Documents to which they are parties and the consummation of the
transactions contemplated by the Loan Documents do not (i) violate any provision
of any law or any governmental rule or regulation applicable to Holdings or any
of its Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or
other analogous organizational document) of Holdings or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on Holdings or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual
100
Obligation of Holdings or any of its Subsidiaries, (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
Holdings or any of its Subsidiaries (other than any Permitted Encumbrances or
Liens, created under any of the Loan Documents in favor of Collateral Agent) or
(iv) require any approval of stockholders or partners or any approval or consent
of any Person under any Contractual Obligation of Holdings or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Effective Date and disclosed in writing to Lenders or the failure of
which to obtain could not reasonably be expected to have a Material Adverse
Effect.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except to the extent obtained or made and except for those filings
necessary to perfect Liens under the Collateral Documents, other than filings to
effect releases of Liens on or promptly after the Effective Date and other
filings made in the ordinary conduct of business. The execution, delivery and
performance by Loan Parties of the Related Agreements to which they are parties
and the consummation of the transactions contemplated by such Related Agreements
in the manner set forth therein do not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body except (i) to the extent
obtained or made or (ii) where the failure to obtain or make any of the
foregoing, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect.
D. Binding Obligation. Each of the Loan Documents has been duly executed
and delivered by each Loan Party that is a party thereto and is the legally
valid and binding obligation of such Loan Party, enforceable against such Loan
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
E. Valid Issuance of Partnership Units, Senior Notes and Senior Discount
Debentures.
(i) Common Units and Preferred Units. The Common Units and Preferred
--------------------------------
Units issued on the Closing Date have been duly and validly issued and
fully paid on such date. The issuance and sale of such Common Units and
Preferred Units were either (a) registered or qualified under applicable
federal and state securities laws or (b) exempt therefrom.
(ii) Senior Notes. Company has the power and authority to issue the
------------
Senior Notes. The Senior Notes, when issued and paid for, will be the
legally valid and binding obligations of Company, enforceable against
Company in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The Senior
101
Notes, as issued and sold in the manner contemplated by the Related
Agreements on the Closing Date, were either (a) were registered or
qualified under applicable federal and state securities laws or (b) be
exempt therefrom.
(iii) Senior Discount Debentures. Holdings has the power and
--------------------------
authority to issue the Senior Discount Debentures. The Senior Discount
Debentures, when issued and paid for, will be the legally valid and binding
obligations of Holdings, enforceable against Holdings in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The Senior Discount Debentures, as issued and sold in the
manner contemplated by the Related Agreements on the Closing Date, were
either (a) registered or qualified under applicable federal and state
securities laws or (b) exempt therefrom.
(iv) Preferred Units. The Series B Preferred Units issued on the
---------------
Effective Date have been duly and validly issued and fully paid on such
date. The issuance and sale of such Series B Preferred Units were either
(a) registered or qualified under applicable federal and state securities
laws or (b) exempt therefrom.
5.3 Financial Condition.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries for each of Fiscal Years 1996,
1997 and 1998 and the related consolidated statements of income, partner's
capital, and cash flows of Company and its Subsidiaries for each such Fiscal
Year and (ii) the unaudited consolidated and consolidating balance sheets of
Company and its Subsidiaries for each of the months of April and May 1999 and
the Fiscal Quarter ended March 31, 1999 and the related unaudited consolidated
statements of income, partner's capital, and cash flows of Company and its
Subsidiaries for each such period (except for statements of cash flows for each
such monthly period). All such statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments and the absence of
footnotes. On the Effective Date, Holdings and Company do not (and will not
following the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or in the pro forma balance sheet delivered pursuant to subsection
4.2J, or in the financial projections delivered pursuant to subsection 4.2K or
reflected on Schedule 5.3 or the most recent financial statements delivered by
------------
Company pursuant to subsection 6.1 of the Existing Credit Agreement, and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) of Holdings and any of
its Subsidiaries, taken as a whole.
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5.4 No Material Adverse Change.
--------------------------
Since December 31, 1998 no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
5.5 Title to Properties; Liens; Real Property.
-----------------------------------------
A. Title to Properties; Liens. Holdings and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), valid leasehold interests in (in the case of leasehold interests in
real or personal property), valid licenses in (in the case of licensed
intangible properties), or (iv) good title to (in the case of all other personal
property), all of their respective material properties and assets reflected in
the most recent financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1 of the
Existing Credit Agreement or in the most recent financial statements delivered
pursuant to subsection 6.1, in each case subject to Permitted Encumbrances and
Liens permitted under subsection 7.2 and except for assets described on Schedule
--------
5.5A annexed hereto and assets disposed of since the date of such financial
----
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7. Except as otherwise permitted by this Agreement, all such
properties and assets are free and clear of Liens.
B. Real Property. As of the Effective Date, Schedule 5.5 annexed hereto
------------
contains a true, accurate and complete list of (i) all Real Property Assets
owned in fee simple by any Loan Party and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Effective Date, except as specified in
Schedule 5.5 annexed hereto, each agreement referenced in clause (ii) of the
------------
immediately preceding sentence is in full force and effect and Holdings and
Company do not have knowledge of any default that has occurred and is continuing
thereunder (except where the consequences, direct or indirect, of such default
or defaults, if any, would not reasonably be expected to have a Material Adverse
Effect), and each such material agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
5.6 Litigation; Adverse Facts.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Holdings or Company, threatened against or
affecting Holdings or any of its Subsidiaries or
103
any property of Holdings or any of its Subsidiaries and that, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse
Effect. Neither Holdings nor any of its Subsidiaries (i) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect,
or (ii) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect.
5.7 Payment of Taxes.
----------------
Except to the extent permitted by subsection 6.3, all federal, state and
other material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings and Company know of
no proposed material tax assessment against Holdings or any of its Subsidiaries
which is not being actively contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
--------
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
--------------------------------------------------------
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, compliance with
which could reasonably be expected to result in a Material Adverse Effect.
5.9 Governmental Regulation.
-----------------------
Neither Holdings nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
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5.10 Securities Activities.
---------------------
A. Neither Holdings nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
----------------------
A. Holdings and each of its Subsidiaries are in compliance in all material
respects with all applicable provisions and requirements of ERISA and the
regulations and published interpretations thereunder with respect to each of the
respective Employee Benefit Plans, and have performed all their obligations
under each of the respective Employee Benefit Plans. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur which
has or would reasonably be expected to result in a liability to Holdings or any
of its Subsidiaries in excess of $5,000,000.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, the aggregate liabilities with respect to health or welfare
benefits (through the purchase of insurance or otherwise) provided or promised
for any retired or former employee of Holdings or any of its Subsidiaries do not
exceed $5,000,000.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans, does not exceed
$5,000,000.
E. The liability consisting of actual withdrawal liability which has been,
or with respect to potential withdrawal liability, which is reasonably likely to
be, imposed on Holdings, its Subsidiaries and their respective ERISA Affiliates
with respect to withdrawal from Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA, does not exceed $15,000,000.
5.12 Certain Fees.
------------
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby on the date hereof
and Holdings and Company hereby indemnifies Lenders against, and agrees that it
will hold Lenders harmless from, any claim, demand or liability for any
105
such broker's or finder's fees alleged to have been incurred in connection
herewith or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
5.13 Environmental Protection.
------------------------
(i) Neither Holdings nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, in the case of (a), (b) or (c),
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(ii) Neither Holdings nor any of its Subsidiaries has received any
letter or written request for information from any governmental agency
under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S) 9604) or any comparable
state law the subject of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(iii) To Holdings' and Company's knowledge, there are no and have
been no conditions, occurrences, or Hazardous Materials Activities which
could reasonably be expected to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect;
(iv) Holdings and its Subsidiaries maintain an environmental
management system designed to maintain compliance in all material respects
with Environmental Laws and correct any incidents of non-compliance;
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect; and
(vi) No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect.
5.14 Employee Matters.
----------------
There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
106
5.15 Solvency.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such Loan
Party on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
------------------------------
A. Creation, Perfection and Priority of Liens. Except as otherwise set
forth therein, or in Schedule 5.16, of this Agreement the execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections 4.2F, 4.2G, 6.8 and 6.9
or contemplated to be taken thereby and (ii) the delivery to Collateral Agent of
any Pledged Collateral not delivered to Collateral Agent at the time of
execution and delivery of the applicable Collateral Document (all of which
Pledged Collateral shall have been so delivered) are effective to create in
favor of Collateral Agent for the benefit of Lenders, as security for the
respective Secured Obligations (as defined in the applicable Collateral Document
in respect of any Collateral), a valid and perfected First Priority Lien on all
of the Collateral, and, except as otherwise set forth in the Collateral
Documents, all filings and other actions necessary or desirable to perfect and
maintain the perfection and First Priority status of such Liens have been duly
made or taken and remain in full force and effect (other than the filing of UCC
financing continuation statements).
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Collateral Agent pursuant to
any of the Collateral Documents or (ii) the exercise by Collateral Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities or vessels.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Collateral Agent as contemplated by subsection 5.16A, (i) no effective
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office, except with respect to Permitted Encumbrances and Liens permitted under
subsection 7.2A, and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Collateral Agent or Administrative Agent by or on behalf of any Loan Party with
respect to any of the Collateral (in each case
107
taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects as of the date supplied.
5.17 Related Agreements.
------------------
A. Delivery of Related Agreements. On or before the Effective Date,
Company has delivered to Lenders complete and correct copies of each Related
Agreement and of all exhibits and schedules thereto.
B. Seller's Warranties. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
the Company and those parties defined as "Current Owners" to those parties
defined as "Purchasers" in the Recapitalization Agreement (or as of any earlier
date to which such representation and warranty specifically relates) were true
and correct as of the Closing Date (or as of such earlier date, as the case may
be), in each case subject to the qualifications set forth therein and in the
schedules to the Recapitalization Agreement, in each case except to the extent
that the cause of any failure of any such representation or warranty to be true
and correct, either individually or in the aggregate with the causes of the
failures of any other such representations and warranties to be true and
correct, would not reasonably be expected to have a Material Adverse Effect.
▇. ▇▇▇▇▇▇▇▇ Seller's Warranties. Except to the extent otherwise set forth
herein or in the schedules hereto, each of the representations and warranties
given by the Company and those parties defined as "Current Owners" to those
parties defined as "Purchaser" in the Carlisle Acquisition Agreement (or as of
any earlier date to which such representation and warranty specifically relates)
were true and correct as of the Effective Date (or as of such earlier date, as
the case may be), in each case subject to the qualifications set forth therein
and in the schedules to the Carlisle Acquisition Agreement, in each case except
to the extent that the cause of any failure of any such representation or
warranty to be true and correct, either individually or in the aggregate with
the causes of the failures of any other such representations and warranties to
be true and correct, would not reasonably be expected to have a Material Adverse
Effect.
D. Survival. Notwithstanding anything in the Recapitalization Agreement
to the contrary, the representations and warranties of the Current Owners set
forth in subsection 5.17B shall, solely for purposes of this Agreement, survive
the Closing Date for the benefit of Lenders.
5.18 Disclosure.
----------
All representations and warranties of Holdings or any of its Subsidiaries
and all factual information concerning Holdings and its Subsidiaries contained
in the Confidential Information Memorandum or in any Loan Document or in any
other document, certificate or written statement furnished to Lenders by or on
behalf of Holdings or any of its Subsidiaries (other than budgets, projections
or pro forma financial information) for use in connection with the transactions
contemplated by this Agreement, taken as a whole,
108
are true and correct in all material respects as of the date made and do not
omit to state a material fact (known to Holdings or Company, in the case of any
document not furnished by it) necessary in order to make the statements
contained herein or therein (taken as a whole) not materially misleading as of
the date made in light of the circumstances in which the same were made as at
the time made. Any projections and pro forma financial information contained in
such materials are based upon good faith estimates and assumptions believed by
Holdings and Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may materially differ from the projected results. There are no
facts known (or which should upon the reasonable exercise of diligence be known)
to Holdings or Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.19 Subordination of Permitted Seller Notes and Shareholder Subordinated
--------------------------------------------------------------------
Notes.
-----
The subordination provisions of any Permitted Seller Notes and Shareholder
Subordinated Notes or other Subordinated Indebtedness are enforceable against
the holders thereof, and the Loans and other Obligations hereunder are and will
be within the definition of "Senior Indebtedness" or "Senior Debt", or similar
term, as applicable, included in such provisions.
5.20 Year 2000.
---------
Company is Year 2000 Compliant.
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------------------------------------
Holdings will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial
109
statements in conformity with GAAP. Company will deliver to Administrative
Agent, with sufficient copies for each Lender (and Administrative Agent will,
after receipt thereof, deliver to each Lender):
(i) Monthly Financials: as soon as available and in any event within
----------- -------
30 days after the end of each month ending after the date that is one month
after the Closing Date, (other than (y) July 1999, which shall be within 60
days and (z) any month that is also an end of quarter month, which shall be
within 50 days) the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such month and the related consolidated
statements of income of Holdings and its Subsidiaries, (together with
information relating to Consolidated Capital Expenditures and Asset Sales
made during such month), for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail and certified by the
principal financial officer or principal accounting officer of Holdings
that they fairly present, in all material respects, the financial condition
of Holdings and its Subsidiaries as at the dates indicated and the results
of their operations for the periods indicated, subject to changes resulting
from audit and normal year-end and quarterly adjustments and the absence of
footnotes;
(ii) Quarterly Financials: as soon as available and in any event
--------------------
within 50 days after the end of the first, second and third Fiscal Quarter
of each Fiscal Year, (a) the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income and cash flows of Holdings and its
Subsidiaries for such Fiscal Quarter and for the period from the beginning
of the then current Fiscal Year to the end of such Fiscal Quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, all in
reasonable detail and certified by the principal financial officer or
principal accounting officer of Holdings that they fairly present, in all
material respects, the financial condition of Holdings and its Subsidiaries
as at the dates indicated and the results of their operations and their
cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments and the absence of footnotes, and (b)
a narrative report describing the operations of Holdings and its
Subsidiaries in the form prepared for presentation to senior management for
such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter; provided, however,
-------- -------
that Company may deliver to Administrative Agent in lieu of such narrative
report copies of the unaudited quarterly report filed by Holdings with the
Securities and Exchange Commission on Form 10-Q in respect of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 105 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, partner's capital,
110
and cash flows of Holdings and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements,
all in reasonable detail and certified by the principal financial officer
or principal accounting officer of Holdings that they fairly present, in
all material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, (b) a narrative report
describing the operations of Holdings and its Subsidiaries in the form
prepared for presentation to senior management for such Fiscal Year,
provided, however, that Company may deliver to Administrative Agent in lieu
-------- -------
of such narrative report copies of the report filed by Holdings with the
Securities and Exchange Commission on Form 10-K in respect of such Fiscal
Year, and (c) in the case of such consolidated financial statements, a
report thereon of an Independent Public Accountant, which report shall be
unqualified, shall express no doubts about the ability of Holdings and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects,
the consolidated financial position of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and (d) to the
extent available, information reflecting utilization rates of the Cranes
and Lifting Equipment and Excavation Equipment for such period;
(iv) Officers' and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Holdings stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Holdings has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
(except in respect of monthly financial statements) with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
(v) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries
delivered
111
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1
will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions had
no such change in accounting principles and policies been made, then (1)
together with the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, consolidated financial statements of Holdings and its
Subsidiaries for (y) the current Fiscal Year to the effective date of such
change and (z) the two full Fiscal Years immediately preceding the Fiscal
Year in which such change is made, in each case prepared on a pro forma
basis as if such change had been in effect during such periods, and (2)
together with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the principal accounting officer or principal
financial officer of Holdings setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Holdings and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default of a financial nature has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
--------
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is not
correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Holdings by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to analysts
or its security holders or by any Subsidiary of Holdings to analysts or its
security holders other than Holdings or another Subsidiary of Holdings, (b)
all regular and
112
periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other written, publicly announced notices by
Holdings or any of its Subsidiaries concerning material developments in the
business of Holdings or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Responsible Officer
----------------------
of Holdings or Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (b) that any Person has
given any notice to Holdings or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the type
referred to in subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by Holdings or Company
with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5
and 6 of such Form as in effect on the date hereof) if Holdings or Company
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Holdings or Company has taken, is taking and proposes to take with respect
thereto;
(x) Litigation or Other Proceedings: promptly upon any Responsible
-------------------------------
Officer of Holdings or Company obtaining knowledge of (a) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Holdings or Company
to Lenders or (b) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Holdings or Company to enable Lenders and their
counsel to evaluate such matters;
113
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
------------
or forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan, as Administrative Agent shall reasonably request; (b) all notices
received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 30 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and the next succeeding
Fiscal Year (the "Financial Plan" for such Fiscal Years), including (a) a
forecasted consolidated balance sheet and forecasted consolidated
statements of income together with forecasted asset sales and capital
expenditures (prepared on a monthly basis for such Fiscal Year and on an
annual basis for the succeeding Fiscal Year) and annual cash flows of
Holdings and its Subsidiaries for each such Fiscal Year, together with a
pro forma Compliance Certificate for the first such Fiscal Year and an
--- -----
explanation of the assumptions on which such forecasts are based, and (b)
such other information regarding such projections as Administrative Agent
may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the last
---------
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material changes made to insurance
coverage maintained as of the Effective Date or the date of the most recent
such report by Holdings and its Subsidiaries;
(xv) New Subsidiaries: promptly upon any Person becoming a Subsidiary
----------------
of Holdings, a written notice setting forth with respect to such Person (a)
the date on which such Person became a Subsidiary of Holdings and (b) the
ownership and debt and equity capitalization of such Subsidiary;
(xvi) Material Contracts: promptly, and in any event within ten
------------------
Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated prior to its scheduled term or amended in a
manner that is materially adverse to Holdings or such Subsidiary, as the
case may be, or any new Material Contract is entered into, a written
statement describing such event with
114
copies of such material amendments or new contracts, and an explanation of
any actions being taken with respect thereto;
(xvii) Borrowing Base Certificate and Forward Commitments.
--------------------------------------------------
Commencing with the monthly accounting period beginning August 1, 1998, as
soon as available and in any event within 15 days after the end of each
monthly accounting period (ending on the last day of each calendar month),
furnish to the Administrative Agent (i) a Borrowing Base Certificate as at
the last day of such accounting period and (ii) information regarding any
forward purchase commitments for any Rental Equipment then in effect; and
(xviii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Holdings or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 Corporate/Partnership Existence, etc.
------------------------------------
Except as permitted under subsection 7.7, Holdings will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate or partnership existence, as applicable, and all rights and
franchises material to its business; provided, however that neither Holdings nor
-------- -------
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Holdings or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of Holdings or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to Holdings, such
Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
----------------------------------------------
A. Holdings will, and will cause each of its Subsidiaries to, pay all
federal, state and other material taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
material sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
--------
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(1) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion of
the Collateral to satisfy such charge or claim.
B. Holdings will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Holdings, General Partner or any of its Subsidiaries).
115
6.4 Maintenance of Properties; Insurance; Application of Net
--------------------------------------------------------
Insurance/Condemnation Proceeds.
-------------------------------
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained, at a general maintenance
standard at least equal to that in existence as of the Closing Date, in good
repair, working order and condition, ordinary wear and tear and damage by
casualty excepted, all material properties used or useful in the business of
Company and its Subsidiaries (including all Intellectual Property) and from time
to time will make or cause to be made all repairs, renewals and replacements
thereof which are useful, customary or appropriate for companies in similar
businesses; and Company will, and will cause each of its Subsidiaries to, keep
all such material properties, including, without limitation all Rental Equipment
in the United States, other than (i) assets located in the United States Virgin
Islands and (ii) other assets located in (y) Canada or a Caribbean jurisdiction
or (z) other jurisdictions; provided that the total value of such assets
contributed or otherwise financed by Company or a Permitted Domestic Subsidiary
with respect to a Permitted Foreign Subsidiary or invested by Company in a
Permitted Domestic Subsidiaries in such foreign jurisdictions identified in the
preceding clause (ii) or located in foreign jurisdictions identified in the
preceding clause (ii) shall not exceed 3% of the book value of the consolidated
total assets of Company and its Subsidiaries.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Company
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for Persons similarly situated in the industry. Without
limiting the generality of the foregoing, Company will maintain or cause to be
maintained (i) flood insurance with respect to each Flood Hazard Property that
is located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System, and (ii) replacement value property
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are in accordance with normal industry practice. Each such policy of
insurance related to property damage or casualty shall (a) name Collateral Agent
for the benefit of Lenders as an additional insured thereunder as its interests
may appear and (b) in the case of each business interruption and casualty
insurance policy, contain a loss payable clause or endorsement, reasonably
satisfactory in form and substance to Collateral Agent, that names Collateral
Agent for the benefit of Lenders and lenders under the Second Priority Term Loan
Credit Agreement as the loss payee thereunder for any covered loss in excess of
the greater of (y) $15,000,000 or (z) 2% of consolidated total assets of Company
and its Subsidiaries in any Fiscal Year and provides for at least 30 days prior
written notice to Collateral Agent of any modification or cancellation of such
policy.
116
C. Application of Net Insurance/Condemnation Proceeds.
(i) Casualty Insurance/Condemnation Proceeds. Within ten Business Days of
----------------------------------------
receipt by Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds, (a) so long as no Event of Default shall have occurred and be
continuing, and so long as the aggregate amount of Net Insurance/Condemnation
Proceeds received in any Fiscal Year does not exceed an amount equal to 2% of
the consolidated total assets of Holdings and its Subsidiaries, Company may
deliver to Administrative Agent an Officers' Certificate setting forth (1) that
portion of such Net Insurance/Condemnation Proceeds (the "Proposed Insurance
Reinvestment Proceeds") that Company or such Subsidiary intends to use (or enter
into a contract to use) within 365 days of such date of receipt to pay or
reimburse the costs of repairing, restoring or replacing the assets in respect
of which such Net Insurance/Condemnation Proceeds were received or to reinvest
in assets used in the ordinary course of the business and (2) the proposed use
of the Proposed Insurance Reinvestment Proceeds and such other information with
respect to such proposed use as Administrative Agent may reasonably request, and
Company shall, or shall cause one or more of its Subsidiaries to, promptly and
diligently apply such Proposed Insurance Reinvestment Proceeds to pay or
reimburse the costs of repairing, restoring or replacing the assets in respect
of which such Proposed Insurance Reinvestment Proceeds were received, or to
reinvest in assets used in the ordinary course of business of Company or, to the
extent the aggregate amount of Net Insurance/Condemnation Proceeds received in
any Fiscal Year exceeds an amount equal to 2% of the consolidated assets of
Holdings and its Subsidiaries and are not so applied, to prepay the Loans as
provided in subsection 2.4B(iii)(b), and (b) if an Event of Default shall have
occurred and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in subsection
2.4B(iii)(b).
(ii) Net Insurance/Condemnation Proceeds Received by Collateral Agent. (a)
----------------------------------------------------------------
Within ten Business Days of receipt by Collateral Agent of any Net
Insurance/Condemnation Proceeds as loss payee, if and to the extent Company or
Company would have been required to apply such Net Insurance/Condemnation
Proceeds (if it had received them directly) to prepay the Loans pursuant to
clause (i) above, Collateral Agent shall, and Company hereby authorizes
Collateral Agent to, apply such Net Insurance/Condemnation Proceeds to prepay
the Loans as provided in subsection 2.4B(iii)(b), and (b) within ten Business
Days of receipt by Collateral Agent of any Net Insurance/Condemnation Proceeds
as loss payee to the extent the foregoing clause (a) does not apply, Collateral
Agent shall deliver such Net Insurance/Condemnation Proceeds to Company, and
Company shall, or shall cause one or more of its Subsidiaries to, apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received or to reinvestment in assets used in the ordinary course
of the business.
117
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender
----------------------------------------------------------------------
Meeting; Internal Audit; Supplemental Appraisal.
-----------------------------------------------
A. Inspection Rights. Holdings shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Holdings or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Holdings or Company may, if they so choose, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested; provided, that each Lender shall coordinate with Administrative Agent
--------
the frequency and timing of such visits and inspections so as to reasonably
minimize the burden imposed on Holdings and its Subsidiaries; and provided
--------
further, that, so long as no Potential Event of Default or Event of Default
-------
shall have occurred and be continuing, there shall be no more than one such
visit by Lenders in any calendar month.
B. Audits of Inventory and Accounts Receivable. Holdings shall, and shall
cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent to (i) conduct one audit of all books,
records, Parts and Supplies Inventory and accounts receivable of Loan Parties
during each twelve-month period after the Closing Date, each such audit to be in
scope and substance reasonably satisfactory to Administrative Agent, and (ii) to
review the results of the initial audit referred to in subsection 6.5D, all upon
reasonable notice and at such reasonable times during normal business hours as
may reasonably be requested.
C. Lender Meeting. Company will, upon the request of Administrative Agent
or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Holdings and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
D. Internal Audit. Once each calendar year, Company will provide to
Administrative Agent a copy of Company's internally prepared audit of Eligible
Cranes and Lifting Equipment, Eligible Trucks and Trailers and Eligible
Excavation Equipment which shall include physical confirmation of the existence
and appropriate titling of each item of such equipment with an original purchase
price or Orderly Liquidation Value in excess of $500,000.
E. Supplemental Appraisal. Once each calendar year, Company will deliver
to Administrative Agent a Supplemental Appraisal.
6.6 Compliance with Laws, etc.
-------------------------
Holdings shall comply, and shall cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all
118
Environmental Laws), except where noncompliance would not reasonably be expected
to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Actions Regarding
---------------------------------------------------------------------------
Hazardous Materials Activities, Environmental Claims and Violations of
----------------------------------------------------------------------
Environmental Laws.
------------------
A. Environmental Review and Investigation. Holdings and Company agree
that Administrative Agent may, (i) at any time a fact, event or condition arises
that, in Administrative Agent's reasonable discretion, Administrative Agent
determines could give rise to environmental liabilities that would materially
adversely affect any material Facility, retain, at Company's expense, an
independent professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous Materials at such
Facility prepared by or for Company and (ii) in the event (a) Administrative
Agent reasonably believes that Company or Holdings has breached any
representation, warranty or covenant contained in subsection 5.6 (with respect
to Environmental Claims or Environmental Laws), 5.13, 6.6 (with respect to
Environmental Laws) or 6.7 in any material respect or that there has been a
material violation of Environmental Laws at any Facility or by Holdings or any
of its Subsidiaries at any other location conduct its own investigation of such
breach or violation or (b) an Event of Default has occurred and is continuing,
conduct its own investigation of any Facility; provided that, in the case of any
--------
Facility no longer owned, leased, operated or used by Holdings or any of its
Subsidiaries, Company and Holdings shall only be obligated to use their
reasonable best efforts to obtain permission for Administrative Agent's
professional consultant to conduct an investigation of such Facility. For
purposes of conducting an investigation pursuant to clause (ii) of the preceding
sentence, Company and Holdings hereby grant to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Holdings or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith (to the extent, at any Facility
leased by Holdings or any of its Subsidiaries, such actions are permitted by the
owner of such Facility). Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Holdings and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Holdings, Company
and Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company and Holdings acknowledge
and agree that (x) they will indemnify and hold harmless Administrative Agent
and each Lender from any costs, losses or liabilities relating to Holdings' or
Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such report,
and (z) by delivering such report to Company, neither Administrative Agent nor
any Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
119
B. Environmental Disclosure. Company will deliver to Administrative
Agent, with sufficient copies for each Lender (and Administrative Agent will,
after receipt thereof, deliver to each Lender):
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility that could reasonably
be expected to have a Material Adverse Effect.
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
-------------------------------------------------
the occurrence thereof, written notice describing in reasonable detail (a)
any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws
unless such Release could not reasonably be expected to result in a
Material Adverse Effect, (b) any remedial action taken by Company, Holdings
or any other Person in response to (1) any Hazardous Materials Activities
the existence of which would reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims of which Holdings
or any of its Subsidiaries has notice that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect, and (c) Company's or Holdings' discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any material
Facility that would reasonably be expected to cause such material Facility
or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws, unless such restrictions could not reasonably be
expected to have a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
------------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
-------------
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, would reasonably be expected to give rise
to a Material Adverse Effect, (b) any Release required to be reported to
any federal, state or local governmental or regulatory agency unless such
Release could not reasonably be expected to result in a Material Adverse
Effect, and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity unless such Hazardous Materials Activity could not reasonably be
expected to have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
--------------------------------------------------------------
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to (1) expose Holdings or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability
120
of Holdings or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any Environmental
Laws for their respective operations and (b) any proposed action to be
taken by Holdings or any of its Subsidiaries to modify current operations
in a manner that would reasonably be expected to subject Holdings or any of
its Subsidiaries to any material additional obligations or requirements
under any Environmental Laws where such obligations or reimbursements would
reasonably be expected to have a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Holdings' and Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
Holdings shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim that would, in either case, reasonably be expected to
have a Material Adverse Effect. In the event Holdings or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Holdings or such Subsidiary shall conduct and complete such
action in material compliance with all applicable Environmental Laws and in
accordance an all material respects with the policies, orders and
directives of all federal, state and local governmental authorities except
when, and only to the extent that, Holdings' or such Subsidiary's liability
with respect to such Hazardous Materials Activity is being contested in
good faith by Holdings or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
--------------------------------------------------------------
Environmental Laws. Holdings shall promptly take, and shall cause each of
------------------
its Subsidiaries promptly to take, any and all reasonable actions necessary
to (i) cure any violation of applicable Environmental Laws by Holdings or
its Subsidiaries where such violation would reasonably be expected to have
a Material Adverse Effect and (ii) make an appropriate response to any
Environmental Claim against Holdings or any of its Subsidiaries (of which
Holdings or any of its Subsidiaries has notice) where such Environmental
Claim would reasonably be expected to have a Material Adverse Effect, and
discharge any material obligations it may have to any Person thereunder.
121
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
---------------------------------------------------------------------------
by Subsidiaries and Future Subsidiaries.
---------------------------------------
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Subsidiary which is an Excluded Subsidiary as
of the Effective Date ceases to be an Excluded Subsidiary or any Person becomes
a Subsidiary (other than an Excluded Subsidiary) of Company after the date
hereof, Company will promptly notify Administrative Agent of that fact and cause
such Subsidiary to execute and deliver to Administrative Agent counterparts of
the Subsidiary Guaranty and the Pledge and Security Agreement and to take all
such further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.2G) as may be reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan Documents pursuant to
clause A above, (i) (y) if such Subsidiary is a corporation (a) certified copies
of such Subsidiary's Certificate or Articles of Incorporation, together with a
good standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (b) a copy of such Subsidiary's Bylaws, certified by its
secretary or an assistant secretary as of a recent date prior to their delivery
to Administrative Agent, (c) a certificate executed by the corporate secretary
or an assistant corporate secretary of such Subsidiary as to (i) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (ii) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (ii) (z) if such Subsidiary is a limited partnership, (a) from or
with respect to such Subsidiary's General Partner, each of the items required to
be delivered under item (a) of clause (x) above with respect to such General
Partner, if it is a corporation, (b) certified copies of its Certificate of
Limited Partnership, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation or formation, each dated
a recent date prior to their delivery to Administrative Agent, and (c) copies of
its limited partnership agreement, certified as true, correct and in full force
and effect as of the date of its delivery to Administrative Agent, by the
corporate secretary or an assistant secretary of its general partner or an
officer of its limited partner, and (iii) to the extent requested by
Administrative Agent, a favorable opinion of counsel to such Subsidiary, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
as to (a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such
122
Loan Documents) as Administrative Agent may reasonably request, all of the
foregoing to be reasonably satisfactory in form and substance to Administrative
Agent and its counsel.
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
-------------------------------------------------------------------
Property Collateral.
-------------------
A. Conforming Leasehold Interests. If Holdings or any of its Subsidiaries
acquires any Material Leasehold Property, Holdings shall use commercially
reasonable efforts to, or shall cause such Subsidiary to use commercially
reasonable efforts to, cause such Leasehold Property to be a Conforming
Leasehold Interest and Holdings shall deliver evidence of the foregoing to
Administrative Agent.
B. Additional Mortgages, Etc. From and after the Effective Date, in the
event that (i) Holdings or any Subsidiary Guarantor acquires any fee interest in
real property, except any real property acquired or refinanced with the proceeds
of any Additional Secured Indebtedness, or any Material Leasehold Property or
(ii) at the time any Person becomes a Subsidiary Guarantor, such Person owns or
holds any fee interest in any Material Real Property Asset or any Material
Leasehold Property, in either case excluding any such Material Real Property
Asset or Material Leasehold Property the encumbrancing of which requires the
consent of any applicable lessor or (in the case of clause (ii) above) then-
existing senior lienholder, where Holdings and its Subsidiaries are unable,
after exercising commercially reasonable efforts, to obtain such lessor's or
senior lienholder's consent (any such non-excluded Material Real Property Asset
described in the foregoing clause (i) or (ii) being an "Additional Mortgaged
Property"), Holdings or such Subsidiary Guarantor shall deliver to
Administrative Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property or becomes a Subsidiary Guarantor, as the case may
be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage (an
-------------------
"Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
-------------------
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral related to such Additional Mortgaged
Property) as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;
123
(iii) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount reasonably
satisfactory to Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property, subject only to standard survey
exceptions, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances (in each case, if
available) under this Agreement and for any other matters reasonably
requested by Administrative Agent and (2) shall provide for affirmative
insurance and such reinsurance as Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfactory
to Administrative Agent; and (b) evidence satisfactory to Administrative
Agent that such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Additional Mortgage Policy and (ii) paid to the
Title Company or to the appropriate governmental authorities all expenses
and premiums of the Title Company in connection with the issuance of the
Additional Mortgage Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate records;
provided, however, that Administrative Agent shall allow for such
reasonable revisions to the applicable Mortgage and shall otherwise take
such steps as are reasonable and customary to minimize recording, mortgage
recording, stamp, documentary and intangible taxes, at Company's cost;
(iv) Title Report. If no Additional Mortgage Policy is required with
------------
respect to such Additional Mortgaged Property, a title report issued by the
Title Company with respect thereto, last updated not more than 30 days
prior to the date such Additional Mortgage is to be recorded and reasonably
satisfactory in form and substance to Administrative Agent;
(v) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vi) Matters Relating to Flood Hazard Properties. (a) To the extent
-------------------------------------------
reasonably requested by the Administrative Agent, evidence, which may be in
the form of a surveyor's note on a survey or a report from a flood hazard
search firm, as to (1) whether such Additional Mortgaged Property is a
Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgment of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance
124
Program, and (c) in the event such Additional Mortgaged Property is a Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, evidence that Holdings or Company has
obtained flood insurance in respect of such Flood Hazard Property to the
extent required under the applicable regulations of the Board of Governors
of the Federal Reserve System; and
(vii) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Holdings or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
C. Real Estate Appraisals. To the extent reasonably requested by the
Administrative Agent, Holdings shall, and shall cause each of its Subsidiaries
to, permit an independent real estate appraiser reasonably satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.10 Interest Rate Protection.
------------------------
At all times after the date which is 90 days after the Effective Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, each such Interest Rate Agreement to be for a term and in
form and substance reasonably satisfactory to Administrative Agent, which
Interest Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate
Component (as hereinafter defined) of the interest costs to Company with respect
to an aggregate notional principal amount of not less than 50% of the aggregate
principal amount of Loans outstanding from time to time (based on the assumption
that such notional principal amount was a Eurodollar Rate Loan with an Interest
Period of three months) to a rate equal to not more than 8.0% per annum. For
purposes of this subsection 6.10, the term "Unadjusted Eurodollar Rate
Component" means that component of the interest costs to Company in respect of a
Eurodollar Rate Loan that is based upon the rate obtained pursuant to clause (i)
of the definition of Adjusted Eurodollar Rate.
6.11 Post-Closing Deliveries.
-----------------------
Company shall cause any actions set forth on Schedule 6.11 annexed hereto
-------------
to be taken within the time period(s) specified on such Schedule 6.11 and in
-------------
form and substance reasonably satisfactory to Agents.
125
6.12 Deposit Accounts and Cash Management Systems.
--------------------------------------------
Company, and shall cause each of its Subsidiaries to, use and maintain its
Deposit Accounts and cash management systems in a manner reasonably satisfactory
to Administrative Agent and comply with limitations on cash on hand, all as set
forth on Schedule 6.12 annexed hereto.
-------------
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 7.
7.1 Indebtedness.
------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries and Transitory Subsidiaries may
become and remain liable with respect to (a) Indebtedness in respect of
Capital Leases and (b) Indebtedness secured by Liens permitted under
subsection 7.2A(viii); provided that the outstanding aggregate amount of
--------
Indebtedness described in clauses (a) and (b), together with the amount of
any purchase money Indebtedness and Capital Lease obligations of the type
permitted under subsection 7.1(ix), shall not exceed an amount equal to the
book value of 5% of total assets of Company and its Subsidiaries and
Transitory Subsidiaries at the time of incurrence thereof.
(iv) Company may become and remain liable with respect to Indebtedness
to any wholly-owned Permitted Subsidiary, and any wholly-owned Permitted
Subsidiary may become and remain liable with respect to Indebtedness to
Company or any other wholly-owned Subsidiary;
126
provided that (a) all such intercompany Indebtedness shall be evidenced by
--------
promissory notes, (b) all such intercompany Indebtedness owed by Company to
any such Subsidiary shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, (c) any
payment by any such Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Subsidiary to Company or to any of
such Subsidiary Guarantors for whose benefit such payment is made, and (d)
in the case of any Indebtedness incurred by a Permitted Domestic Subsidiary
or Permitted Foreign Subsidiary, such Indebtedness is incurred in
accordance with the definitions thereof;
(v) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by the Second Priority Term Loan Credit
Documents;
(vi) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by, and with respect to guaranties of,
the Senior Notes and the Senior Discount Debentures;
(vii) Holdings may become and remain liable with respect to
Shareholder Subordinated Notes issued in lieu of cash payments permitted
under subsection 7.5 to repurchase Securities of Holdings held by
terminated employees and officers;
(viii) Holdings or Company may become and remain liable with respect
to Permitted Seller Notes issued as consideration in Permitted
Acquisitions; provided that the aggregate principal amount of Permitted
Seller Notes issued by both Holdings and Company shall not exceed
$15,000,000 at any time outstanding; provided that Holdings may issue
Permitted Seller Notes in amounts in excess of that otherwise permitted
under this clause (viii) so long as such Permitted Seller Notes shall not
provide for any cash call or cash payment of principal or interest prior to
the final maturity of the Loans;
(ix) Subject to the applicable restrictions of subsections 7.1(iii)
and 7.1(xv), Company, a Transitory Subsidiary or any Permitted Subsidiary
acquired pursuant to a Permitted Acquisition may become or remain liable
with respect to Indebtedness of a Subsidiary of Company existing at the
time of acquisition by Company or a Subsidiary or a Transitory Subsidiary
of a Subsidiary or assets pursuant to a Permitted Acquisition; provided
--------
that (a) such Indebtedness was not incurred in connection with or in
anticipation of such Permitted Acquisition, (b) such Indebtedness does not
constitute debt for borrowed money (other than debt for borrowed money
incurred in connection with industrial revenue or industrial development
bond financings), it being understood and agreed that Capital Lease
obligations and purchase money Indebtedness shall not constitute debt for
borrowed money for purposes of this clause (ix) and (c) at the time of such
Permitted Acquisition such Indebtedness does not exceed 10% of the total
value of the assets of such Subsidiary so acquired, or of the assets so
acquired, as the case may be; provided, however, that (a) the
--------
127
aggregate amount of any such Capital Lease obligations and purchase money
Indebtedness, together with the aggregate amount of other Indebtedness of
the type permitted under subsection 7.1(iii), in each case at any time
outstanding, shall not exceed the maximum amount set forth in such
subsection, and (ii) the aggregate amount of any such Indebtedness other
than Capital Lease obligations and purchase money Indebtedness, together
with other Indebtedness of the type permitted under subsection 7.1(xv), in
each case at any time outstanding, shall not exceed the maximum amount set
forth in such subsection;
(x) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1 annexed hereto;
------------
(xi) Company and its Subsidiaries or Transitory Subsidiaries may
become and remain liable with respect to Indebtedness incurred by the
Company or any of its Subsidiaries or any Transitory Subsidiaries arising
from agreements providing for indemnification, adjustment of purchase price
or similar obligations, or from guarantees or letters of credit, surety
bonds or performance bonds securing the performance of the Company or any
such Subsidiary or Transitory Subsidiary pursuant to such agreements, in
connection with acquisitions or dispositions of any business, assets or
Subsidiary of the Company or any of its Subsidiaries or a Transitory
Subsidiary and Holdings may become and remain liable with respect to any of
the foregoing types of obligations assumed or incurred by Holdings in
connection with a Permitted Acquisition by or through a Transitory
Subsidiary;
(xii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness which may be deemed to exist pursuant to any
guarantees, performance, surety, statutory, appeal or similar obligations
obtained in the ordinary course of business;
(xiii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(xiv) Holdings may become and remain liable with respect to
Indebtedness of Holdings in respect of any Restricted Junior Payment made
to it and permitted hereunder to the extent such Restricted Junior Payment
is recharacterized as a loan instead of a distribution;
(xv) Company and its Subsidiaries and Transitory Subsidiaries may
become and remain liable with respect to Indebtedness not otherwise
permitted under this subsection; provided that the aggregate principal
--------
amount of such Indebtedness, together with the amount of any Indebtedness
of the type permitted under subsection 7.1(ix) (other than Capital Lease
obligations and purchase money Indebtedness), shall not exceed $30,000,000
at any time outstanding; provided that, any portion of such Indebtedness
--------
which is secured (x) shall not exceed $15,000,000 in the aggregate at any
one time outstanding, (y) shall only be secured by assets acquired after
the Closing Date or
128
assets for which the Collateral Agent has agreed to release the Lien of the
Collateral Documents, provided, further that, in no event shall such assets
-------- -------
be any Collateral included in the Borrowing Base Amount, and (z) shall have
terms and provisions no more favorable to the lender(s) of such
Indebtedness in any material respect to the term and provisions of this
Agreement and the other Loan Documents (any such secured Indebtedness, the
"Additional Secured Indebtedness") and; provided still further that, any
-------- ----- -------
such Indebtedness outstanding under this clause (xv) in excess of
$15,000,000 shall be unsecured and subordinated to the Loans, the Term
Loans and the Second Priority Term Loans upon terms reasonably acceptable
to the Administrative Agent and no principal payments of such Indebtedness
shall be made during the term of the Loans or the Term Loan;
(xvi) Subsidiaries of Company and Transitory Subsidiaries may become
and remain liable with respect to Indebtedness consisting of a converted
equity Investment by Company or another Subsidiary of Company in such
Subsidiaries or Transitory Subsidiaries; provided that the underlying
--------
equity Investment was permitted hereunder at the time of such conversion;
and
(xvii) liabilities of Company or Permitted Subsidiaries under
Permitted Earn-Out Agreements.
Notwithstanding anything herein to the contrary, obligations incurred by
Company and its Subsidiaries in connection with the purchase of new or used
equipment in the ordinary course of business by the Company that is financed on
terms of six (6) months or less shall not be deemed Indebtedness for the purpose
of this subsection 7.1.
7.2 Liens and Related Matters.
-------------------------
A. Prohibition on Liens. Holdings shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens created hereunder and pursuant to the Collateral Documents
in favor of the Collateral Agent for the benefit of the Lenders and/or the
lenders under the Second Priority Term Loan Credit Agreement securing Loan
Parties' obligations under this Agreement, the Second Priority Term Loan
Credit Agreement and/or under Hedge Agreements with any such Lenders
129
and/or lenders or their respective affiliates; provided that such Liens for
--------
the benefit of the lenders under this Agreement shall at all times secure
the Obligations on a First Priority basis;
(iii) Liens arising in connection with Capital Leases permitted under
subsection 7.1(iii)(a) and Section 7.9; provided that no such Lien shall
--------
extend to or cover any Collateral or assets other than the assets subject
to such Capital Leases;
(iv) Liens of landlords arising under lease contracts in the ordinary
course of business;
(v) Liens consisting of rights of set-off and off-set of a customary
nature or bankers' liens on amounts of deposit, whether arising by contract
or operation of law, incurred in the ordinary course of business;
(vi) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by Company
or any of its Subsidiaries or Transitory Subsidiaries in connection with
any letter of intent or purchase agreement entered into by it and any of
the foregoing Liens may be created or incurred by Holdings in connection
with a Permitted Acquisition by or through Transitory Subsidiary only to
the extent that Company would have been permitted to create or incur such
Liens with respect to a Permitted Acquisition;
(vii) Liens incurred in connection with the purchase or shipping of
goods or assets on the related assets and proceeds thereof in favor of the
seller or shipper of such goods or assets;
(viii) Liens securing Indebtedness permitted by subsection 7.1(iii)(b)
incurred (a) to finance the acquisition, construction or improvement of any
real property or tangible personal property assets acquired or held by
Company or any of its Subsidiaries in the ordinary course of business;
provided that (1) such Liens shall be created within 180 days after the
--------
acquisition, construction or improvement of such assets, and (2) the
principal amount of Indebtedness secured by any such Liens shall at no time
exceed 100%, and the proceeds of such Indebtedness shall be used to provide
not less than 75%, of the original purchase price of such asset or the
amount expended to construct or improve such asset, as the case may be; or
(b) to renew, extend or refinance any Indebtedness described in clause (a);
provided that the amount of any such Indebtedness does not exceed the
--------
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; and provided further, that in the case of clause (a) or (b),
-------- -------
(1) such Liens attach solely to the assets financed with such Indebtedness,
(2) no recourse may be had under the Indebtedness secured by such Lien
against any Person other than the borrower of such Indebtedness for the
payment of principal, interest, fees, costs or premium on such Indebtedness
or for any claim based thereon, and (3) the financial covenants under any
Indebtedness secured by such Liens are, in each case, no more restrictive
than those set forth in this Agreement;
130
(ix) Liens securing Indebtedness permitted pursuant to subsection
7.1(ix) to the extent such Liens were in existence prior to a Permitted
Acquisition;
(x) Liens incurred in connection with the sale or factoring of
accounts receivable by Permitted Foreign Subsidiaries;
(xi) Liens securing Additional Secured Indebtedness;
(xii) Liens securing reimbursement of obligations in respect of
documentary letters of credit; provided, that such Liens attach only to the
documents, the goods covered thereby and the proceeds thereof;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of the Company or any of its Subsidiaries securing such Person's
obligations in respect of bankers' acceptance issued or created or the
account of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods;
(xiv) Liens encumbering customary initial deposits and margin
deposits, and similar Liens attaching to commodity trading accounts or
other brokerage accounts incurred in the ordinary course of business; and
(xv) Other Liens securing Indebtedness in an aggregate amount not to
exceed $2,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lenders. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
--------
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an asset sale, neither Holdings nor any
of its Subsidiaries shall enter into any agreement (other than the Senior Note
Indenture, the Senior Discount Debentures, the Second Priority Term Loan Credit
Documents, the Loan Documents or any other agreement evidencing acquired
Indebtedness or any agreement, note or indenture relating to any Indebtedness
under any debt basket, or any other agreement prohibiting only the creation of
Liens securing Subordinated Indebtedness) prohibiting the creation or assumption
of any Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
131
D. No Restrictions on Subsidiary Distributions to Holdings or Other
Subsidiaries. Except as provided herein, Holdings will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Holdings or any
other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (iv) transfer any
of its property or assets to Holdings or any other Subsidiary of Holdings,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Loan Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Company or any of its Subsidiaries, (d) customary
provisions restricting assignment of any licensing or other agreements entered
into by Company or any of its Subsidiaries in the ordinary course of business,
(e) the Senior Note Indenture, the Senior Discount Debentures, and the Second
Priority Term Loan Credit Documents or any agreement evidencing acquired
Indebtedness or any agreement, note or indenture relating to any Indebtedness
under any debt basket, and (f) customary provisions restricting the transfer of
assets subject to Liens permitted under subsections 7.2A.
7.3 Investments; Joint Ventures.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own Investments in Cash
Equivalents;
(ii) Holdings may continue to own the Investments owned by it as of
the Effective Date in Company, and Company and its Subsidiaries may
continue to own the Investments owned by them as of the Effective Date in
any Subsidiaries of Company and make Investments in Permitted Subsidiaries,
other than Carlisle (except with respect to cash equity contributions to
Carlisle subject to the 3% limit set forth in the definition of Permitted
Domestic Subsidiaries), in accordance with the definitions of Permitted
Domestic Subsidiaries and Permitted Foreign Subsidiaries;
(iii) Holdings and its Subsidiaries may own Investments in their
respective Subsidiaries to the extent that such Investments reflect an
increase in the value of such Subsidiaries;
(iv) Company and its Subsidiaries and Transitory Subsidiaries may make
intercompany loans to the extent permitted under subsections 7.1(iv) and
(xiv);
(v) Company and its Subsidiaries may continue to own the Investments
owned by them and described in Schedule 7.3 annexed hereto;
------------
132
(vi) Company and its Subsidiaries may make loans and advances to
employees, officers, executives or consultants to Company and its
Subsidiaries in the ordinary course of business of Company and its
Subsidiaries as presently conducted for the purpose of purchasing
Securities of Holdings so long as no cash is paid by Holdings or any of its
Subsidiaries in connection the acquisition of such Securities;
(vii) Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of Company or any such Subsidiary;
(viii) Company and its Subsidiaries 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 in
the ordinary course of business;
(ix) Company and its Subsidiaries may make and own Investments
consisting of deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases and may make any
pledges or deposits permitted under subsection 7.2;
(x) Holdings may make equity contributions to the capital of Company
and Transitory Subsidiaries;
(xi) Holdings, Company and its Permitted Subsidiaries and Transitory
Subsidiaries may make and own Investments in Subsidiaries pursuant to
Permitted Acquisitions under subsection 7.7(xiii); provided, that Holdings
--------
may only make and own Investments in Transitory Subsidiaries pursuant to
this provision;
(xii) Company and its Permitted Subsidiaries may make and own
Investments consisting of notes received in connection with any Asset Sale
or sale of other assets; provided that the aggregate principal amount of
--------
such notes at any time outstanding shall not exceed 1-1/2% of consolidated
total assets of Company and its Subsidiaries and such notes are secured by
a first priority perfected lien on such assets sold;
(xiii) Company and its Permitted Subsidiaries may make and own
Investments in any Person which (a) (1) result in the creation of an
account arising in the ordinary course of Company's or such Permitted
Subsidiary's business or (2) result from the restructure, reorganization or
similar composition of trade account obligations which arose in the
ordinary course of business and which are owing to Company or such
Permitted Subsidiary from financially distressed debtors, and (b) are, in
each case, subject to the Lien in favor of Collateral Agent under the
Collateral Documents;
133
(xiv) Holdings, the Company and its Permitted Subsidiaries may make
and own Investments contemplated under subsection 7.7;
(xv) Company and its Subsidiaries may make and own Investments in
wholly-owned Permitted Domestic Subsidiaries of Company consisting of
intercompany Indebtedness of such Permitted Subsidiaries converted to
equity Investments, to the extent necessary to maintain the solvency in
accordance with applicable legal requirements of such Permitted Subsidiary,
provided that the underlying intercompany Indebtedness was permitted
--------
hereunder at the time of such conversion;
(xvi) Permitted Foreign Subsidiaries of Holdings may make and own
Investments in Foreign Cash Equivalents;
(xvii) Permitted Domestic Subsidiaries organized solely for the
purpose of facilitating a Permitted Acquisition or acquired pursuant to a
Permitted Acquisition may make and own Investments in Company and other
Permitted Domestic Subsidiaries solely for the purpose of facilitating such
Permitted Acquisition;
(xviii) Company and its Subsidiaries may make and own Investments in
Carlisle in the form of the contribution or transfer of Rental Equipment
from the Company or such Subsidiaries to Carlisle; provided, that such
--------
contribution or transfer is made subject to the lien and security interest
applicable thereto under and to the extent required by the Collateral
Documents;
(xix) Company and its Permitted Subsidiaries may make and own other
Investments (including Investments in Excluded Subsidiaries) in an
aggregate amount not to exceed at any time $25,000,000; and
(xx) Company and its Subsidiaries may make and own other Investments
in a Person or business in substantially the same line of business as the
Company and its Permitted Subsidiaries in an aggregate amount not to exceed
at any time an amount equal to the sum of (1) the lesser of (y) 50% of the
amount of Net Equity Proceeds (exclusive of any Net Equity Proceeds
referred to in subsection 2.4B(iii)(d)(C)(y)) and (z) the amount of such
Net Equity Proceeds that has not been applied to repay the Loans in
accordance with subsection 2.4B(iii)(d) (exclusive of any Net Equity
Proceeds referred to in subsection 2.4B(iii)(d)(C)(y)), plus (2) the amount
----
contributed to Company pursuant to subsection 2.4B(iii)(d)(C)(y).
7.4 Contingent Obligations.
----------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
134
(i) Subsidiaries of Holdings may become and remain liable with respect
to Contingent Obligations in respect of the Subsidiary Guaranty, and
Holdings may become and remain liable with respect to Contingent
Obligations in respect of the Holdings Guaranty;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to Contingent
Obligations under Hedge Agreements required under subsection 6.10 or
otherwise incurred in the ordinary course of business;
(iv) Company and its Subsidiaries and Transitory Subsidiaries may
become and remain liable with respect to Contingent Obligations in respect
of (a) customary indemnification and purchase price adjustment obligations
incurred in connection with the acquisition of property, Asset Sales or
other sales of assets, (b) endorsements of instruments for deposit or
collection in the ordinary course of business, and (c) standard contractual
indemnities entered into in the ordinary course of business and any of the
foregoing obligations may be incurred by Holdings in connection with a
Permitted Acquisition by or through a Transitory Subsidiary but only to the
extent that such obligations could have been incurred by Company with
respect to a Permitted Acquisition;
(v) Company and its Subsidiaries and Transitory Subsidiaries may
become and remain liable with respect to Contingent Obligations under
guarantees in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of Holdings and its
Subsidiaries;
(vi) Holdings and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
------------
hereto;
(vii) Holdings and the Subsidiary Guarantors may become and remain
liable with respect to Contingent Obligations arising under their
guaranties of the Senior Notes and the Second Priority Term Loans as are
required under the Senior Note Indenture and the Second Priority Term Loan
Credit Documents, respectively;
(viii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees of obligations
of any Subsidiary of Company under any worker's compensation self-insurance
program of such Subsidiary administered in accordance with applicable law
relating to worker's compensation;
(ix) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees by Holdings and
its Subsidiaries of Indebtedness,
135
leases and other contractual obligations permitted to be incurred by
Holdings or its Subsidiaries; and
(x) Company and its Subsidiaries and Transitory Subsidiaries may
become and remain liable with respect to Contingent Obligations not
otherwise permitted under this subsection; provided that the maximum
--------
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries and Transitory Subsidiaries in respect of all such Contingent
Obligations, together with the aggregate principal amount of Indebtedness
of Company and its Subsidiaries incurred pursuant to subsection 7.1(xv),
shall at no time exceed $30,000,000.
7.5 Restricted Junior Payments.
--------------------------
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that (i) any
--------
Subsidiary of Company may pay dividends to Company or a Subsidiary of Company;
(ii) Company may make regularly scheduled payments of principal and interest in
respect of the Senior Notes in accordance with the terms thereof; (iii) Company
may make Restricted Junior Payments to Holdings to the extent required for
Holdings to make, and Holdings may make, regularly scheduled payments of
interest in respect of the Shareholder Subordinated Notes in accordance with the
terms of, and only to the extent required by, and subject to the subordination
provisions contained in, such Shareholder Subordinated Notes, as applicable;
(iv) Holdings and Company may make or make distribution to Holdings to make
regularly scheduled principal and interest payments in respect of Permitted
Seller Notes to the extent permitted under subsection 7.1(viii) in accordance
with the terms of, and subject to the subordination provisions contained in,
such Permitted Seller Notes; (v) Holdings may pay regularly scheduled
distributions on the Preferred Units, Series B Preferred Units and Qualified
Preferred Units pursuant to the terms thereof solely through the issuance of
additional shares of such units, or by an increase in the liquidation preference
thereof; (vi) Company may exchange the Senior Notes as contemplated by the
Senior Note Indenture, and Holdings may exchange the Senior Discount Debentures
in accordance with the Senior Discount Indenture; (vii) Company may make
Restricted Junior Payments to Holdings and the General Partner, and Holdings may
make Restricted Junior Payments, (a) to the extent necessary to permit Holdings
to pay reasonable accounting, legal, SEC related, and similar fees and expenses
and fees, expenses and indemnities payments to directors or members of board of
managers of Holdings or the General Partner and (b) to the partners of Holdings
and the General Partner for Permitted Tax Distributions; (viii) so long as no
Potential Event of Default or Event of Default shall have occurred and be
continuing, Company may make Restricted Junior Payments to Holdings and the
General Partner, and Holdings and the General Partner may make Restricted Junior
Payments, to permit the payment of the ▇▇▇▇ Management Fees under the ▇▇▇▇
Advisory Services Agreement; (ix) Company may make Restricted Junior Payments to
Holdings and the General Partner to the extent required for Holdings and General
Partner to make, and Holdings may make, Restricted Junior Payments in an
aggregate amount not to exceed $3,000,000 in any Fiscal Year to the extent
necessary to make repurchases of Securities (and options or warrants to purchase
such Securities) of Holdings from employees (a) upon termination
136
(including by reason of death, disability or retirement) of such employees or
(b) pursuant to a contractual obligation of Holdings or any of its Subsidiaries;
provided that, such amount for any Fiscal Year shall be increased by an amount
--------
equal to the excess, if any, of such amount for the previous Fiscal Year (as
adjusted in accordance with this proviso) over the actual amount expended for
such previous Fiscal Year; provided further that, such amount shall be reduced
-------- -------
by the aggregate amount of all principal and interest payments made on any
Shareholder Subordinated Notes permitted under subsection 7.1(vii) in such
Fiscal Year; provided further that, such amount for any Fiscal Year shall be
-------- -------
increased by an amount equal to the proceeds of a substantially concurrent sale
for cash of Securities of Holdings or the Company; (x) Holdings or the Company
may make Restricted Junior Payments in connection with repurchases of equity
Securities deemed to occur upon the exercise of stock options if such Securities
represent a portion of the exercise price thereof; (xi) in the event that any
letter of intent or purchase agreement entered into pursuant to subsection
7.7(xi) is terminated and the Company or any Subsidiary is entitled to a
reimbursement of any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposit made by it in connection
therewith, the Company may make a Restricted Junior Payment to Holdings and the
General Partner, and Holdings may make a Restricted Junior Payment in an amount
not to exceed the amount of such reimbursement payment so long as no Event of
Default then exists; (xii) Holdings may issue Common Units to the holders of
Preferred Units or Series B Preferred Units upon conversion thereof; (xiii)
Holdings may acquire its equity Securities solely in exchange for other equity
Securities permitted to be issued hereunder; (xiv) the Company and its
Subsidiaries may make Restricted Junior Payments to Subsidiaries in connection
with any direct or indirect redemption, retirement or repurchase or other
acquisition for value of the equity securities of such Person; provided that any
--------
such repurchase or redemption shall be solely in exchange for non-cash
consideration permitted to be made under this Agreement; and (xv) Company may
make dividends to Holdings for the purpose of financing the cash portion of the
Acquisition consideration payable in connection with a Permitted Acquisition to
be consummated by or through a Transitory Subsidiary, provided that any amount
--------
of such dividend shall be applied in full immediately to pay such cash portion
of such Acquisition Consideration; provided, that, any Restricted Junior
--------
Payments by Company to Holdings permitted under this subsection shall be applied
by Holdings for the purposes specified in this subsection.
7.6 Financial Covenants.
-------------------
A. Minimum Interest Coverage Ratio. Holdings and Company shall not permit
the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest
Expense (excluding therefrom, for purposes of this subsection 7.6A only, the
---------
amount of any write-off or amortization of deferred financing costs, interest on
deferred compensation or payments made to obtain Interest Rate Agreements which
would otherwise be included in Consolidated Interest Expense) for any four-
Fiscal Quarter period (including any such four-quarter period commencing prior
to the Closing Date) ending during any of the periods set forth below to be less
than the correlative ratio indicated; provided that, for any measurement of
--------
Consolidated Interest Expense pursuant to this Subsection 7.6A made prior to the
completion of four Fiscal Quarters following the Closing Date, Consolidated
Interest Expense for the relevant Calculation Period shall equal the product of
(i) Consolidated Interest Expense for the period from the Closing Date
137
to the date of measurement multiplied by (ii) a fraction, the numerator of which
---------- --
is 365 and the denominator of which is the number of days during the period from
the Closing Date to the date of measurement
Minimum
Interest Coverage
Period Ratio
Closing Date - 6/30/99 1.4:1.0
7/1/99 and thereafter 1.5:1.0
B. Maximum Leverage Ratio. Holdings and Company shall not permit the
Leverage Ratio as of the last day of any Fiscal Quarter ending after the Closing
Date to exceed 5.1:1.0.
C. Maximum Revolver Leverage Ratio. Holdings and Company shall not permit
the Revolver Leverage Ratio as of the last day of any Fiscal Quarter ending
after the Closing Date to exceed 4.5:1.0.
D. Certain Calculations. With respect to any period during which a
Permitted Acquisition occurs, for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6 and in Section 2.4(B),
Consolidated Adjusted EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such New Business on a pro forma
basis (including (i) pro forma adjustments arising out of events which are
directly attributable to a specific transaction, are factually supportable and
are expected to have a continuing impact, in each case determined on a basis
consistent with Article 11 of Regulation S-X promulgated under the Securities
Act and as interpreted by the staff of the Securities and Exchange Commission as
of January 1, 1997, and (ii) cost savings resulting from head count reduction,
closure of facilities and similar restructuring charges whether (x) resulting
from decisions made by Company or (y) implemented by the management of the New
Business within the six-month period immediately preceding the closing of such
Permitted Acquisition (provided that the cost savings described in clause (y)
are supportable and quantifiable by the underlying accounting records of such
business), which pro forma adjustments shall be certified by the principal
financial officer or principal accounting officer of Company) using the
historical financial statements of the New Business so acquired or to be
acquired and the consolidated financial statements of Holdings and its
Subsidiaries which shall be reformulated (i) as if such Permitted Acquisition,
and any acquisitions which have been consummated during such period, and any
Indebtedness or other liabilities incurred or repaid in connection with any such
acquisition had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the of
the interest rates applicable to outstanding Loans as of the date of calculation
of such pro forma adjustments), and (ii) otherwise in conformity with certain
procedures to be agreed upon
138
between Administrative Agent and Company, all such calculations to be in form
and substance reasonably satisfactory to Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
----------------------------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to enter
into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
other than in the ordinary course of business, transfer or otherwise dispose of
(other than pursuant to a lease entered into in the ordinary course of
business), in one transaction or a series of transactions, all or any part of
its business, property or assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or substantially all the business, property
or fixed assets of, or stock or other evidence of beneficial ownership of, any
other Person or any division or line of business of any other Person, except:
(i) any Subsidiary of Company and Transitory Subsidiaries may be
merged with or into Company or any Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Company or any
Subsidiary Guarantor; provided that, in the case of such a merger involving
--------
Company, Company shall be the continuing or surviving corporation, and in
the case of any other such merger, such Subsidiary Guarantor shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures in the ordinary course of business;
(iii) Company and its Subsidiaries may dispose of obsolete,
uneconomical, negligible, worn out or surplus property (including
Intellectual Property) in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) subject to subsection 7.12, Company and its Subsidiaries may make
Asset Sales of assets having an aggregate fair market value not in excess
of $10,000,000; provided that (y) the consideration received for such
--------
assets shall be in an amount at least equal to the fair market value
thereof and (z) the proceeds of such Asset Sales shall be applied as
required by subsection 2.4B(iii)(a);
(vi) Company and its Subsidiaries may sell or discount, in each case
without recourse, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof;
provided that the aggregate amount of such accounts receivable
--------
139
sold pursuant to this clause (vi) shall not exceed in any Fiscal Year 10%
of the accounts receivable of Company and its Subsidiaries recorded for the
preceding Fiscal Year;
(vii) Company and its Subsidiaries may, in the ordinary course of
business, license as licensee or licensor patents, trademarks, copyrights
and know-how to or from third Persons, so long as any such license by
Company or any of its Subsidiaries in its capacity as licensor is permitted
to be assigned pursuant to the Collateral Documents (to the extent that a
security interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the granting of a Lien
by Company or any of its Subsidiaries pursuant to the Collateral Documents
in the Intellectual Property covered by such license;
(viii) Company and its Subsidiaries may dispose of any Excluded
Subsidiary or its assets;
(ix) Company and its Subsidiaries and Transitory Subsidiaries may sell
non-core businesses acquired in connection with Permitted Acquisitions;
(x) Holdings, Company and its Subsidiaries and Transitory
Subsidiaries may sell or dispose of Cash Equivalents and other investments
permitted under subsection 7.3;
(xi) Holdings, Company and its Subsidiaries and Transitory
Subsidiaries may enter into letters of intent and purchase agreements with
respect to proposed acquisitions so long as (a) any ▇▇▇▇ ▇▇▇▇▇▇▇ money
deposits required to be made by Holdings, the Company or its Subsidiaries
and Transitory Subsidiaries in connection therewith are funded solely with
new cash equity contributions to the Company and Transitory Subsidiaries,
(b) there shall be no recourse against Holdings, the Company or any of its
Subsidiaries and Transitory Subsidiaries in respect of such letters of
intent or purchase agreements other than against any such ▇▇▇▇ ▇▇▇▇▇▇▇
money deposits and (c) none of the Holdings, the Company nor any of its
Subsidiaries and Transitory Subsidiaries shall be permitted to consummate
any acquisition relating to such letter of intent or purchase agreement
without the prior written consent of the Administrative Agent which consent
may be withheld in Administrative Agent's reasonable discretion, except no
consent shall be required with respect to acquisitions made pursuant to
subdivision (xiii) of this Section 7.7);
(xii) Holdings and its Subsidiaries may convert (whether by merger,
acquisition or otherwise, including the establishment of new corporations
to do so) from limited partnerships to "C" corporations or limited
liability companies so long as the security interests granted to the
Administrative Agent for the benefit of the Lenders pursuant to the
Collateral Documents shall remain in full force and effect and perfected
(to at least the same extent as in effect immediately prior to such
conversion) and Holdings and Company comply with the provisions of
subsection 10.22;
140
(xiii) Company or any Permitted Subsidiary of Company or Transitory
Subsidiaries may make other acquisitions of assets and businesses
(including acquisitions of the capital stock or other equity interests of
another Person whether by merger or purchase) or Holdings may acquire the
capital stock of a Transitory Subsidiary provided that:
--------
(a) immediately prior to and after giving effect to any such
acquisition, Holdings, Company and its Subsidiaries shall be in
compliance with the provisions of subsection 7.13 hereof;
(b) if such acquisition is structured as a stock acquisition,
then either (A) the Person so acquired becomes a Permitted Subsidiary
of Company or a Transitory Subsidiary or (B) such Person is merged
with and into Company or a Permitted Subsidiary of Company or a
Transitory Subsidiary(with Company or such Permitted Subsidiary or
Transitory Subsidiary being the surviving corporation in such merger),
and in any case, all of the provisions of subsection 6.8 have been
complied with in respect of such Person;
(c) the only consideration paid in connection with such
acquisition shall consist of cash, Common Units, Qualified Preferred
Units or Permitted Seller Notes;
(d) (1) Company shall be in compliance, on a pro forma basis
giving effect to the proposed acquisition, with the covenants set
forth in subsection 7.6 hereof, and (2) no Event of Default or
Potential Event of Default shall have occurred and be continuing at
the time of such acquisition or shall be caused thereby; and Company
shall have delivered to Administrative Agent an Officer's Certificate
(together with supporting information therefor), in form and substance
reasonably satisfactory to Administrative Agent, certifying as to the
foregoing;
(e) with respect to any assets acquired pursuant to such
acquisition by a Loan Party such Loan Party shall have taken all steps
necessary to establish and create a First Priority Lien in favor of
Collateral Agent on behalf of Lenders pursuant to, and to the extent
required by, this Agreement and the Collateral Documents;
(f) the aggregate Acquisition Consideration paid by Company or
any such Subsidiary in any such acquisition does not exceed
$50,000,000; and
(g) Administrative Agent shall have received the following
information with regard to the Permitted Acquisition at least ten (10)
Business Days (or at such later date as such information first becomes
available) prior to the consummation thereof: (y) summary information
prepared by Company describing the nature of the business or Person to
be acquired, the current draft of the acquisition agreement and
historical financial statements with respect to the business or Person
to be acquired as delivered to the
141
Company; and (z) pro forma financial statements for Company and its
Subsidiaries for the immediately preceding and following four-fiscal
quarter period demonstrating compliance on a pro forma basis with the
financial covenants applicable during such periods pursuant to
subsection 7.6 and adjustments made to the Borrowing Base Amount in
accordance with Schedule 1.1(i).
---------------
(xiv) any Permitted Foreign Subsidiary of Company may be merged with
or into any wholly-owned Permitted Foreign Subsidiary, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to any wholly-owned
Permitted Foreign Subsidiary; provided that (i) in the case of such a
--------
merger, such wholly-owned Permitted Foreign Subsidiary shall be the
continuing or surviving corporation and (ii) in each case, the stock of
such wholly-owned Permitted Foreign Subsidiary is pledged pursuant to, and
to the extent required under, the Collateral Documents;
(xv) Holdings or its Subsidiaries may sell or issue equity interests
of the Company or any of its Subsidiaries to Holdings, the General Partner
or any of their Subsidiaries;
(xvi) Company and its Permitted Subsidiaries may make Investments
pursuant to subsection 7.3;
(xvii) Holdings may issue Common Units, the Preferred Units, the
Series B Preferred Units and Qualified Preferred Units to the extent not
otherwise prohibited under the provisions of this Agreement;
(xviii) Holdings, Company and its Permitted Subsidiaries may
consummate the 1999 Acquisitions; and
(xix) Holdings and Transitory Subsidiaries may sell, transfer or
otherwise dispose of all or any part of its business, property or assets to
Company or a Permitted Subsidiary (other than a Transitory Subsidiary).
7.8 Fiscal Year
-----------
Holdings and Company shall not change their Fiscal Year-end from December
31.
7.9 Sales and Lease-Backs.
---------------------
Except with respect to Permitted Sale Leaseback Transactions, Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any property
142
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
which Company or any of its Subsidiaries has sold or transferred or is to sell
or transfer to any other Person (other than Holdings or any of its Subsidiaries)
or (ii) which Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Company or any of its Subsidiaries to any Person (other
than Holdings or any of its Subsidiaries) in connection with such lease.
7.10 Sale or Discount of Receivables.
-------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
provided, however, that Company and its Subsidiaries may, in the exercise of
-------- -------
their reasonable business judgment in connection with efforts to collect amounts
owed thereunder, discount or sell (to the extent permitted under subsection 7.7)
for less than the face value thereof any accounts receivable.
7.11 Transactions with Shareholders and Affiliates.
---------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided that the foregoing restriction shall not apply to (i) any
--------
transaction between Holdings and any of its Subsidiaries or between any of its
Subsidiaries, (ii) any payment from Company to Holdings and the General Partner
expressly permitted under subsection 7.5 and any payment by Holdings permitted
under subsection 7.5, (iii) the payment of ▇▇▇▇ Management Fees under the ▇▇▇▇
Advisory Services Agreement, (iv) any employment agreement entered into by
Holdings or any of its Subsidiaries in the ordinary course of business, (v) any
issuance of Common Units or Preferred Units or Series B Preferred Units or
Qualified Preferred Units in connection with employment arrangements, stock
options and stock ownership plans of Holdings or any of its Subsidiaries entered
into in the ordinary course of business and the performance of obligations
thereunder, (vi) performance of obligations under the Recapitalization
Agreement, (vii) performance of obligations under the Related Agreements, (viii)
reasonable and customary fees, expenses and indemnities paid to members of the
Boards of Directors or Board of Managers, as the case may be, of Holdings and
its Subsidiaries and (ix) transactions described in Schedule 7.11 annexed
-------------
hereto.
7.12 Disposal of Subsidiary Interests.
--------------------------------
Except as required under the Collateral Documents and except for any sale
of 100% of the capital stock, partnership interests or other equity Securities
of any of its Subsidiaries in compliance with the provisions of subsection 7.7,
Holdings shall not:
143
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock, partnership interests or other
equity Securities of any of its directly owned Subsidiaries, except to
qualify directors if required by applicable law or to another Subsidiary of
Holdings; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock, partnership interests or other equity Securities of any of its
Subsidiaries (including such Subsidiary), except to Company, another
Subsidiary of Holdings (subject to the restrictions on such disposition
otherwise imposed herein under), or to qualify directors if required by
applicable law.
7.13 Conduct of Business.
-------------------
From and after the Effective Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and its Subsidiaries on the Effective Date (after giving
effect to the 1999 Acquisitions) and similar or related or supportive businesses
and (ii) such other lines of business as may be consented to by Requisite
Lenders. From and after the Effective Date, neither Holdings nor General
Partner shall engage in any business or have any assets (including Intellectual
Property) other than (i) owning partnership interests of Company or equity
interests of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Capital Corporation or any other Subsidiary
of Holdings, (ii) the issuance of and activities related to the maintenance and
servicing of Shareholder Subordinated Notes (or similar notes in the case of the
General Partner), Permitted Seller Notes, the Senior Discount Debentures, other
debt and guaranty obligations permitted to be incurred hereunder and the
partnership or equivalent equity interests of Holdings (or the General Partner)
as permitted hereunder, (iii) the entering into, and the performance of its
obligations under, the Pledge and Security Agreement, the Related Agreements and
the Second Priority Term Loan Credit Documents to which it is a party to which
it is a party, (iv) the receipt of Cash distributions from Company in accordance
with the provisions hereof, (v) activities associated with expenses paid with
any dividends paid to Holdings or the General Partner which are permitted under
subsection 7.5; (vi) the acquisition of assets pursuant to the Carlisle
Acquisition which shall be promptly transferred to the Company or its Permitted
Subsidiaries, (vii) the entering into and performance of its obligations in
connection with Permitted Acquisitions and (viii) holding intercompany loans
owed to it. From after the Effective Date, Company and Holdings shall not permit
▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Capital Corporation and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
to engage in any activities other than entering into and the performance of
their obligations under the Pledge and Security Agreement, the Related
Agreements and the Second Priority Term Loan Credit Documents and the Subsidiary
Guaranty to which it is a party. Notwithstanding the foregoing, Holdings and the
General Partner (and the corporations referred to in the immediately preceding
sentence) may engage in activities incidental to (a) the maintenance of its
existence in compliance with applicable law, (b) legal, tax and accounting
matters in connection with any of the foregoing activities and (c) entering
into, and performing its obligations under, this Agreement, the Related
Agreements and the Second Priority Term Loan Credit Documents and the Loan
Documents to which it
144
is a party. Neither Company nor Holdings shall create or permit to exist any
Subsidiary other than Permitted Subsidiaries and Excluded Subsidiaries.
7.14 Amendments of Documents Relating to Subordinated Indebtedness and Senior
------------------------------------------------------------------------
Notes; Amendments of Term Loan Credit Documents.
-----------------------------------------------
A. Amendments or Waivers of Certain Agreements. None of Holdings, Company
nor any of their respective Subsidiaries will agree to any amendment to, or
waive any of its rights under, any Related Agreement (other than any Related
Agreement evidencing or governing any Subordinated Indebtedness) after the
Effective Date if any such amendment or waiver would, individually or in the
aggregate, reasonably be expected to be materially adverse to Lenders without in
each case obtaining the prior written consent of Requisite Lenders to such
amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness and
Senior Notes. Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, amend or otherwise change the terms of any
Subordinated Indebtedness, or make any payment consistent with an amendment
thereof or change thereto, if the effect of such amendment or change is to
increase the interest rate on such Subordinated Indebtedness, change (to earlier
dates) any dates upon which payments of principal or interest are due thereon,
change any event of default or condition to an event of default with respect
thereto (other than to eliminate any such event of default or increase any grace
period related thereto), change the redemption, prepayment or defeasance
provisions thereof, change the subordination provisions of such Subordinated
Indebtedness or any guaranty of any Subordinated Indebtedness), or if the effect
of such amendment or change, together with all other amendments or changes made,
is to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or a
trustee or other representative on their behalf) which would be materially
adverse to Holdings, Company or Lenders.
C. Amendments of Second Priority Term Loan Credit Documents. Holdings and
Company shall not, and shall not permit any of their respective Subsidiaries to,
amend or otherwise change the terms of any of the Second Priority Term Loan
Credit Documents, or make any payment consistent with an amendment thereof or a
change thereto, that would have the effect of (i) changing (to earlier dates)
any dates upon which payments of principal or interest are due on the Second
Priority Term Loans, (ii) reducing the percentage specified in the definition of
"Requisite Lenders" in the Second Priority Term Loan Credit Agreement, or (iii)
changing the prepayment provisions of the Second Priority Term Loan Credit
Agreement in a manner that disproportionately disadvantages the Lenders relative
to the lenders under the Second Priority Term Loan Credit Agreement or confers
additional rights on the lenders under the Second Priority Term Loan Credit
Agreement which would be adverse to Lenders, without the prior written consent
of Requisite Lenders under this Agreement.
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SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
8.1 Failure to Make Payments When Due.
---------------------------------
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within three Business
Days after the date due; or
8.2 Default in Other Agreements.
---------------------------
(i) Failure of Holdings or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
---------------------------
Failure of Holdings or Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement;
provided, however, that such failure with respect to the covenants contained in
subsections 7.1, 7.2, 7.3 and 7.4 shall not constitute an Event of Default for
ten days after such failure so long as Company is diligently pursuing the cure
of such failure; or
8.4 Breach of Warranty.
------------------
Any representation, warranty, certification or other statement made by any
Loan Party in any Loan Document or in any statement or certificate at any time
given by any Loan Party in writing pursuant hereto
146
or thereto or in connection herewith or therewith shall be false in any material
respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Holdings, Company or such Loan Party becoming aware of such
default or (ii) receipt by Holdings, Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Holdings or any of its Subsidiaries (other than Excluded
Subsidiaries), or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) for all or a substantial part of
its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings or any
of its Subsidiaries (other than Excluded Subsidiaries), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
--------------------------------------------------
(i) Holdings or any of its Subsidiaries (other than Excluded Subsidiaries)
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Holdings or
any of its Subsidiaries (other than Excluded Subsidiaries) shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or
147
any of its Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $10,000,000 (in either case
not adequately covered by insurance from a solvent and unaffiliated insurance
company) shall be entered or filed against Holdings or any of its Subsidiaries
or any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
8.9 Dissolution.
-----------
Any order, judgment or decree shall be entered against Holdings or any of
its Subsidiaries (other than an Excluded Subsidiary) decreeing the dissolution
or split up of Holdings or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
8.10 Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Holdings or any of its Subsidiaries in excess of $7,500,000 during the term of
this Agreement; or
8.11 Change in Control.
-----------------
(i) Holdings and its wholly-owned Subsidiaries shall cease to own and
control 100% of the limited partnership interests of Company, or General Partner
shall cease to own and control 100% of the general partnership interests of
Company; (ii) prior to an initial public offering by Holdings (or any successor
pursuant to subsection 10.22,) (x) ▇▇▇▇ Investors and their Related Parties
shall cease, directly or indirectly, to have the right to elect or appoint a
majority of the Board of Managers of the General Partner if Holdings is a
limited partnership or the Board of Directors of Holdings if Holdings has become
a "C" corporation in accordance with the terms hereof, in either case through
stock or membership ownership, voting agreement or otherwise or (y) for so long
as Holdings is a partnership, the occurrence of any transaction which results in
the General Partner no longer being the sole general partner of Holdings; (iii)
▇▇▇▇ Investors and their Related Parties shall cease to beneficially own,
directly or indirectly, 71% of the economic interests of Holdings or General
Partner owned by ▇▇▇▇ Investors and their Related Parties on Closing Date; (iv)
after an initial public offering of Holdings (or any successor thereto pursuant
to subsection 10.22,) any Person (other than ▇▇▇▇ Investors and their Related
Parties) shall (y) have a greater economic or voting interest in Holdings or
General Partner (or any successor thereto pursuant to subsection 10.22) than
▇▇▇▇ Investors' and their Related Parties' economic or voting interest in
Holdings (or any successor thereto
148
pursuant to subsection 10.22), or (z) own or control more than 30% of the
economic or voting interest of Holdings (or any successor thereto pursuant to
subsection 10.22); or (v) any "Change of Control" shall occur under the Senior
Notes; or
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations.
-------------------------------------------------------------------------
At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable), shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Collateral Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered and required to be perfected thereby having a fair market value,
individually or in the aggregate, exceeding $4,000,000, in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Holdings and Company, and the obligation of each Lender to make any
Loan, the obligation of Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iv).
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Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Holdings or Company, and such provisions,
shall not at any time be construed so as to grant Holdings or Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
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A. Appointment of Agents. GSCP is hereby appointed Lead Arranger and
Syndication Agent hereunder, and each Lender hereby authorizes the Lead Arranger
and the Syndication Agent each to act as its agent in accordance with the terms
of this Agreement and the other Loan Documents. Fleet is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. DLJ is hereby
appointed Documentation Agent hereunder and under the other Loan Documents and
each Lender hereby authorizes Documentation Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
Lender hereby authorizes and confirms the appointment by Administrative Agent of
Fleet as Collateral Agent under the Intercreditor Agreement and the other Loan
Documents, and each Lender hereby authorizes Collateral Agent to act as its
agent in accordance with the terms of the Intercreditor Agreement and the other
Loan Documents. Each Agent hereby agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of Agents and Lenders
and Company shall have no rights as a third party beneficiary of any of the
provisions
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thereof. In performing its functions and duties under this Agreement, each
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Holdings or any of its Subsidiaries. Each of Lead Arranger,
Syndication Agent and Documentation Agent, without consent of or notice to any
party hereto, may assign any and all of its rights or obligations hereunder to
any of its Affiliates. As of the date on which Syndication Agent notifies
Company that it has concluded its primary syndication of the Loans and
Commitments, all obligations of GSCP, in its capacity as Syndication Agent
hereunder (other than pursuant to Section 2.1A(v)), shall terminate. Neither
GSCP, in its capacity as Lead Arranger, nor DLJ, in its capacity as
Documentation Agent, shall have any obligations hereunder.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Collateral Agent deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that Collateral Agent appoint an additional
individual or institution as a separate trustee, co-trustee, collateral agent or
collateral co-agent (any such additional individual or institution being
referred to herein individually as a "Supplemental Collateral Agent" and
collectively as "Supplemental Collateral Agents").
In the event that Collateral Agent appoints a Supplemental Collateral Agent
with respect to any Collateral, (i) each and every right, power, privilege or
duty expressed or intended by this Agreement or any of the other Loan Documents
to be exercised by or vested in or conveyed to Collateral Agent with respect to
such Collateral shall be exercisable by and vest in such Supplemental Collateral
Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Administrative Agent
or such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of subsections 10.2 and 10.3 that refer to Collateral Agent shall inure to
the benefit of such Supplemental Collateral Agent and all references therein to
Administrative Agent shall be deemed to be references to Collateral Agent and/or
such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Holdings, Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Collateral Agent for more fully and certainly vesting in and confirming to him
or it such rights, powers, privileges and duties, Holdings or Company shall, or
shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such
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Supplemental Collateral Agent, to the extent permitted by law, shall vest in and
be exercised by Collateral Agent until the appointment of a new Supplemental
Collateral Agent.
9.2 Powers and Duties; General Immunity.
-----------------------------------
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of
Holdings or Company to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Holdings or Company or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. Exculpatory Provisions. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent, in the case of any Agent other than the Administrative
Agent, shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) or, in the case of the Administrative Agent, in
accordance
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with the Intercreditor Agreement, and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be) or in accordance
with the Intercreditor Agreement, as the case may be, such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Holdings and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents, in the case of any Agent other than the
Administrative Agent, in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
subsection 10.6) or, in the case of the Administrative Agent, in accordance with
the Intercreditor Agreement.
D. Agent Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Holdings, Company or any of their
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Holdings and Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
------------------------------------------------------------------
Creditworthiness.
----------------
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
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9.4 Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company or Holdings, 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 which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its capacity
as such Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that arise from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided that in no event shall this sentence require any Lender to
--------
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided, further, that this sentence shall not be
deemed to require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement described in the proviso to the immediately preceding sentence.
9.5 Successor Administrative Agent and Swing Line Lender.
----------------------------------------------------
A. Successor Administrative Agent. Administrative Agent may resign at any
time by giving 30 days' prior written notice thereof to Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent with the consent of Company (which consent shall not be unreasonably
withheld). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Fleet or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall,
upon its acceptance of such appointment, become the successor Swing Line
Lender for all purposes hereunder. In such event (i) Company shall prepay any
outstanding Swing Line Loans made by the retiring
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or removed Agent in its capacity as Swing Line Lender, (ii) upon such
prepayment, the retiring or removed Administrative Agent and Swing Line Lender
shall surrender any Swing Line Note held by it to Company for cancellation,
and (iii) if so requested by the successor Administrative Agent and Swing Line
Lender in accordance with subsection 2.1E, Company shall issue a new Swing
Line Note to the successor Administrative Agent and Swing Line Lender
substantially in the form of Exhibit VIII annexed hereto, in the principal
------------
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
C. Administrative Agent under Term Loan Credit Agreement. Any resignation
or removal of Administrative Agent pursuant to subsection 9.5A shall also
constitute the resignation or removal of Fleet for all purposes hereunder and
under the Term Loan Credit Agreement.
9.6 Collateral Documents and Guaranty.
---------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement, and
each Lender agrees to be bound by the terms of the Intercreditor Agreement;
provided that Administrative Agent shall not enter into or consent to any
--------
material amendment, modification, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6). Each
Lender hereby further authorizes Collateral Agent (and under the terms of the
Intercreditor Agreement Collateral Agent is authorized), on behalf of and for
the benefit of Lenders, to enter into each Collateral Document as secured party
and to be the agent for and representative of the Lenders under the Guaranties,
and each Lender agrees to be bound by the terms of each Collateral Document and
each Guaranty; provided that Collateral Agent shall not enter into or consent to
--------
any material amendment, modification, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6); provided
--------
further, however, that, without further written consent or authorization from
------- -------
Lenders, Collateral Agent may execute any documents or instruments necessary to
(a) release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or as permitted
or required under the Intercreditor Agreement or the Collateral Documents or to
which Requisite Lenders (or such other Lenders as may be required to give such
consent under subsection 10.6) have otherwise consented or (b) release any
Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital stock of
such Subsidiary Guarantor is sold to any Person pursuant to a sale or other
disposition permitted hereunder or as permitted under the Intercreditor
Agreement or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under subsection 10.6) have otherwise consented;
provided, however, that nothing in this subsection shall require consent to
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release from the Subsidiary Guaranty any Person which, immediately after such
sale, shall be a Subsidiary of Holdings which is obligated to and will enter
into the Subsidiary Guaranty. Anything contained in any of the Loan Documents
to the contrary notwithstanding, Company, Administrative Agent, Collateral Agent
and each Lender hereby agree that (X) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce the Subsidiary Guaranty, it being understood and
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agreed that all powers, rights and remedies under the Collateral Documents and
the Guaranties may be exercised solely by Collateral Agent for the benefit of
Secured Parties in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Secured Party may be the purchaser of any
or all of such Collateral at any such sale and Collateral Agent, as agent for
and representative of Secured Parties (but not any Secured Party or Secured
Parties in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
--------------------------------------------------------------
A. General. Subject to subsection 10.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or its Letters of Credit or participations therein or
any other interest herein or in any other Obligations owed to it; provided that
--------
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
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such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii); provided, further
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that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation; and provided, further that, anything
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contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
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B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be
assigned in any amount to another Lender, or to an Affiliate or Approved
Fund of the assigning Lender or another Lender, with the giving of notice
to Company and Administrative Agent, or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the assigning
Lender and its Affiliates) to any other Eligible Assignee with the consent
of Company and Administrative Agent (which consent of Company and
Administrative Agent shall not be unreasonably withheld or delayed);
provided that, unless otherwise agreed to in writing by Company and
--------
Administrative Agent or unless such assignment is for the assigning
Lender's entire interest hereunder and under the other Loan Documents, the
assigning Lender shall have, immediately after giving effect to such
assignment, not less than an aggregate amount of $5,000,000 in
Commitments, Loans and Letter of Credit; and provided further, however,
-------- ------- -------
that (x) upon the occurrence and during the continuance of an Event of
Default, or (y) in the case of assignments by GSCP, Fleet or DLJ,
assignments may be made without the consent of Company or Administrative
Agent, upon the giving of notice to Company and Administrative Agent. To
the extent of any such assignment in accordance with either clause (a) or
(b) above, the assigning Lender shall be relieved of its obligations with
respect to its Commitments, Loans, Letters of Credit or participations
therein, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and recordation fee of
$500 in the case of assignments pursuant to clause (a) above and
assignments by GSCP, Fleet or DLJ and $2000 in the case of all other
assignments and such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Administrative Agent and the Company pursuant to subsection 2.7B(iii)(a).
Upon such execution, delivery, acceptance and recordation, from and after
the effective date specified in such Assignment Agreement, (y) the
assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, relinquish its rights (other than any rights
which survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement (and, in the
case of an Assignment Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto; provided that, anything contained
--------
in any of the Loan Documents to the contrary notwithstanding, if such
Lender is the Issuing Lender with respect to any outstanding Letters of
Credit such Lender shall continue to have all rights and obligations of an
Issuing Lender with respect to such Letters of Credit until the
cancellation or expiration of such Letters of Credit and the reimbursement
of any amounts drawn
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thereunder). The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such assigning
Lender and, if any such assignment occurs after the issuance of any Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lenders in accordance with Subsection 2.1E, be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit IV or Exhibit V annexed hereto, as the case may be, with
---------- ---------
appropriate insertions, to reflect the new Commitments, as the case may
be, of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
-------------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together with
the processing and recordation fee referred to in subsection 10.1B(i) and
any forms, certificates or other evidence with respect to United States
federal income tax withholding matters that such assignee may be required
to deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has and Company have
consented to the assignment evidenced thereby (in each case to the extent
such consent is required pursuant to subsection 10.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of
any Loan allocated to such participation (ii) a reduction of the principal
amount of or the rate of interest or fees payable on any Loan allocated to
such participation, and all amounts payable by Company hereunder (including
amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) or
(iii) a release of all or substantially all of the Collateral. Company and
each Lender hereby acknowledge and agree that, solely for purposes of
subsections 10.4 and 10.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. Assignments to Federal Reserve Banks and Fund Trustees. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 10.1, any Lender may assign and pledge all or any portion
of its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and with the consent of Company and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to such trustee;
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provided that (i) no Lender shall, as between Company and such Lender, be
--------
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank or trustee be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (a) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the Loans; and
(iii) that it will make its Loans for its own account in the ordinary course of
its business and without a view to distribution of such Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 Expenses.
---------
Whether or not the transactions contemplated hereby are consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments
(requested by or for the benefit of Company), waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Lead Arranger and Syndication
Agent (in each case including allocated costs of internal counsel) in connection
with the negotiation, preparation and execution of the Loan Documents and of the
Administrative Agent in connection with any consents, amendments (requested by
or for the benefit of Company), waivers or other modifications thereto and any
other documents or matters requested by Company; (iv) all the reasonable costs
and reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Agents and to Administrative Agent and of counsel providing any
opinions that Agents, Administrative Agent or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto; (v)
all the reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
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environmental or other consultants, advisors and agents employed or retained by
Administrative Agent and its counsel) of obtaining and reviewing any appraisals
provided for under subsection 6.9C, any environmental audits or reports provided
for under subsection 4.2S or 6.9B(ix) and any audits or reports provided for
under subsection 6.5B with respect to Inventory and accounts receivable of
Holdings and its Subsidiaries; (vi) all the reasonable costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
consultants, advisors and agents employed or retained by Administrative Agent
and its counsel) in connection with the administration of the Loan Documents,
and the custody or preservation of any of the Collateral as may separately be
agreed to between the Administrative Agent, Collateral Agent and Company; (vii)
all other reasonable costs and expenses incurred by any of the Agents in
connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments
(requested by or for the benefit of Company), waivers or other modifications
thereto and the transactions contemplated thereby; and (viii) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by any of the Agents and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Loan Documents by reason of such Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranties) or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3 Indemnity.
----------
In addition to the payment of expenses pursuant to subsection 10.2, whether
or not the transactions contemplated hereby are consummated, Company agrees to
defend (subject to Indemnitees' selection of counsel), indemnify, pay and hold
harmless Agents and Lenders, and the officers, partners, directors, trustees,
employees, agents and affiliates of any of Agents and Lenders (collectively
called the "Indemnitees"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Company shall not have any obligation to
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any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence, bad faith
or willful misconduct of that Indemnitee as determined by a final, non-
appealable judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
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based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the Related Agreements transactions contemplated
hereby or thereby (including Lenders' agreement to make the Loans hereunder or
the use or intended use of the proceeds thereof or the issuance of Letters of
Credit hereunder or the use or intended use of any thereof, or any enforcement
of any of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranties)),
(ii) the statements contained in the commitment letter executed by such Lender
and the Company with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Holdings or any of its Subsidiaries. Notwithstanding the foregoing, no Lender
other than an Existing Lender shall have any entitlement for indemnification
pursuant to this Section 10.3 with respect to any claim based upon a breach of a
------------
representation or warranty under any of subsections 5.2E.(i) through (iii) or
5.17B. of this Agreement.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time subject to the consent of Administrative Agent,
without notice to Company or to any other Person (other than Administrative
Agent), any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts or payroll accounts) and any other Indebtedness
at any time held or owing by that Lender to or for the credit or the account of
Company against and on account of the obligations and liabilities of Company
which are then due and payable to that Lender under this Agreement, the Letters
of Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not that Lender shall have made any demand
hereunder which are then due and payable. Company hereby further grants to
Administrative Agent, Collateral Agent and each Lender a security interest in
all deposits and accounts maintained with Administrative Agent or such Lender as
security for the Obligations.
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Company, the Lenders, the Administrative Agent and Collateral Agent hereby
acknowledge and agree that the provisions of this subsection 10.4 are subject to
the provisions of the Intercreditor Agreement. To the extent that any Lender is
required pursuant to the provisions of the Intercreditor Agreement to turn over
to the Administrative Agent any payments otherwise subject to the provisions of
this subsection 10.4, such payments shall not be subject to the provisions of
this subsection 10.4.
10.5 Ratable Sharing.
---------------
Lenders hereby agree among themselves that if any of them shall, whether by
voluntary payment (other than a voluntary prepayment of Loans made and applied
in accordance with the terms of this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder or
under the other Loan Documents (collectively, the "Aggregate Amounts Due" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Administrative
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided that, if all or part of such proportionately greater payment
--------
received by such purchasing Lender is thereafter recovered from such Lender upon
the bankruptcy or reorganization of Company or otherwise, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.5 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Administrative
Agent any payments otherwise subject to the provisions of this subsection 10.5,
such payments shall not be subject to the provisions of this subsection 10.5.
10.6 Amendments and Waivers.
-----------------------
A. No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective without the
162
written concurrence of Requisite Lenders; provided that no such amendment,
--------
modification, termination, waiver or consent shall, without the consent of each
Lender (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or waive or
reduce or postpone any scheduled repayment (but not prepayment) of any Loan or
Note or extend the stated expiration date of any Letter of Credit beyond the
Revolving Loan Commitment Termination Date, or reduce the rate of interest on
any Loan (other than any waiver of any increase in the interest rate applicable
to any Loan pursuant to subsection 2.2E; it being understood that modification
of the financial definitions herein shall not constitute a reduction of the rate
of interest for the purposes of this subsection 10.6) or any commitment fees or
letter of credit fees payable hereunder, or extend the time for payment of any
such interest or fees, or reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit, (ii) amend, modify,
terminate or waive any provision of this subsection 10.6, (iii) reduce the
percentage specified in the definition of "Requisite Lenders" or "Pro Rata
Shares" (it being understood that, with the consent of Requisite Lenders,
(except that such consent shall not be required in the case of increased amounts
under Subsection 2.1.A.(v) of this Agreement) additional extensions of credit
pursuant to this Agreement may be included in the determination of "Requisite
Lenders" or "Pro Rata Shares" on substantially the same basis as the Term Loan
Commitments, the Term Loans, the Revolving Loan Commitments and the Revolving
Loans are included on the Effective Date), (iv) release or otherwise subordinate
all or all or substantially all of the Collateral or Holdings or General Partner
from the Holdings Guaranty or all or substantially all of the Subsidiary
Guarantors from the Subsidiary Guaranty except as expressly provided in the Loan
Documents, or (v) consent to the assignment or transfer by Company of any of its
rights and obligations under this Agreement; provided, further that no such
-------- -------
amendment, modification, termination or waiver shall (1) increase the
Commitments of any Lender over the amount thereof then in effect, or extend the
duration thereof, without the consent of such Lender (it being understood that
no amendment, modification or waiver of any condition precedent, covenant,
Potential Event of Default or Event of Default shall constitute an increase or
extension in the Commitment of any Lender, and that no increase in the available
portion of any Commitment of any Lender shall constitute an increase in such
Commitment of such Lender); (2) amend, modify, terminate or waive any provision
of subsection 2.1A(iv) or any other provision of this Agreement relating to the
Swing Line Loan Commitment or the Swing Line Loans without the consent of Swing
Line Lender; (3) amend, modify, terminate or waive any obligation of Lenders
relating to the purchase of participations in Letters of Credit as provided in
subsection 3.1C without the written concurrence of Administrative Agent and of
each Issuing Lender which has a Letter of Credit then outstanding or which has
not been reimbursed for a drawing under a Letter of Credit issued it; (4) amend,
modify, terminate or waive any provision of Section 9 or 10 as the same applies
to any Agent (including the Administrative Agent), or any other provision of
this Agreement as the same applies to the rights or obligations of any Agent
(including the Administrative Agent), in each case without the consent of such
Agent (including the Administrative Agent); (5) reduce the percentage specified
in the definition of "Requisite Class Lenders" without the consent of Requisite
Class Lenders of each Class; provided, with the consent of the applicable
Requisite Lenders, additional extensions of credit pursuant hereto may be
included in the determination of Requisite Class Lenders on substantially the
same basis as the Term Loans, the Term Loan Commitments, the Revolving Loans
Commitments and the Revolving Loans are included on the Effective Date or (6)
alter the required application of repayment or prepayment
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as between Classes pursuant to Section 2.4B(iv)(b) without the consent of
Requisite Class Lenders of each Class being allocated a less repayment or
prepayment as a result thereof; provided, Requisite Lenders may waive, in whole
--------
or in part, any prepayment so long as the application, as between Classes, of
any portion of such prepayment which is still required to be made is not
altered.
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.
10.7 Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
--------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
--------
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Holdings, Company and Administrative Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to
Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
-------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company and Holdings set forth in subsections 2.6D,
2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the
164
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
------------------------------------------------------
No failure or delay on the part of Administrative Agent or Collateral Agent
or any Lender in the exercise of any power, right or privilege hereunder or
under any other Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 Marshalling; Payments Set Aside.
--------------------------------
None of Administrative Agent, Collateral Agent or any Lender shall be under
any obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent, Collateral Agent,
or Lenders (or to Administrative Agent or Collateral Agent for the benefit of
Lenders), or Administrative Agent, Collateral Agent or Lenders enforce any
security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 Severability.
-------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
-----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be
165
entitled to protect and enforce its rights arising out of this Agreement and it
shall not be necessary for any other Lender to be joined as an additional party
in any proceeding for such purpose.
10.14 Headings.
---------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 Applicable Law.
---------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
-----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Holdings' nor Company's rights or obligations hereunder nor any interest therein
may be assigned or delegated by Holdings or Company without the prior written
consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
-----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR HOLDINGS ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY AND HOLDINGS, FOR THEMSELVES AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
166
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO HOLDINGS AND COMPANY AT THEIR ADDRESSES PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
10.18 Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that
each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future
dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
167
TO THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
10.19 Confidentiality.
----------------
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by Company and Holdings that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participations therein
or by any direct or indirect contractual counterparties (or the professional
advisors thereto) in swap agreements (provided that such counterparties and
--------
advisors are advised of and agree to be bound by the provisions of this
subsection 10.19) or disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
--------
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
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 or any of
its Subsidiaries.
10.20 Counterparts; Effectiveness.
----------------------------
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by Requisite Lenders (under and as defined in the Existing
Credit Agreement), Agents, each New Lender, Company and Holdings and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
It is the intention of each of the parties hereto that the Existing Credit
Agreement be amended and restated so as to preserve the perfection and priority
of all security interests securing indebtedness and obligations under the
Existing Credit Agreement and the other Loan Documents and that all indebtedness
and obligations of Company and its Subsidiaries hereunder and thereunder shall
be secured by the Collateral Documents and that this Agreement shall not
constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or be deemed to evidence or constitute repayment of
all or any portion of any such obligations or liabilities. The parties hereto
further acknowledge and agree that this Agreement constitutes an amendment of
the Existing Credit Agreement made under and in accordance with the terms of
subsection 10.6 thereof.
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10.21 Limitation on Liability of General Partner.
-------------------------------------------
Except as set forth in the Holdings Guaranty, the Obligations shall be
nonrecourse to General Partner, except to the extent of its partnership
interests in Company and Holdings. Any liability of General Partner in respect
of the Obligations shall be specifically limited to the interests of General
Partner and in its partnership interests in Company and Holdings, and no other
assets of General Partner shall be subject to any claims as a result hereof.
Except as set forth herein or in the Loan Documents, each Lender acknowledges
and agrees that no director, officer, employee, incorporator, stockholder or
limited partner of the Company, as such, shall have any liability for any
obligations of Company or for any claim based on, in respect of, or by reason
of, such obligations or their creation.
10.22 "C" Corporation Conversion.
--------------------------
Upon not less than thirty (30) days prior written notice from Company to
Lenders, provided no Potential Event of Default or Event of Default shall have
then occurred and be continuing, Administrative Agent, Requisite Lenders and the
other Loan Parties shall take all actions, including, without limitation, the
execution and delivery of necessary amendments, modifications and supplements to
this Agreement and the other Loan Documents, as may reasonably be necessary in
order to facilitate the conversion of Holdings or Company from a limited
liability partnership structure to a corporate structure classified as a "C"
corporation under the Internal Revenue Code and to give effect to the intent of
this Agreement and the other Loan Documents after consummation of any such
conversion. Administrative Agent shall be entitled to reimbursement by Company
of its reasonable fees and expenses incurred in connection therewith and at all
times on and after any such conversion the First Priority Lien in the Collateral
shall remain in full force and effect.
[Remainder of page intentionally left blank]
169
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ACR Management LLC
as its general partner
By: _________________________________
Name:
Title:
HOLDINGS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By: ACR Management LLC
as its general partner
By: _________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ Capital, Inc.
Two ▇▇▇▇▇▇ Place
Boston, MA 02116
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
AGENTS AND LENDERS:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
individually and as Lead Arranger and Syndication Agent
By: __________________________________
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
FLEET NATIONAL BANK,
individually and as Administrative Agent
and Collateral Agent
By: _______________________________________
Name:
Title:
Notice Address:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BHF (USA) CAPITAL CORPORATION
By: _______________________________________
Name:
Title:
By: _______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BNY FINANCIAL CORPORATION
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. Stratchan
Title:
Notice Address:
1290 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC.
By: _______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
Notice Address:
The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
CITIZENS BUSINESS CREDIT COMPANY
A Division of Citizens Leasing Incorporated
By: _______________________________________
Name:
Title:
Notice Address:
Citizens Business Credit
6PPG
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
DIME COMMERCIAL CORP.
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
FREMONT FINANCIAL CORPORATION
By: _______________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By: _______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
IBJ Whitehall Business Credit Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
MERCANTILE BUSINESS CREDIT, INC.
By: _______________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Notice Address:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
NATIONAL BANK OF CANADA
By: _______________________________________
Name:
Title:
By: _______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE PROVIDENT BANK
By: _______________________________________
Name: ▇▇▇▇▇ ▇. York
Title:
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
CITY NATIONAL BANK
By: _______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE MITSUBISHI TRUST AND BANKING CORPORATION
By: _______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By: _______________________________________
Name:
Title:
Notice Address:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
FINOVA CAPITAL CORPORATION
By: _______________________________________
▇▇▇▇▇ ▇. ▇▇▇
Director
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
KEY CORPORATE CAPITAL INC.
By: _______________________________________
Name:
Title:
Notice Address:
Key Bank
NY-00-02-0606
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
By: _______________________________________
Name:
Title:
Notice Address:
American National Bank
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
LASALLE BUSINESS CREDIT, INC.
By: _______________________________________
Name:
Title:
Notice Address:
LaSalle Business Credit
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Credit Deputy
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-371-2966
PNC BANK, NATIONAL ASSOCIATION
By: _______________________________________
Name:
Title:
Notice Address:
PNC Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
DLJ CAPITAL FUNDING, INC.,
individually and as Documentation Agent
By: ________________________________________
Name:
Title:
Notice Address:
DLJ Capital Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Revolving Credit Agreement dated as of July 22,
1998, as amended, supplemented or otherwise modified to the date hereof (said
Revolving Credit Agreement, as so amended, supplemented or otherwise modified,
being the "Credit Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇
Rental, L.P., a Pennsylvania limited partnership, as borrower ("Company"),
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P., a Pennsylvania limited partnership, as
guarantor, the financial institutions listed therein as Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Partners L.P., as arranger and syndication agent, DLJ Capital Funding,
Inc., as documentation agent, and Fleet National Bank, as administrative agent
("Administrative Agent") and as collateral agent, this represents Company's
request to borrow as follows:
1. Date of borrowing:
------------------ -------------------, ---------
2. Amount of borrowing: $
------------------- ------------------
3. Lender(s): ~ a. Lenders, in accordance with their applicable
---------- Pro Rata Shares
~ b. Swing Line Lender
4. Type of Loans: ~ a. Revolving Loans.
--------------
~ b. Swing Line Loan
~ c. Term Loan
5. Interest rate option: ~ a. Base Rate Loan(s)
--------------------- ~ b. Eurodollar Rate Loans with an initial Interest Period
of [two weeks][ month(s)]
----------
The proceeds of such Loans are to be deposited in Company's account at Funding
and Payment Office.
The undersigned officer, to the best of his or her knowledge, on behalf of
the Company certifies that:
I-1
2.(ii) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are or shall be true, correct and
complete in all material respects on and as of the date hereof to the same
extent as though made on and as of the Funding Date, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date;
(iii) No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would constitute an
Event of Default or a Potential Event of Default; and
(iv) After giving effect to the borrowing contemplated hereby, the
Total Utilization of Revolving Loan Commitments shall not exceed the lesser
of (y) the Revolving Loan Commitments then in effect, and (z) the Adjusted
Borrowing Base Amount then in effect.
DATED: ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
--------------------
By: ACR Management, LLC
its general partner
By:
-----------------------------------------
Name:
Title:
I-2
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Revolving Credit Agreement dated as of July 22,
1998, as amended, supplemented or otherwise modified to the date hereof (said
Revolving Credit Agreement, as so amended, supplemented or otherwise modified,
being the "Credit Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇
Rental, L.P., a Pennsylvania limited partnership, as borrower ("Company"),
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P., a Pennsylvania limited partnership, as
guarantor, the financial institutions listed therein as Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Partners L.P., as arranger and syndication agent, DLJ Capital Funding,
Inc., as documentation agent, and Fleet National Bank, as administrative agent
("Administrative Agent") and as collateral agent, this represents Company's
request to convert or continue Loans as follows:
1. Date of conversion/continuation: ,
------------------------------- ------------------ -------
2. Amount of Loans being converted/continued: $
----------------------------------------- -------------------
3. Nature of conversion/continuation:
---------------------------------
~ a. Conversion of Base Rate Loans to Eurodollar Rate Loans
~ b. Conversion of Eurodollar Rate Loans to Base Rate Loans
~ c. Continuation of Eurodollar Rate Loans as such
4. If Loans are being continued as or converted to Eurodollar Rate Loans,
the duration of the new Interest Period that commences on the
conversion/ continuation date: [two weeks][ month(s)]
---------
In the case of a conversion to or continuation of Eurodollar Rate Loans, the
undersigned officer, to the best of his or her knowledge, and Company certify
that no Event of Default has occurred and is continuing under the Credit
Agreement.
DATED: ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
-------------------- By: ACR Management LLC,
its general partner
By:
---------------------------------------
Name:
Title:
II-1
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Revolving Credit Agreement dated as of July 22,
1998, as amended, supplemented or otherwise modified to the date hereof (said
Revolving Credit Agreement, as so amended, supplemented or otherwise modified,
being the "Credit Agreement"; the terms defined therein and nototherwise defined
herein being used herein as therein defined), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental,
L.P., a Pennsylvania limited partnership, as borrower ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇
Rental Holdings, L.P., aPennsylvania limited partnership, as guarantor, the
financial institutions listed therein as Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners
L.P., as arranger and syndication agent, DLJ Capital Funding, Inc., as
documentation agent, and Fleet National Bank, as administrative agent
("Administrative Agent") and as collateralagent, this represents Company's
request for the issuance of a Letter of Credit by Administrative Agent as
follows:
1. Date of issuance of Letter of Credit: ,
------------------------------------ ------------------ -------
2. Type of Letter of Credit: ~ a. Commercial Letter of Credit
------------------------
~ b. Standby Letter of Credit
3. Face amount of Letter of Credit: $
------------------------------- ---------------------------
4. Expiration date of Letter of Credit: ,
----------------------------------- ------------------ -------
5. Currency of Letter of Credit: ~ a. U.S. Dollars
----------------------------
~ b. Other:
------------------
6. Name and address of beneficiary:
-------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
7. Attached hereto is:
------------------
~ a. the verbatim text of such proposed Letter of Credit; or
~ b. a description of the proposed terms and conditions of such Letter of
Credit, including a precise description of any documents to be
presented by the beneficiary which, if presented by the beneficiary
prior to the expiration date of such Letter of Credit, would require
the Issuing Lender to make payment under such Letter of Credit.
III-1
The undersigned officer, to the best of his or her knowledge, on behalf of
the Company certifies that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are or shall be true, correct and
complete in all material respects on and as of the date of issuance of the
proposed Letter of Credit, to the same extent as though made on and as of
the date hereof, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations
and warranties were true, correct and complete in all material respects on
and as of such earlier date;
(ii) No event has occurred and is continuing or would result from the
issuance of the Letter of Credit contemplated hereby that would constitute
an Event of Default or a Potential Event of Default; and
(iii) The issuance of the proposed Letter of Credit will not cause (a)
the Letter of Credit Usage to exceed $25,000,000 or (b) the Total
Utilization of Revolving Loan Commitments to exceed the lesser of (y) the
Revolving Loan Commitments then in effect, and (z) the Adjusted Borrowing
Base Amount then in effect.
DATED: ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
--------------------
By: ACR management LLC,
its general partner
By:
------------------------------------
Name:
Title:
III-2
EXHIBIT IV
[FORM OF REVOLVING NOTE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
PROMISSORY NOTE DUE JULY 22, 2004
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P., a Pennsylvania limited
partnership ("Company"), promises to pay to [2] ("Payee") or its registered
assigns, on or before July 22, 2004 the lesser of (x) [3] ($[1]) and (y) the
unpaid principal amount of all advances made by Payee to Company as Revolving
Loans under the Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount hereof,
from the date hereof until paid in full, at the rates and at the times which
shall be determined in accordance with the provisions of that certain Revolving
Credit Agreement dated as of July 22, 1998, as amended, supplemented or
otherwise modified to the date hereof (said Revolving Credit Agreement, as so
amended, supplemented or otherwise modified, being the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania
limited partnership, as borrower ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings,
L.P., a Pennsylvania limited partnership, as guarantor, the financial
institutions listed therein as Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as
arranger and syndication agent, DLJ Capital Funding, Inc., as documentation
agent, and Fleet National Bank, as administrative agent ("Administrative Agent")
and as collateral agent.
This Note is one of Company's "Revolving Notes" in the aggregate principal
amount of $425,000,000 and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Revolving Loans evidenced
hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be made
in lawful money of the United States of America in same day funds at the Funding
and Payment Office or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement.
--------------------------
[1] Insert amount of Lender's Revolving Loan Commitment in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Revolving Loan Commitment in words.
IV-1
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Agent and recorded in the Register as
provided in subsection 10.1B(ii) of the Credit Agreement, Company and Agent
shall be entitled to deem and treat Payee as the owner and holder of this Note
and the Loans evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise affect
the obligations of Company hereunder with respect to payments of principal of or
interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4A(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4A(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note or
the Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.
After the occurrence of an Event of Default, Company promises to pay all
costs and expenses, including reasonable attorneys' fees, all as provided in
subsection 10.2 of the Credit Agreement, incurred in the collection and
enforcement of this Note. Company hereby consents to renewals and extensions of
time at or after the maturity hereof, without notice, and hereby waives
diligence, presentment, protest, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
IV-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ACR Management LLC,
its general partner
By:
------------------------------------------
Name:
Title:
IV-3
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
----- -------------- -------------- ---------------- --------------- ------------
IV-4
EXHIBIT IV-A
[FORM OF TERM LOAN NOTE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
PROMISSORY NOTE DUE JULY 20, 2006
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P., a Pennsylvania limited
partnership ("Company"), promises to pay to [2] ("Payee") or its registered
assigns, on or before July 20, 2006 the lesser of (x) [3] ($[1]) and (y) the
unpaid principal amount of all advances made by Payee to Company as Term Loans
under the Amended and Restated Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount hereof,
from the date hereof until paid in full, at the rates and at the times which
shall be determined in accordance with the provisions of that certain Amended
and Restated Credit Agreement dated as of July ___, 1999, as amended,
supplemented or otherwise modified to the date hereof (said Amended and Restated
Credit Agreement, as so amended, supplemented or otherwise modified, being the
"Amended and Restated Credit Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
Company, as borrower, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P., a Pennsylvania
limited partnership, as guarantor, the financial institutions listed therein as
Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as arranger and syndication agent,
DLJ Capital Funding, Inc., as documentation agent, and Fleet National Bank, as
administrative agent ("Administrative Agent") and as collateral agent.
This Note is one of Company's "Term Notes" in the aggregate principal amount
of $250,000,000 and is issued pursuant to and entitled to the benefits of the
Amended and Restated Credit Agreement, to which reference is hereby made for a
more complete statement of
_____________________
[1] Insert amount of Lender's Term Loan Commitment in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Term Loan Commitment in words.
IV-A-1
the terms and conditions under which the Term Loans evidenced hereby were made
and are to be repaid.
All payments of principal and interest in respect of this Note shall be made
in lawful money of the United States of America in same day funds at the Funding
and Payment Office or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Amended and Restated Credit
Agreement. Unless and until an Assignment Agreement effecting the assignment or
transfer of this Note shall have been accepted by Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Amended and Restated Credit
Agreement, Company and Agent shall be entitled to deem and treat Payee as the
owner and holder of this Note and the Loans evidenced hereby. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any part
hereof it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
--------
however, that the failure to make a notation of any payment made on this Note
-------
shall not limit or otherwise affect the obligations of Company hereunder with
respect to payments of principal of or interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Amended and Restated Credit Agreement and to prepayment at the
option of Company as provided in subsection 2.4B(i) of the Amended and Restated
Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Amended and Restated
Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Amended and Restated Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Amended and Restated Credit Agreement.
No reference herein to the Amended and Restated Credit Agreement and no
provision of this Note or the Amended and Restated Credit Agreement shall alter
or impair the obligations of Company, which are absolute and unconditional, to
pay the principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
IV-A-2
After the occurrence of an Event of Default, Company promises to pay all
costs and expenses, including reasonable attorneys' fees, all as provided in
subsection 10.2 of the Amended and Restated Credit Agreement, incurred in the
collection and enforcement of this Note. Company hereby consents to renewals
and extensions of time at or after the maturity hereof, without notice, and
hereby waives diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ACR Management, LLC,
its general partner
By:
------------------------------------------
Name:
Title:
IV-A-3
EXHIBIT V
[FORM OF SWING LINE NOTE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
PROMISSORY NOTE DUE JULY 22, 2004
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P., a Pennsylvania limited
partnership ("Company"), promises to pay to [2] ("Payee") or its
-----------
registered assigns, on or before July 22, 2004, the lesser of (x) [3] Dollars
([$ [1] ]) and (y) the unpaid principal amount of all advances made by
-----------
Payee to Company as Swing Line Loans under the Credit Agreement referred to
below.
Company also promises to pay interest on the unpaid principal amount hereof,
from the date hereof until paid in full, at the rates and at the times which
shall be determined in accordance with the provisions of that certain Revolving
Credit Agreement dated as of July 22, 1998, as amended, supplemented or
otherwise modified to the date hereof (said Revolving Credit Agreement, as so
amended, supplemented or otherwise modified, being the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania
limited partnership, as borrower ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings,
L.P., a Pennsylvania limited partnership, as guarantor, the financial
institutions listed therein as Lenders, ▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as
arranger and syndication agent, DLJ Capital Funding, Inc., as documentation
agent, and Fleet National Bank, as administrative agent ("Administrative
Agent"), and as collateral agent.
This Note is Company's "Swing Line Note" and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be made
in lawful money of the United States of America in same day funds at the Funding
and Payment Office or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement.
____________________
[1] Insert amount of Lender's Swing Line Commitment in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Swing Line Commitment in words.
V-1
This Note is subject to mandatory prepayment as provided in subsection
2.4A(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4A(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note or
the Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.
After the occurrence of an Event of Default, Company promises to pay all
costs and expenses, including reasonable attorneys' fees, all as provided in
subsection 10.2 of the Credit Agreement, incurred in the collection and
enforcement of this Note. Company hereby consents to renewals and extensions of
time at or after the maturity hereof, without notice, and hereby waives
diligence, presentment, protest, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
V-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ACR Management LLC,
its general partner
By:
-----------------------------------------
Name:
Title:
V-3
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
----- -------------- ---------------- --------------- ------------
V-4
EXHIBIT VI
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY ON BEHALF OF HOLDINGS (AS DEFINED BELOW) THAT:
(1) We are [the duly elected [Title]] and [Title] of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Rental Holdings, L.P., a Pennsylvania limited partnership ("Holdings");
(2) We have reviewed the terms of that certain Revolving Credit
Agreement dated as of July 22, 1998, as amended, supplemented or otherwise
modified to the date hereof (said Revolving Credit Agreement, as so amended,
supplemented or otherwise modified, being the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as
therein defined), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania
limited partnership, as borrower ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings,
L.P., a Pennsylvania limited partnership, as guarantor, the financial
institutions listed therein as Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.,
as arranger and syndication agent, DLJ Capital Funding, Inc., as
documentation agent, and Fleet National Bank, as administrative agent
("Administrative Agent"), and as collateral agent, and the terms of the
other Loan Documents, and we have made, or have caused to be made under our
supervision, a review in reasonable detail of the transactions and condition
of Holdings and its Subsidiaries during the accounting period covered by the
attached financial statements; and
(3) The examination described in paragraph (2) above did not disclose,
and we have no knowledge of, the existence of any condition or event which
constitutes an Event of Default or Potential Event of Default during or at
the end of the accounting period covered by the attached financial
statements or as of the date of this Certificate.
[Set forth [below] [in a separate attachment to this Certificate] are all
exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Holdings has taken, is taking, or proposes to take with respect to each such
condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------]
VI-1
The foregoing certifications, together with the computations set forth
in Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this day of , [199 ] [200 ] pursuant to subsection
---- ------------ -- --
6.1(iv) of the Credit Agreement.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By: ACR Management LLC,
its general partner
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
VI-2
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of , [199 ][200 ] and pertains to the period
------------ -- --
from , [199 ][200 ] to , [199 ][200 ]. Subsection
------------ -- -- ------------ -- --
references herein relate to subsections of the Credit Agreement.
A. Minimum Interest Coverage Ratio (for the four-Fiscal Quarter
period ending , [199 ][200 ])
------------- -- --
2. Consolidated Net Income: $_____________
3. Consolidated Interest Expense (subject to adjustments pursuant to
Section 7.6A and the annualization calculations set forth therein): $_____________
4. Provisions for taxes based on income (including, without duplication,
foreign withholding taxes and any Permitted Tax Distribution): $_____________
5. Total depreciation expense: $_____________
6. Total amortization expense: $_____________
7. Other non-cash items reducing Consolidated Net Income: $_____________
8. To the extent deducted in determining Consolidated Net Income,
those items described on Schedule 1.1(ii): $_____________
9. Other non-cash items increasing Consolidated
Net Income: $_____________
10. Net gains on sales of used Cranes and Lifting
Equipment: $_____________
11. Consolidated Adjusted EBITDA
(1+2+3+4+5+6+7-(8+9): $_____________
12. Interest Coverage Ratio (9):(2): ____:1.00
VI-3
13. Minimum ratio required under subsection 7.6A
from the Closing date until 6/30/99: 1.4:1.00
14. Minimum ratio required under subsection 7.6A
after 7/1/99: 1.5:1.00
B. Maximum Leverage Ratio (as of , [199 ][200 ])
------------- -- --
1. Outstanding principal amount of the Loans and Term
Loans (less, cash on hand): $_____________
2. Consolidated Adjusted EBITDA (A.10 above) (plus any
adjustment pursuant to Section 7.6D): $_____________
3. Leverage Ratio (1):(2): ____:1.00
4. Maximum Leverage Ratio permitted under
subsection 7.6B: 5.1:1.00
C. Maximum Revolver Leverage Ratio (as of , [199 ][200 ])
------------- -- --
1. Aggregate Loans outstanding (less, cash on hand): $_____________
2. Consolidated Adjusted EBITDA (A.10 above) (plus any adjustment
pursuant to Section 7.6D): $_____________
3. Revolver Leverage Ratio (1):(2): _____:1.00
4. Maximum Revolver Leverage Ratio permitted under subsection 7.6C: 4.5:1.00
VI-4
EXHIBIT VII
[FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES]
[SEE ATTACHED]
VII-1
EXHIBIT VIII
[FORM OF OPINION OF SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP]
[Skadden Letterhead]
[Date]
1 9 9 9
[doc ID]
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.,
as Arranger and Syndication Agent
DLJ Capital Funding, Inc.,
as Documentation Agent
Fleet National Bank,
as Administrative Agent
and
The Lenders Party to the Credit
Agreement Referenced Below
Re: Loans to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
-----------------------------------
Ladies and Gentlemen:
We have acted as counsel to ▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as
arranger and syndication agent (in such capacity, "Syndication Agent"), DLJ
Capital Funding, Inc., as documentation agent (in such capacity, "Documentation
Agent") and Fleet National Bank, as administrative agent (in such capacity,
"Administrative Agent"; collectively, Syndication Agent, Documentation Agent and
Administrative Agent are referred to herein as "Agents"), in connection with the
preparation and delivery of (i) a Amended and Restated Credit Agreement dated as
of June 30, 1999 (the "Amended and Restated Credit Agreement") and (ii) a Term
Loan Credit Agreement dated as of July 22, 1998 (the "Term Loan Credit
Agreement"; together with the Amended and Restated
VIII-1
Credit Agreement, the "Credit Agreements"), each among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental,
L.P., a Pennsyl-vania limited partnership ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental
Holdings, L.P., a Pennsylvania limited partnership ("Holdings"), the financial
institutions listed therein as lenders and Agents, and in connection with the
preparation and delivery of certain related documents.
We have participated in various conferences with representatives of
Company and Agents and conferences and telephone calls with ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
counsel to Company and Holdings, during which the Credit Agreements and related
matters have been discussed, and we have also participated in the meeting held
on the date hereof (the "Closing") incident to the funding of the initial loans
made under the Credit Agreements. We have reviewed the forms of the Credit
Agreements and the respective exhibits thereto, including the forms of the
promissory notes annexed thereto (the "Notes"), and the opinions of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ (collectively, the "Opinions") and the officers'
certificates and other documents delivered at the Closing. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals or copies and the due authority of all persons executing the same,
and we have relied as to factual matters on the documents that we have reviewed.
Although we have not independently considered all of the matters
covered by the Opinions to the extent necessary to enable us to express the
conclusions therein stated, we believe that the Credit Agreements and the
respective exhibits thereto are in substantially acceptable legal form and that
the Opinions and the officers' certificates and other documents delivered in
connection with the execution and delivery of, and as conditions to the making
of the initial loans under, the Credit Agreements and the Notes are
substantially responsive to the respective requirements of the Credit
Agreements.
Respectfully submitted,
VIII-2
EXHIBIT IX
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement") is entered into by and between
the parties designated as Assignor ("Assignor") and Assignee ("Assignee") above
the signatures of such parties on the Schedule of Terms attached hereto and
hereby made an integral part hereof (the "Schedule of Terms") and relates to
that certain Revolving Credit Agreement described in the Schedule of Terms (said
Revolving Credit Agreement, as amended, supplemented or otherwise modified to
the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. Assignment and Assumption.
(a) Effective upon the Settlement Date specified in Item 4 of the Schedule
of Terms (the "Settlement Date"), Assignor hereby sells and assigns to Assignee,
without recourse, representation or warranty (except as expressly set forth
herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents with respect to
Assignor's Term Loan Commitments, Revolving Loan Commitment and outstanding
Loans, if any, which represents, as of the Settlement Date, the percentage
interest specified in Item 3 of the Schedule of Terms of all rights and
obligations of Lenders arising under the Credit Agreement and the other Loan
Documents with respect to the Commitments and any outstanding Loans (the
"Assigned Share"). Without limiting the generality of the foregoing, the
parties hereto hereby expressly acknowledge and agree that any assignment of all
or any portion of Assignor's rights and obligations relating to Assignor's
Revolving Loan Commitment shall include (i) in the event Assignor is an Issuing
Lender with respect to any outstanding Letters of Credit (any such Letters of
Credit being "Assignor Letters of Credit"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above, Assignee hereby
agrees to pay to Assignor, on the Settlement Date, the principal amount of any
outstanding Loans included within the Assigned Share, such payment to be made by
wire transfer of immediately available funds in accordance with the applicable
payment instructions set forth in Item 5 of the Schedule of Terms.
IX-1
(c) Assignor hereby represents and warrants (i) that Item 3 of the Schedule
of Terms correctly sets forth the amount of the Commitments, the outstanding
Loans and the Pro Rata Share corresponding to the Assigned Share and (ii) that
the assignment complies with clause (a) or (b), as applicable, of subsection
10.1B(i).
(d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described above, (i) Assignee shall be a party to the
Credit Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
Assigned Share, and (ii) Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Company,
Agents, Assignor and the other Lenders and their respective successors and
permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their understanding
and intent that (i) this Agreement shall effect the assignment by Assignor and
the assumption by Assignee of Assignor's rights and obligations with respect to
the Assigned Share, (ii) any other assignments by Assignor of a portion of its
rights and obligations with respect to the Commitments and any outstanding Loans
shall have no effect on the Commitments, the outstanding Loans and the Pro Rata
Share corresponding to the Assigned Share as set forth in Item 3 of the Schedule
of Terms or on the interest of Assignee in any outstanding Loans corresponding
thereto, and (iii) from and after the Settlement Date, Administrative Agent
shall make all payments under the Credit Agreement in respect of the Assigned
Share (including without limitation all payments of principal and accrued but
unpaid interest, commitment fees and letter of credit fees with respect thereto)
(A) in the case of any such interest and fees that shall have accrued prior to
the Settlement Date, to Assignor, and (B) in all other cases, to Assignee;
provided that Assignor and Assignee shall make payments directly to each other
to the extent necessary to effect any appropriate adjustments in any amounts
distributed to Assignor and/or Assignee by Administrative Agent under the Loan
Documents in respect of the Assigned Share in the event that, for any reason
whatsoever, the payment of consideration contemplated by Section 1(b) occurs on
a date other than the Settlement Date.
SECTION 2. Certain Representations, Warranties and Agreements.
--------------------------------------------------
(a) Assignor represents and warrants that it is the legal and beneficial
owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Assignor to Assignee or by or on behalf
of Company or any of its Subsidiaries to Assignor or Assignee in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations,
IX-2
nor shall Assignor be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default.
(c) Assignee represents and warrants that it is an Eligible Assignee; that
it has experience and expertise in the making of or investing in loans such as
the Loans; that it has acquired the Assigned Share for its own account in the
ordinary course of its business and without a view to distribution of the Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of
subsection 10.1 of the Credit Agreement, the disposition of the Assigned Share
or any interests therein shall at all times remain within its exclusive
control); and that it has received, reviewed and approved a copy of the Credit
Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from Assignor such
financial information regarding Company and its Subsidiaries as is available to
Assignor and as Assignee has requested, that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the assignment evidenced by this Agreement, and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Assignor shall have no duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Assignee or to provide Assignee
with any other credit or other information with respect thereto, whether coming
into its possession before the making of the initial Loans or at any time or
times thereafter, and Assignor shall not have any responsibility with respect to
the accuracy of or the completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the other party
hereto that it has full power and authority to enter into this Agreement and to
perform its obligations hereunder in accordance with the provisions hereof, that
this Agreement has been duly authorized, executed and delivered by such party
and that this Agreement constitutes a legal, valid and binding obligation of
such party, enforceable against such party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity.
SECTION 3. Miscellaneous.
-------------
(a) Each of Assignor and Assignee hereby agrees from time to time, upon
request of the other such party hereto, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party
IX-3
required to evidence its consent to or acceptance of this Agreement) against
whom enforcement of such change, waiver, discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of subsection 10.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure to the benefit of,
the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(h) This Agreement shall become effective upon the date (the "Effective
Date") upon which all of the following conditions are satisfied: (i) the
execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
execution of a counterpart hereof by Company as evidence of its consent hereto
to the extent required under subsection 10.1B(i) of the Credit Agreement, (iii)
the receipt by Administrative Agent of the processing and recordation fee
referred to in subsection 10.1B(i) of the Credit Agreement, (iv) in the event
Assignee is a Non-US Lender (as defined in subsection 2.7B(iii)(a) of the Credit
Agreement), the delivery by Assignee to Administrative Agent and Company of such
forms, certificates or other evidence with respect to United States federal
income tax withholding matters as Assignee may be
IX-4
required to deliver to Administrative Agent pursuant to said subsection
2.7B(iii)(a), (v) the execution of a counterpart hereof by Administrative Agent
as evidence of its acceptance hereof in accordance with subsection 10.1B(ii) of
the Credit Agreement, and (vi) the receipt by Administrative Agent of originals
or telefacsimiles of the counterparts described above and authorization of
delivery thereof, and (vii) the recordation by Administrative Agent in the
Register of the pertinent information regarding the assignment effected hereby
in accordance with subsection 10.1B(ii) of the Credit Agreement.
[Remainder of page intentionally left blank]
IX-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
IX-6
SCHEDULE OF TERMS
1. Borrower: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania limited partnership
--------
2. Name and Date of Credit Agreement: Revolving Credit Agreement dated as of
July 22, 1998, as amended, supplemented or otherwise modified to the date
hereof, by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania limited
partnership as borrower, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P., a Pennsylvania
limited partnership, as guarantor, ▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as
arranger and syndication agent, the financial institutions listed therein as
Lenders, DLJ Capital Funding, Inc., as documentation agent, and Fleet
National Bank, as administrative agent and as collateral agent.
3. Amounts:
-------
Revolving Loans Term Loans
--------------- ----------
(a) Aggregate Commitments of all
all Lenders: $_________ $_________
(b) Assigned Share/Pro Rata Share: _________% _________%
(c) Amount of Assigned Share of
Commitments: $_________ $_________
(d) Amount of Assigned Loans: $_________ $_________
4. Settlement Date: , [1999][200 ]
--------------- ------------ --
5. Payment Instructions:
----------------
ASSIGNOR: ASSIGNEE:
See Annex A See Annex B
6. Notice Addresses:
----------------
ASSIGNOR: ASSIGNEE:
See Annex A See Annex B
IX-7
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
------------------------- ----------------------
Name: Name:
Title: Title:
Consented to and accepted in accordance
with subsections 10.1B(i) and (ii)
of the Credit Agreement
FLEET NATIONAL BANK,
as Administrative Agent
By:
--------------------------
Name:
Title:
Consented to and accepted in accordance with
subsection 10.1B(i) of the Credit Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ACR Management LLC,
its general partner
By:
--------------------------
Name:
Title:
IX-8
ANNEX A
-------
Assignor Payment Instructions:
-----------------------------
______________________________
______________________________
______________________________
Attention: ___________________
Reference: ___________________
Assignor Notice Addresses:
-------------------------
______________________________
______________________________
______________________________
Attention: ___________________
Reference: ___________________
IX-9
ANNEX B
-------
Assignor Payment Instructions:
-----------------------------
______________________________
______________________________
______________________________
Attention: ___________________
Reference: ___________________
Assignor Notice Addresses:
-------------------------
______________________________
______________________________
______________________________
Attention: ___________________
Reference: ___________________
IX-10
EXHIBIT X
---------
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Revolving Credit Agreement dated
as of July 22, 1998, as amended, supplemented or otherwise modified to the date
hereof (said Revolving Credit Agreement, as so amended, supplemented or
otherwise modified, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined), by and among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania limited partnership as borrower
("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P., a Pennsylvania limited
partnership, as guarantor, the financial institutions listed therein as Lenders,
▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as arranger and syndication agent, DLJ
Capital Funding, Inc., as documentation agent, and Fleet National Bank, as
administrative agent, and as collateral agent. Pursuant to subsection 2.7B(iii)
of the Credit Agreement, the undersigned hereby certifies that it is not a
"bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code of 1986, as amended.
DATED: [NAME OF LENDER]
----------------------
By:
----------------------------------
Name:
Title:
X-1
EXHIBIT XI
[FORM OF FINANCIAL CONDITION CERTIFICATE]
This FINANCIAL CONDITION CERTIFICATE (this "Certificate") is delivered in
connection with that certain Revolving Credit Agreement dated as of July 22,
1998 (the "Revolving Credit Agreement"), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental,
L.P., a Pennsylvania limited partnership ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental
Holdings, L.P., a Pennsylvania limited partnership ("Holdings"), the financial
institutions referred to therein as lenders (the "Revolving Credit Agreement
Lenders"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. ("GSCP"), as arranger and
syndication agent, DLJ Capital Funding, Inc. ("DLJ"), as documentation agent,
Fleet National Bank ("Fleet"), as administrative agent, and as collateral agent,
(the "CA Administrative Agent"), and that certain Term Loan Credit Agreement
dated as of July 22, 1998 ("Term Loan Credit Agreement") by and among Company,
Holdings, the financial institutions listed therein as lenders (the"Term
Lenders"), GSCP as arranger and syndication agent, DLJ, as documentation agent,
Fleet, as administrative agent (the "Term Administrative Agent") and as
collateral agent. Capitalized terms used herein without definition have the
same meanings as in the Revolving Credit Agreement.
A. I am, and at all pertinent times mentioned herein have been, the duly
qualified and acting [vice president, controller and principal accounting
officer] of Holdings [and/or Company]. I am familiar with the terms and
conditions of the Revolving Credit Agreement and the Term Loan Credit Agreement
(together, the "Credit Agreements").
B. I have carefully reviewed the contents of this Certificate, and I have
conferred with counsel for Holdings for the purpose of discussing the meaning of
its contents.
C. In connection with preparing for the consummation of the transactions
and financings contemplated by the Revolving Credit Agreement and the Term Loan
Credit Agreement (the "Proposed Transactions"), I have participated in the
preparation of, and I have reviewed, pro forma projections of net income and
cash flows for Holdings and its Subsidiaries for the fiscal years of Holdings
ending December 31, 1998 through December 31, 2006, inclusive (the "Projected
Financial Statements"). The Projected Financial Statements, attached hereto as
Exhibit A, give effect to the consummation of the Proposed Transactions and
---------
assume that the debt obligations of Holdings will be paid from the cash flow
generated by the operations of Holdings and its Subsidiaries and other cash
resources. The Projected Financial Statements were prepared on the basis of
information available at July 22, 1998. I know of no facts that have occurred
since such date that would lead me to believe that the Projected Financial
Statements are inaccurate in any material respect. The Projected Financial
Statements do not reflect (i) any potential changes in interest rates from those
assumed in the Projected Financial Statements, (ii) any potential material,
adverse changes in general business conditions, or (iii) any potential changes
in income tax laws.
D. In connection with the preparation of the Projected Financial
Statements, I have made such investigations and inquiries as I have deemed
necessary and prudent therefor and, specifically, have relied on historical
information with respect to revenues, expenses and other relevant items supplied
by the
XI-1
supervisory personnel of Holdings and its Subsidiaries directly responsible for
the various operations involved. The assumptions upon which the Projected
Financial Statements are based are stated therein. Although any assumptions and
any projections by necessity involve uncertainties and approximations, I
believe, based on my discussions with other members of management, that the
assumptions on which the Projected Financial Statements are based are
reasonable. Based thereon, I believe that the projections for Holdings and its
Subsidiaries, taken as a whole, reflected in the Projected Financial Statements
provide reasonable estimations of future performance, subject, as stated above,
to the uncertainties and approximations inherent in any projections.
Based on the foregoing, I have, in my capacity as [vice president,
controller and principal accounting officer] of Holdings [and/or Company],
reached the following conclusions:
1. Holdings and its Subsidiaries are not now, nor will the incurrence
of the Obligations under the Revolving Credit Agreement and the Obligations
(as such term is defined in the Term Loan Credit Agreement) under the Term
Loan Credit Agreement, and the incurrence of the other obligations
contemplated by the Proposed Transactions render Holdings and its
Subsidiaries "insolvent" as defined in this paragraph 1. The recipients of
this Certificate and I have agreed that, in this context, "insolvent" means
that the present fair saleable value of assets (on a going concern basis
based on the valuation procedures performed by ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co. in
their letter of even date herewith (the "MDC Opinion")) is less than the
amount that will be required to pay the probable liability on existing
debts as they become absolute and matured. We have also agreed that the
term "debts" includes any legal liability, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed or contingent. My conclusion
expressed above is supported by the MDC Opinion. The assumptions on which
the MDC Opinion is based are stated therein. I believe that the
assumptions on which the MDC Opinion is based are reasonable.
2. By the incurrence of the Obligations under the Revolving Credit
Agreement, the Obligations (as such term is defined in the Term Loan Credit
Agreement) under the Term Loan Credit Agreement, and the incurrence of the
other obligations contemplated by the Proposed Transactions, Holdings and
its Subsidiaries will not incur debts beyond its ability to pay as such
debts mature. I have based my conclusion in part on the Projected
Financial Statements, which demonstrate that Holdings and its Subsidiaries
will have positive cash flow after paying all of its scheduled anticipated
indebtedness (including scheduled payments under the Revolving Credit
Agreement, the Term Loan Credit Agreement, the other obligations
contemplated by the Proposed Transactions and other permitted
indebtedness). I have concluded that the realization of current assets in
the ordinary course of business will be sufficient to pay recurring current
debt and short-term and long-term debt service as such debts mature, and
that the cash flow (including earnings plus non-cash charges to earnings)
will be sufficient to provide cash necessary to repay the Loans and other
Obligations under the Revolving Credit Agreement and the Loans (as such
term is defined in the Term Loan Credit Agreement) and other Obligations
(as such term is defined in the Term Loan Credit Agreement) under the Term
Loan Credit Agreement, the other obligations contemplated by the Proposed
Transactions and other long-term indebtedness as such debt matures. The
foregoing conclusion also assumes that Holdings and its Subsidiaries will
refinance their outstanding debt in the year in which the Senior
Subordinated Notes and the Discount Notes mature.
XI-2
3. As of the Closing Date, the incurrence of the Obligations under the
Revolving Credit Agreement, the Obligations (as such term is defined in the
Term Loan Credit Agreement) under the Term Loan Credit Agreement, and the
incurrence of the other obligations contemplated by the Proposed
Transactions will not leave Holdings and its Subsidiaries with property
remaining in their hands constituting "unreasonably small capital." In
reaching this conclusion, I understand that "unreasonably small capital"
depends upon the nature of the particular business or businesses conducted
or to be conducted, and I have reached my conclusion based on the needs and
anticipated needs for capital of the businesses conducted or anticipated to
be conducted by Holdings and its Subsidiaries in light of the Projected
Financial Statements and available credit capacity.
4. To the best of my knowledge, Holdings and its Subsidiaries have not
executed the Revolving Credit Agreement, the Term Loan Credit Agreement, or
any documents mentioned therein, or made any transfer or incurred any
obligations thereunder, with actual intent to hinder, delay or defraud
either present or future creditors.
I understand that Administrative Agent, Term Administrative Agent,
Revolving Credit Agreement Lenders, and Term Lenders are relying on the truth
and accuracy of the foregoing in connection with the extension of credit to
Company pursuant to the Revolving Credit Agreement and the Term Loan Credit
Agreement.
On behalf of Holdings, in my capacity as [vice president, controller and
principal accounting officer], I represent the foregoing information to be, to
the best of my knowledge and belief, true and correct and execute this
Certificate this 22nd day of July, 1998.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By:
----------------------------------
Name:
[Vice President, Controller and
Principal Accounting Officer]
XI-3
EXHIBIT XII
[FORM OF INTERCREDITOR AGREEMENT]
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of July 22, 1998 (this "Agreement"),
is entered into by and among FLEET NATIONAL BANK, as administrative agent (in
such capacity, the "Revolving Facility Agent") for the lenders and the issuer of
letters of credit under the Revolving Credit Agreement referred to below, FLEET
NATIONAL BANK, as administrative agent (in such capacity, the "Term Facility
Agent") for the lenders under the Term Loan Credit Agreement referred to below,
and FLEET NATIONAL BANK, as collateral agent (in such capacity, together with
its successors in such capacity, the "Collateral Agent") under each of the
Security Documents, the Subsidiary Guaranty and the Holdings Guaranty dated of
even date herewith referred to below.
RECITALS
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P. (the "Company"), as the borrower,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P. ("Holdings"), the several lenders from time
to time parties thereto (the "Revolving Facility Lenders"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Partners L.P. ("GSCP"), as arranger and syndication agent, DLJ Capital Funding,
Inc. ("DLJ"), as documentation agent, and the Revolving Facility Agent have
entered into a Revolving Credit Agreement dated as of July 22, 1998 (said
agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Revolving Credit Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined);
WHEREAS, the Company, Holdings, the various financial institutions parties
thereto (the "Term Facility Lenders"), GSCP, as arranger and syndication agent,
DLJ, as documentation agent, and the Term Facility Agent have entered into an
Term Loan Credit Agreement dated as of July 22, 1998 (said agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Term Loan Credit Agreement");
WHEREAS, the Company may from time to time enter into one or more Interest
Rate Agreements (collectively, the "Hedge Agreements") with one or more
Revolving Credit Lenders or any Affiliate thereof (in such capacity,
collectively, "Lender Counterparties") in accordance with Section 6.10 of the
Revolving Credit Agreement;
WHEREAS, the terms of the Revolving Credit Agreement and the Term Loan
Credit Agreement require that the Company execute and deliver to the Collateral
Agent the Pledge and Security Agreement, securing the Company's obligations to
the Revolving Facility Lenders, the Term Facility Lenders, the Revolving
Facility Agent and the Term Facility Agent as provided therein;
WHEREAS, the terms of the Revolving Credit Agreement and the Term Loan
Credit Agreement also require that all Subsidiaries of Holdings (other than
Company and Excluded Subsidiaries) execute and deliver to the Collateral Agent a
guaranty (the "Subsidiary Guaranty") guaranteeing the Company's
XII-1
obligations to the Revolving Facility Lenders (including the obligations of the
Company to the Issuing Lender in respect of any Letters of Credit), the Lender
Counterparties, the Term Facility Lenders, the Revolving Facility Agent and the
Term Facility Agent as provided therein (such Subsidiaries and any future
Subsidiaries executing the Subsidiary Guaranty being referred to herein as the
"Subsidiary Guarantors"; the Subsidiary Guarantors and Holdings and General
Partner collectively being referred to herein as the "Guarantors"), and that all
Subsidiaries of Holdings (other than Excluded Subsidiaries) execute and deliver
to the Collateral Agent the Pledge and Security Agreement securing the
obligations of such Subsidiaries under the Subsidiary Guaranty;
WHEREAS, the terms of the Revolving Credit Agreement and the Term Loan
Credit Agreement also require that Holdings and General Partner execute and
deliver to the Collateral Agent a guaranty (the "Holdings Guaranty"; together
with the Subsidiary Guaranty, the "Guaranties") guaranteeing the Company's
obligations to the Revolving Facility Lenders (including the obligations of the
Company to the Issuing Lender in respect of any Letters of Credit), the Term
Facility Lenders, the Revolving Facility Agent and the Term Facility Agent as
provided therein, and that Holdings execute and deliver to the Collateral Agent
the Pledge and Security Agreement securing the obligations of Holdings under the
Holdings Guaranty (the Pledge and Security Agreement, and any other security
agreements, mortgages and deeds of trust entered into by any Loan Party (as
hereinafter defined) for the benefit of any Secured Parties and any other
security agreements, mortgages and deeds of trust entered into by any Loan Party
(as hereinafter defined) for the benefit of any Secured Parties (hereinafter
defined), being collectively referred to herein as the "Security Documents");
WHEREAS, the Revolving Facility Agent, the Term Facility Agent and the
Collateral Agent (such parties collectively referred to as the "Parties") desire
to set forth certain provisions regarding the appointment, duties and
responsibilities of the Collateral Agent, their respective rights in the
Collateral, the application of proceeds of enforcement and to set forth certain
other provisions concerning the obligations of the Company, Holdings and the
Subsidiaries of Holdings executing the Guaranties and the Security Documents
(collectively, the "Loan Parties") to the Parties, the Revolving Facility
Lenders, the Term Facility Lenders and any Lender Counterparties (collectively,
together with the Parties, the "Secured Parties") under the agreements referred
to in the foregoing recitals; and
WHEREAS, the Parties wish to set forth their agreement as to the decisions
relating to the exercise of remedies under the Security Documents, the
Guaranties and certain limitations on the exercise of such remedies.
NOW, THEREFORE, the Parties and, by their acceptance of the benefits hereof
and of the Guaranties and the Security Documents, the Lender Counterparties (by
their acceptance of the benefits of this Agreement) agree as follows:
Section 1. Appointment As Collateral Agent. The Revolving Facility Agent
-------------------------------
on behalf of the Revolving Facility Lenders, the Term Facility Agent on behalf
of the Term Facility Lenders, and the Lender Counterparties (by their acceptance
of the benefits of this Agreement) hereby severally appoint Fleet to serve as
the Collateral Agent and representative of the Secured Parties, and each such
Party and Lender Counterparty authorizes the Collateral Agent to act as agent
for the Secured Parties (a) for the purposes of executing and delivering on its
behalf the Security Documents to be executed and delivered by the Loan
XII-2
Parties and exercising and performing the rights, duties and obligations of
Collateral Agent thereunder and, subject to the provisions of this Agreement,
enforcing the Secured Parties' rights in respect of the Collateral and the
obligations of the Loan Parties under the Security Documents, and (b) for the
purpose of enforcing the Secured Parties' rights under the Guaranties and the
obligations of the Guarantors under the Guaranties. The Collateral Agent hereby
accepts such appointment and agrees to act as Collateral Agent hereunder and to
enter into and act as Collateral Agent under each of the Security Documents and
the Guaranties in accordance with the terms thereof and of this Agreement.
Section 2. Decisions Relating to Exercise of Remedies Vested in Requisite
--------------------------------------------------------------
Obligees.
--------
(a) The Collateral Agent agrees to make such demands, to give such notices
and to take such other actions under this Agreement, the Guaranties and the
Security Documents as are expressly required under the terms hereof and thereof
or as Requisite Obligees may request, and to take such action to enforce the
Guaranties and the Security Documents and to foreclose upon, collect and dispose
of the Collateral or any portion thereof as may be expressly required under the
terms of this Agreement, the Guaranties or the Security Documents or as
Collateral Agent may be directed by Requisite Obligees. The Collateral Agent
shall not be required to take any action that is in its opinion contrary to law
or to the terms of this Agreement, any or all of the Security Documents or the
Guaranties or that would in its opinion subject it or any of its officers,
employees, agents or directors to liability, and the Collateral Agent shall not
be required to take any action under this Agreement, any or all of the Security
Documents or the Guaranties unless and until the Collateral Agent shall be
indemnified to its satisfaction by the Secured Parties against any and all loss,
cost, expense or liability in connection therewith.
(b) Each Party executing this Agreement, or otherwise accepting the
benefits hereof, agrees that the Collateral Agent may act as Requisite Obligees
may request (regardless of whether any individual Party or any other Secured
Party agrees, disagrees or abstains with respect to such request), that the
Collateral Agent shall have no liability for acting in accordance with such
request and that no Party or Secured Party shall have any liability to any other
Party or Secured Party for any such request. The Collateral Agent shall give
prompt notice to all Parties of actions taken pursuant to the instructions of
Requisite Obligees; provided, however, that the failure to give any such notice
-------- -------
shall not impair the right of the Collateral Agent to take any such action or
the validity or enforceability under this Agreement of the action so taken.
(c) The Collateral Agent may at any time request directions from the
Requisite Obligees as to any course of action or other matters relating hereto
or to the Security Documents or the Guaranties. Directions given by Requisite
Obligees to the Collateral Agent shall be binding on the Parties, the Revolving
Facility Lenders, the Term Facility Lenders and all Secured Parties for all
purposes.
(d) Each Party, on behalf of the Secured Parties, and each Lender
Counterparty, agrees not to take any action whatsoever to enforce any term or
provision of the Security Documents or the Guaranties or to enforce any of its
rights in respect of the Collateral, except through the Collateral Agent in
accordance with the terms of this Agreement.
XII-3
Section 3. Application of Proceeds of Security, Guaranty Payments, Etc.
-----------------------------------------------------------
XII-4
(a) The Collateral Agent shall establish and maintain an account (the
"Collateral Account") into which it shall deposit (i) all amounts received by it
in its capacity as the Collateral Agent in respect of any Security Document or
the Guaranties (including all monies received on account of any sale of or other
realization upon any of the Collateral pursuant to any Security Document or
pursuant to Section 5(b) hereof and all monies received by it on account of the
enforcement of the Guaranties), and (ii) all amounts received by it as a result
of payments described in Section 5(c). The Collateral Account referred to in
the preceding sentence shall be established and maintained for the benefit of
all Secured Parties. The Collateral Agent shall have exclusive dominion and
control over the Collateral Account.
(b) Prior to the delivery of a Notice of Acceleration any amounts deposited
in the Collateral Accounts may be disbursed from the Collateral Accounts only
upon the prior written consent of the Requisite Obligees. After the occurrence
of a Notice of Acceleration and until such Notice is rescinded, the Collateral
Agent shall disburse funds from the Collateral Account only as provided in this
Section 3.
(c) When a Notice of Acceleration is in effect, all amounts deposited in
the Collateral Account shall be applied in the following order of priority:
First, to the extent not theretofore paid by or on behalf of any Loan
-----
Party, to pay all fees, costs, expenses of the Collateral Agent incurred in
connection with the performance of its duties hereunder or under the
Security Documents or the Guaranties, as the case may be, including
reasonable attorneys' fees and expenses and all Collateral Agent
Obligations and any other amounts payable to the Collateral Agent hereunder
or under any of the Security Documents or the Guaranties in respect of any
indemnities or other obligations of the Loan Parties;
Second, to the Revolving Facility Agent in an amount equal to the
------
aggregate amount of all Revolving Credit Agreement Obligations held by
Revolving Facility Lenders and to the Lender Counterparties in an amount
equal to the aggregate amount of all Hedge Agreement Obligations held by
such Lender Counterparties (such amount to be allocated pro rata based on
the outstanding Revolving Credit Agreement Obligations and the Hedge
Agreement Obligations);
Third, to the Term Facility Agent in an amount equal to the aggregate
-----
amount of all Term Loan Credit Agreement Obligations held by Term Facility
Lenders; and
Fourth, the balance, if any, to the Company or such other person or
------
persons as are entitled thereto.
(d) Unless the Collateral Agent shall have received instructions from the
Requisite Obligees as to the times at which any amounts are to be distributed
pursuant to Section 3(c), all distributions or transfers pursuant to Section
3(c) shall be made at such times and as promptly as the Collateral Agent shall
in its good faith discretion determine to be reasonable and practicable under
the circumstances, given the amount available for distribution or transfer in
the Collateral Account, the time at which the next addition to the Collateral
Account is expected to be made, and the cost of distributing funds to the
Secured Parties entitled to receive the same. The Collateral Agent shall at all
times have the right to request distribution instructions as contemplated by the
preceding sentence.
XII-5
(e) Pending the disbursement thereof pursuant to the terms of this
Agreement, all amounts in the Collateral Account shall be invested by the
Collateral Agent in such Cash Equivalents as it shall determine from time to
time or such other investments as shall be approved by Requisite Obligees;
provided that, so long as no Event of Default shall have occurred and be
--------
continuing, the Collateral Agent shall make such other investments at the
direction of the Company. All reasonable commissions and other reasonable costs
and expenses incurred by the Collateral Agent in connection with the acquisition
or disposition by it of Cash Equivalents or such other investments may be
deducted by the Collateral Agent from the income received by the Collateral
Agent with respect thereto.
(f) Payments by the Collateral Agent in respect of the Revolving Credit
Agreement Obligations shall be made to the Revolving Facility Agent for
distribution to the Revolving Facility Lenders in accordance with the terms of
the Revolving Credit Agreement; payments by the Collateral Agent in respect of
the Term Loan Credit Agreement Obligations shall be made to the Term Facility
Agent for distribution to the Term Facility Lenders in accordance with the terms
of the Term Loan Credit Agreement; and payments by the Collateral Agent in
respect of the Hedge Agreement Obligations shall be distributed to the Lender
Counterparties pro rata in accordance with the aggregate amount of Hedge
--------
Agreement Obligations held by such Lender Counterparty.
Section 4. Information.
-----------
(a) Upon the request of the Collateral Agent, each Party and each Lender
Counterparty (by virtue of such Lender Counterparty's acceptance of the benefits
of this Agreement) agrees to promptly inform the Collateral Agent of the
existence and amount of the Secured Obligations owing to such Party or such
Lender Counterparty and such other Secured Parties for whom such Party is acting
as agent, trustee or other representative and of any commitments to extend
additional credit which will constitute Secured Obligations by such Party or
other Secured Parties. Upon request of the Collateral Agent, each Party (other
than the Collateral Agent) and each Lender Counterparty will inform the
Collateral Agent of such payments on the Secured Obligations as may be received
from time to time by such Party and such other Secured Parties for whom such
Party is acting as agent, trustee or other representative.
(b) If, notwithstanding the request of the Collateral Agent, any Party or
Lender Counterparty shall fail or refuse reasonably promptly to certify as to
the existence or amount of any Secured Obligation or such other information
concerning the Secured Obligations as the Collateral Agent may reasonably
request, the Collateral Agent shall be entitled to determine such existence or
amount of such Secured Obligations by such method as the Collateral Agent may,
in its sole discretion, determine in good faith, including by reliance upon a
certificate of an officer of the Company. The Collateral Agent may rely
conclusively, and shall be fully protected in so relying, on any determination
made by it in good faith in accordance with the provisions of this Section (or
as otherwise directed by a court of competent jurisdiction after notice and
hearing on the merits) and, in the absence of gross negligence, shall have no
liability to Company, any Subsidiary, any holder of any Secured Obligation or
any other person as a result of such determination.
(c) If the Collateral Agent receives any Notice of Acceleration or
certificate rescinding a Notice of Acceleration or any request by the Company
for any consent, waiver or amendment with respect hereto
XII-6
or any Security Document or the Guaranties, it shall give prompt notice thereof
to each Party at the address for such Party provided for in Section 8 hereof.
(d) A Notice of Acceleration shall be deemed to have been given only when
the Notice of Acceleration has actually been received by the Collateral Agent
and to have been rescinded when the Collateral Agent has actually received from
the creditor or creditor group which gave such Notice of Acceleration a notice
withdrawing such Notice of Acceleration. A Notice of Acceleration shall be
deemed to be outstanding at all times after such Notice of Acceleration has been
given until such time, if any, as such Notice of Acceleration has been
rescinded.
(e) The Collateral Agent shall keep executed counterparts of this
Agreement, the Security Documents and the Guaranties at the Collateral Agent's
address as set forth under Collateral Agent's signature on the signature page to
this Agreement and shall permit any Secured Party to inspect this Agreement, the
Security Documents and the Guaranties upon request and to take copies thereof.
Section 5. Intercreditor Arrangements.
--------------------------
(a) Notwithstanding the date, time, manner or order of perfection or
recording of the security interests and Liens granted to any Secured Party, and
notwithstanding any provisions of the UCC, of any applicable law or decision, or
of any of the Security Documents or whether any Secured Party holds possession
of all or any part of the Collateral, the following, as between the Revolving
Facility Lenders, the Lender Counterparties and the Term Facility Lenders shall
be, upon and after the Closing Date, the relative priority of the security
interests and Liens of the Revolving Facility Lenders and the Term Facility
Lenders in the Collateral:
(i) The Revolving Facility Lenders and the Lender Counterparties shall
have a first and prior security interest and Lien in the Collateral and all
Proceeds of any of the foregoing, whether now owned or hereafter acquired
by any Loan Party.
(ii) The Term Facility Lenders shall have a second priority and
subordinate security interest and Lien in all Collateral and all of any of
the foregoing, whether now owned or hereafter acquired by any Loan Party.
The priorities, subordination and distribution arrangements specified in
this Section 5(a) and the other provisions of this Section 5 with respect to any
Collateral are expressly intended to be effective regardless of the avoidability
or non-perfection of the security interests and Liens held by any of the Secured
Parties in such Collateral, and in the event the security interests or Liens
held by any of the Secured Parties in any Collateral is judicially determined to
be unperfected or is avoided for any reason, then the priorities, subordination
and distribution arrangements provided for in this Agreement, shall as to the
parties to this Agreement, remain effective as to such Collateral. Each Secured
Party agrees that it will not challenge the legality, validity, enforceability
or priority of the Revolving Credit Agreement Obligations, the Hedge Agreement
Obligations or Term Loan Credit Agreement Obligations, as the case may be, or
the legality, validity, enforceability, perfection or priority of the Liens
granted pursuant to the Security Documents as set forth herein or the rights of
any Secured Party under the Security Documents.
XII-7
(b) If any Secured Party acquires custody, control or possession of any
Collateral or proceeds therefrom, or payments with respect to the Guaranties,
other than by distribution from the Collateral Agent pursuant to the terms of
this Agreement, such Secured Party shall promptly cause such Collateral,
proceeds or payments to be delivered to or put in the custody, possession or
control of the Collateral Agent for disposition or distribution in accordance
with the provisions of Section 3. Until such time as the provisions of the
immediately preceding sentence have been complied with, such Secured Party shall
be deemed to hold all such Collateral, proceeds and payments in trust for the
parties entitled thereto hereunder. Nothing in this Section shall prevent a
Secured Party from receiving and retaining payments (a) for the provision of
services to any Loan Party, or (b) in connection with any extension of credit or
other financial accommodation to any Loan Party if the obligations of such Loan
Party incurred in connection with such extension of credit or other financial
accommodation do not constitute Secured Obligations, or (c) as security for any
such extension of credit or other financial accommodation if the obligations of
such Loan Party incurred in connection with such services, extension of credit
or other financial accommodation do not constitute Secured Obligations, and if
such obligations are not incurred and such security is not given in breach of
the Financing Agreements (as defined in Section 6).
(c) If (a) at any time after the occurrence of an Acceleration and for so
long as such Acceleration is continuing, any Secured Party shall receive payment
(voluntary or involuntary) on account of any Secured Obligation (i) from or on
behalf of the Company or any Subsidiary or any guarantor of payment or
performance of any of the Secured Obligations, or (ii) pursuant to any turnover
or similar provision contained in any agreement evidencing or relating to
subordinated indebtedness of the Company or any Loan Party or other obligor, or
(b) at any time any Secured Party shall receive payment (voluntary or
involuntary) on account of any Secured Obligation by way of the exercise of any
right of setoff (or similar right) with respect to any assets (whether or not
such assets shall constitute Collateral) of any Loan Party or as a result of any
counterclaim, purchase of any participation by any Loan Party or otherwise, then
such payment, prepayment or repayment (herein, a "Secured Obligation Payment")
shall be deemed to be the proceeds of Collateral and shall be delivered to or
put in the custody, possession or control of the Collateral Agent by the Secured
Party receiving such Secured Obligation Payment for disposition or distribution
by the Collateral Agent in accordance with Section 3.
Any Secured Party receiving a Secured Obligation Payment that is required
pursuant to this Section to be turned over to the Collateral Agent for
application under Section 3 is deemed to have received such Secured Obligation
Payment solely as agent for the Secured Parties and the Collateral Agent, and
will immediately turn such Secured Obligation Payment, in the form received
except for the endorsement of such receiving party where appropriate, over to
the Collateral Agent, and until so turned over, will hold such Secured
Obligation Payment in trust for the Secured Parties and the Collateral Agent.
(d) Each Party shall execute and deliver such other documents and
instruments, in form and substance reasonably satisfactory to the other Parties,
and shall take such other action, in each case as any other Party may reasonably
have requested (at the cost and expense of the Company which, by countersigning
this Agreement, agrees to pay such reasonable costs and expenses), to effectuate
and carry out the provisions of this Agreement, including by recording or filing
in such places as the requesting party may deem desirable, this Agreement or
such other documents or instruments.
XII-8
(e) Each Secured Party agrees that to the extent either Credit Agreement is
amended in accordance with the terms of this Agreement and the Credit Agreements
to increase the commitments and/or Secured Obligations outstanding thereunder,
such Secured Obligations shall be entitled to share in the benefits of the
Guaranties and the Security Documents to the extent permitted under the
Financing Agreements.
(f) The Revolving Facility Agent agrees to deliver to the Term Facility
Agent upon execution thereof any amendment, waiver or modification of the
Revolving Credit Agreement, and the Term Facility Agent agrees to deliver to the
Revolving Facility Agent any amendment, waiver or modification of the Term Loan
Credit Agreement.
(g) Subject to clause (h) below, without further written consent or
authorization from Secured Parties, Collateral Agent may execute any documents
or instruments necessary to (a) release any Lien encumbering any item of
Collateral that is the subject of a sale or other disposition of assets
permitted by the Revolving Credit Agreement and the Term Loan Credit Agreement,
or to which Requisite Obligees have otherwise consented, or (b) release any
Subsidiary Guarantor from the Subsidiary Guaranty if all the capital stock or
other equity interests of such Subsidiary Guarantor is sold to any Person
pursuant to a sale or other disposition permitted under the Financing Agreements
or to which Requisite Obligees have otherwise consented; provided, however, that
nothing herein shall require or permit Collateral Agent to release any such
entity which prior to such sale is a Subsidiary Guarantor from the Subsidiary
Guaranty if any of the Financing Agreements require that such entity be party to
the Subsidiary Guaranty after such sale. Such termination and release shall be
without prejudice to the rights of the Collateral Agent to charge and be
reimbursed for any expenditure which it may incur in connection therewith. The
proceeds of any disposition of Collateral released in accordance with this
Section are not required to be delivered to the Collateral Agent or deposited in
the Collateral Accounts pursuant to Section 3.
(h) Any release of the Collateral by the Collateral Agent from the Liens
created by the Security Documents (other than in connection with the exercise of
remedies with respect to such Collateral under a Security Document pursuant to
instructions from Requisite Obligees) that is not permitted pursuant to the
Revolving Credit Agreement and the Term Loan Credit Agreement, or any release of
a Subsidiary by the Collateral Agent from the Subsidiary Guaranty that is not
permitted pursuant to the Revolving Credit Agreement and the Term Loan Credit
Agreement, shall require the prior written consent of the Requisite Obligees
(except for the release of all or substantially all of the Collateral, in which
case the prior written consent of all of the Revolving Facility Lenders and all
of the Term Facility Lenders are required; it being understood that an increase
in the amount of any Indebtedness of the Company secured ratably by the
Collateral shall not be deemed to be a release of the Collateral).
(i) Each of the Parties on its own behalf and on behalf of other Secured
Parties, and each of the Lender Counterparties, hereby covenants and agrees that
it (a) will not accept any guarantee of any of the Secured Obligations by any
Subsidiary or Affiliate of the Company unless such Subsidiary or Affiliate
guarantees the payment of all the Secured Obligations and (b) will not take any
security interest in or lien on any assets of the Company or any of its
Subsidiaries to secure the payment or performance of any of the Secured
Obligations unless Collateral Agent is granted (i) a first priority security
interest in or lien on behalf of Revolving Facility Lenders and the Lender
Counterparties and (ii) a second priority security
XII-9
interest in or lien on behalf of Term Facility Lenders, on such assets and the
instrument creating such lien becomes a Security Document for all purposes of
this Agreement.
(j) No Secured Party may require the Collateral Agent to take or refrain
from taking any action hereunder or under any of the Security Documents or with
respect to any of the Collateral except as and to the extent expressly set forth
in this Agreement.
Section 6. Disclaimers, Indemnity, Etc.
---------------------------
(a) The Collateral Agent shall have no duties or responsibilities to the
Secured Parties except those expressly set forth in this Agreement, the Security
Documents and the Guaranties and the Collateral Agent shall not by reason of
this Agreement, the Security Documents or the Guaranties be a trustee for any
Secured Party or have any other fiduciary obligation to any Secured Party
(including any obligation under the Trust Indenture Act of 1939, as amended).
The Collateral Agent shall not be responsible to any Secured Party for any
recitals, statements, representations or warranties contained in this Agreement,
the Revolving Credit Agreement, the Term Loan Credit Agreement, the Loan
Documents and the Hedge Agreements (as defined in each of the Revolving Credit
Agreement and the Term Loan Credit Agreement; collectively, the "Financing
Agreements") or in any certificate or other document referred to or provided for
in, or received by any of them under, any of the Financing Agreements, or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of any of the Financing Agreements or any other document referred to or provided
for therein or any Lien under the Security Documents or the perfection or
priority of any such Lien or the value or condition of the Collateral or the
title of the Loan Parties to the Collateral or for any failure by any Loan Party
to perform any of its obligations under any of the Financing Agreements. The
Collateral Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care. Neither the Collateral Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct.
(b) The Collateral Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telex, telecopy,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Company or any
Subsidiary of the Company), independent accountants and other experts selected
by the Collateral Agent. The Collateral Agent shall not be deemed to have
actual, constructive, direct or indirect notice or knowledge of the occurrence
of any Acceleration unless and until the Collateral Agent shall have received a
Notice of Acceleration. The Collateral Agent shall have no obligation
whatsoever either prior to or after receiving a Notice of Acceleration to
inquire whether an Acceleration has, in fact, occurred and shall be entitled to
rely conclusively, and shall be fully protected in so relying, on any Notice of
Acceleration certificate so furnished to it. As to any matters not expressly
provided for by this Agreement, the Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by Requisite Obligees, and such instructions of Requisite
Obligees, and any action taken or failure to act pursuant thereto, shall be
binding on all of the Secured Parties.
XII-10
(c) The Revolving Facility Lenders, the Term Facility Lenders and the
Lender Counterparties (by their acceptance of the benefits of this Agreement)
(collectively, the "Paying Indemnifying Parties") agree that such Secured
Parties shall indemnify the Collateral Agent, its Affiliates and their
respective directors, officers, employees and agents in its capacity as
Collateral Agent, ratably in accordance with the amount of the Secured
Obligations held by such Secured Parties to the extent neither reimbursed by any
Loan Party nor reimbursed out of any proceeds, recoveries or payments under any
Security Documents or the Guaranties, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against the Collateral Agent in any way relating to or arising
out of any of the Financing Agreements or any other document contemplated by or
referred to therein or the transactions contemplated thereby or the enforcement
of any of the terms of any thereof; provided, however, that no such Secured
-------- -------
Party shall be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Collateral Agent.
(d) The Collateral Agent shall, notwithstanding anything to the contrary in
Section 6(c) hereof, in all cases be fully justified in failing or refusing to
act hereunder unless it shall be further indemnified to its satisfaction by the
Parties against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.
(e) The Collateral Agent may deem and treat the payee of any promissory
note or other evidence of indebtedness relating to the Secured Obligations as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment or transfer thereof, signed by such payee and in form
satisfactory to the Collateral Agent, shall have been filed with the Collateral
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
such note or other evidence of indebtedness shall be conclusive and binding on
any subsequent holder, transferee or assignee of such note or other evidence of
indebtedness and of any note or notes or other evidences of indebtedness issued
in exchange therefor.
(f) Except as expressly provided herein, in the Security Documents or in
the Guaranties, the Collateral Agent shall have no duty to take any affirmative
steps with respect to the collection of amounts payable in respect of the
Collateral or under the Guaranties. The Collateral Agent shall incur no
liability (absent gross negligence or willful misconduct) as a result of any
sale of any Collateral at any private sale.
(g) (i) The Collateral Agent may resign at any time by giving at least 30
days notice thereof to the Parties (such resignation to take effect as
hereinafter provided) and the Collateral Agent may be removed as Collateral
Agent at any time by Requisite Obligees. In the event of any such resignation
or removal of the Collateral Agent, Requisite Obligees shall thereupon have the
right to appoint a successor Collateral Agent which appointment shall, unless an
Event of Default has occurred and is continuing, be subject to the approval of
the Company. If no successor Collateral Agent shall have been so appointed by
Requisite Obligees and shall have accepted such appointment within 30 days after
the notice of the intent of the Collateral Agent to resign, then the retiring
Collateral Agent may, on behalf of the other Parties, appoint a successor
Collateral Agent. Any successor Collateral Agent appointed pursuant to this
clause (i) shall be a bank party to the Revolving Credit Agreement or the Term
Loan Credit Agreement or subject to the consent of Company (such consent not to
be unreasonably withheld) a commercial bank organized
XII-11
under the laws of the United States of America or any state thereof and having a
combined capital and surplus of at least $500,000,000.
(ii) Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Collateral Agent, and the retiring or
removed Collateral Agent shall thereupon be discharged from its duties and
obligations hereunder. After any retiring or removed Collateral Agent's
resignation or removal hereunder as Collateral Agent, the provisions of this
Section 6 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Collateral Agent.
Section 7. Definitions.
-----------
"Acceleration" shall mean any of the Revolving Credit Agreement Obligations
or the Term Loan Credit Agreement Obligations have been declared, or have
become, immediately due and payable, or the commitments to extend credit of the
Revolving Facility Lenders or the Term Facility Lenders shall have been
terminated under Section 8 or Section 7 of the Revolving Credit Agreement or the
Term Loan Credit Agreement, respectively.
"Actionable Default" shall mean (i) any failure of the Company to pay upon
its final stated maturity, the Revolving Credit Agreement Obligations or the
Term Loan Credit Agreement Obligations or (ii) any breach or default by the
Company under the Revolving Credit Agreement or the Term Loan Credit Agreement
if the effect of such breach or default is to cause, or to permit the Revolving
Facility Lenders or the Term Facility Lenders then to cause the Revolving Credit
Agreement Obligations or the Term Loan Credit Agreement Obligations to become or
be declared due prior to their stated maturity.
"Class" shall mean each class of lenders under the Revolving Credit
Agreement and the Term Loan Credit Agreement, with there being two separate
classes of lenders, i.e., (i) lenders under the Revolving Credit Agreement and
(ii) the lenders under the Term Loan Credit Agreement.
"Collateral" shall mean all the properties and assets of whatever nature,
tangible or intangible, now owned or existing or hereafter acquired or arising,
of any of the Loan Parties on or in which the Collateral Agent has been granted
a Lien pursuant to any of the Security Documents.
"Collateral Agent Obligations" shall mean all indemnity, reimbursement and
payment obligations of the Company and any Subsidiary to the Collateral Agent
under this Agreement, any Security Document or the Guaranties.
"Event of Default" shall mean any "Event of Default" as defined in any
Financing Agreement or the occurrence of an Event of Default in which Company is
the Defaulting Party and which results in the designation of an Early
Termination Date (as such terms are defined in a Master Agreement or an Interest
Rate Swap Agreement or Interest Rate Agreement in the form prepared by the
International Swap and Derivatives Association Inc. or a similar event under any
similar swap agreement) under any Hedge Agreement.
XII-12
"Hedge Agreement Obligations" shall mean all obligations of every nature of
Company from time to time owed to Lender Counterparties or any of them under
Hedge Agreements, including without limitation payments for early termination
thereof.
"Notice of Acceleration" shall mean a notice by the Revolving Facility
Agent in the case of the Revolving Facility Lenders or the Term Facility Agent
in case of Term Facility Lenders, in each case delivered to the Collateral Agent
stating that an Acceleration has occurred.
"Requisite Obligees" shall mean (i) until payment in full of all Revolving
Credit Agreement Obligations and termination of any commitment with respect
thereto, the Requisite Revolving Facility Lenders, (ii) on or after the payment
in full of all Revolving Credit Agreement Obligations and termination of any
commitments with respect thereto, the Requisite Term Facility Lenders, and (iii)
after payment in full of all Revolving Credit Agreement Obligations and all Term
Loan Credit Agreement Obligations and termination of any commitments with
respect thereto, the holders of a majority of the aggregate notional amount (or,
with respect to any Hedge Agreement that has been terminated in accordance with
its terms, the amount then due and payable (exclusive of expenses and similar
payments but including any early termination payments then due) under such Hedge
Agreement) under all Hedge Agreements.
"Requisite Revolving Facility Lenders" shall mean "Requisite Lenders" as
defined in the Revolving Credit Agreement.
"Requisite Term Facility Lenders" shall mean "Requisite Lenders" as defined
in the Term Loan Credit Agreement.
"Revolving Credit Agreement Obligations" shall mean all obligations of
every nature of Company and its Subsidiaries from time to time owed to Revolving
Facility Agent, the Revolving Facility Lenders, the Issuing Lender or any of
them under the Loan Documents (as defined in the Revolving Credit Agreement),
including, without limitation, the L/C Obligations.
"Secured Obligations" shall mean the Revolving Credit Agreement
Obligations, the Term Loan Credit Agreement Obligations and the Hedge Agreement
Obligations.
"Term Loan Credit Agreement Obligations" shall mean all obligations of
every nature of Company and its Subsidiaries from time to time owed to the Term
Facility Lenders, the Term Facility Agent or any of them under the Loan
Documents (as defined in the Term Loan Credit Agreement).
Section 8. Miscellaneous.
-------------
(a) All notices and other communications provided for herein shall be in
writing and may be personally served, telecopied, telexed or sent by United
States mail and shall be deemed to have been given when delivered in person,
upon receipt of telecopy or telex, or four Business Days after deposit in the
United States mail, registered or certified, with postage prepaid and properly
addressed. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 8(a)) shall
be as set forth under each party's name on the signature pages hereof.
XII-13
(b) This Agreement, the Security Documents and the Guaranties may be
modified or waived only by an instrument or instruments in writing signed by
Collateral Agent and Requisite Obligees and, if applicable, the Loan Party
signatory to this Agreement or any such Collateral Document.
(c) This Agreement shall be binding upon and inure to the benefit of the
Collateral Agent, each other Party and each Secured Party and their respective
successors and assigns.
(d) This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
(e) This Agreement shall become effective as to the Revolving Facility
Lenders and the Revolving Facility Agent upon execution thereof by Revolving
Facility Agent and as to the Term Facility Lenders and the Term Facility Agent
upon execution by Term Facility Agent thereof.
(f) Upon receipt by the Collateral Agent of evidence satisfactory to it of
the termination of all commitments to extend credit which would constitute
Secured Obligations and the indefeasible payment in full of all Secured
Obligations (including, without limitation, the reasonable compensation,
expenses and disbursements of the Collateral Agent) and expiration or
cancellation of all Letters of Credit, this Agreement shall terminate and the
Collateral Agent, at the request and expense of the Company, will execute and
deliver to the Company a proper instrument or instruments acknowledging the
satisfaction and termination of the Collateral Documents and of this Agreement,
and will duly assign, transfer and deliver to the Company all of the rights and
moneys at the time held by the Collateral Agent under the Collateral Documents
and hereunder, provided that Section 6(c) of this Agreement shall survive, and
remain operative and in full force and effect, regardless of the termination of
this Agreement.
(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
(h) By countersigning or otherwise accepting the terms of this Agreement,
the Company and each other Loan Party acknowledges and consents to and agrees to
perform and be bound by each of the provisions hereof stated to be applicable to
it.
(i) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY, COLLATERAL
AGENT AND ANY PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUN-DER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH LOAN PARTY, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
XII-14
COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH LOAN PARTY AT
ITS ADDRESSES PROVIDED ON THE APPLICABLE SIGNATURE PAGE HERETO; (IV) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER SUCH LOAN PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES
THAT COLLATERAL AGENT RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH LOAN PARTY IN THE COURTS
OF ANY OTHER JURISDICTION; AND (VI) AGREE THAT THE PROVISIONS OF THIS SECTION
8(i) RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
(j) EACH LOAN PARTY, COLLATERAL AGENT AND EACH PARTY HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each Loan Party, Collateral Agent and each Party acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each Loan Party, Collateral Agent and each Party further warrants and represents
that it has reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 8(j) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
XII-15
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first written above.
LOAN PARTIES:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL INTERNATIONAL, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL SALES AND LEASING, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By:
----------------------------------------
Name:
XII-16
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDINGS CAPITAL CORPORATION
By:
----------------------------------------
Name:
Title:
ACR MANAGEMENT LLC
By:
----------------------------------------
Name:
Title:
Notice Address:
--------------------------------------------
--------------------------------------------
--------------------------------------------
with a copy to:
▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone: (617) 572-
(617) 572-
Facsimile: (617) 572-
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
XII-17
Attention:
Telephone:
Facsimile:
XII-18
FLEET NATIONAL BANK,
as Collateral Agent, Revolving Facility
Agent and Term Facility Agent
By:
----------------------------------------
Name:
Title:
Notice Address:
--------------------------------------------
--------------------------------------------
--------------------------------------------
XII-19
EXHIBIT XIII
[FORM OF PLEDGE AND SECURITY AGREEMENT]
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT, dated as of July 22, 1998, is entered
into by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P., a Pennsylvania limited partnership
("Company"), EACH OF THE UNDERSIGNED (INCLUDING COMPANY), as a grantor, whether
as an original signatory hereto or as an Additional Grantor (as herein defined)
(each, a "Grantor") and FLEET NATIONAL BANK ("Fleet"), as collateral agent (in
such capacity, "Collateral Agent") for Secured Parties (as such term is herein
defined).
RECITALS
WHEREAS, Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P. ("Holdings"), the
financial institutions from time to time parties thereto (the "CA Lenders")
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. ("GSCP"), as Arranger and Syndication Agent
(in such capacity, "CA Syndication Agent"), Collateral Agent, Fleet, as
Administrative Agent (in such capacity, "CA Administrative Agent"), and DLJ
Capital Funding, Inc. ("DLJ"), as Documentation Agent (in such capacity, "CA
Documentation Agent") have entered into a Credit Agreement of even date herewith
(as it may be from time to time amended, supplemented or otherwise modified, the
"Credit Agreement") pursuant to which the CA Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company;
WHEREAS, Company, Holdings, the financial institutions from time to time
parties thereto (the "Term Lenders") GSCP, as Arranger and Syndication Agent (in
such capacity, "Term Syndication Agent"), Collateral Agent, Fleet, as
Administrative Agent (in such capacity, "Term Administrative Agent"), and DLJ,
as Documentation Agent (in such capacity, "Term Documentation Agent") have
entered into a Term Loan Agreement of even date herewith (as it may be from time
to time amended, supplemented or otherwise modified, the "Term Loan Agreement";
the Revolving Credit Agreement and the Term Loan Agreement, (each, a "Financing
Agreement") pursuant to which Term Lenders have made certain commitments,
subject to the terms and conditions set forth in the Term Loan Agreement, to
extend certain credit facilities to Company;
WHEREAS, pursuant to Section 6.10 of the Credit Agreement, Company may
enter into one or more Interest Rate Agreements (collectively, the "Hedge
Agreements") with one or more Lenders or Affiliates thereof (in such capacity,
collectively, "Lender Counterparties"; the Lender Counterparties, the CA
Lenders, the CA Syndication Agent, the CA Administrative Agent, the CA
Documentation Agent, the Term Lenders, the Term Syndication Agent, the Term
Administrative Agent, and the Term Documentation Agent each being a "Secured
Party");
WHEREAS, in consideration of the extensions of credit and other
accommodations of CA Lenders, Term Lenders and Lender Counterparties as set
forth in the Financing Agreements and the Hedge Agreements, respectively, each
Grantor has agreed, subject to the terms and conditions hereof, each other
XIII-1
Loan Document and each of the Hedge Agreements, to secure such Grantor's
obligations under the Financing Agreements, the other Loan Documents and the
Hedge Agreements party thereto as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and Collateral Agent
agree as follows:
SECTION 1. DEFINED TERMS AND INTERPRETATION
1.1. Defined Terms. Capitalized terms used herein, including the recitals
-------------
hereto, not otherwise defined herein shall have the meanings ascribed thereto in
the Financing Agreements. In addition, the following terms shall have the
following meanings:
"Acceleration" shall mean any of the Credit Agreement Obligations or the
Term Loan Agreement Obligations have been declared, or have become, immediately
due and payable, or the commitments to extend credit of the CA Lenders or the
Term Lenders shall have been terminated under Section 8 of the Credit Agreement
or Section 7 of the Term Loan Agreement, respectively.
"Agreement" means this Pledge and Security Agreement dated as of July 22,
1998, as it may be amended, supplemented or otherwise modified from time to
time.
"CA Commitments" shall mean the "Commitments" as defined in the Credit
Agreement. "CA Obligations" shall mean the "Obligations" as defined in the
Credit Agreement. "Commitments" means the CA Commitments and the Term
Commitments.
"Event of Default" means any "Event of Default" as defined in any Financing
Agreement or the occurrence of an Event of Default in which Company is the
Defaulting Party and which results in the designation of an Early Termination
Date (as such terms are defined in a Master Agreement or an Interest Rate Swap
Agreement or Interest Rate Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Hedge Agreement.
"Financing Agreement Obligations" means CA Obligations and Term
Obligations.
"Hedge Agreement Obligations" means all obligations of any nature of
Company from time to time owed to Lender Counterparties or any of them under
Hedge Agreements, including without limitation payments for early termination
thereof.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of
July 22, 1998, by and among CA Administrative Agent, Term Administrative Agent
and Collateral Agent, as amended, supplemented or modified from time to time in
accordance with the terms thereof.
XIII-2
"Loan" means any "Loan" as defined in any Financing Agreement.
"Loan Document" means any "Loan Document" as defined in any Financing
Agreement.
"Requisite Obligees" means "Requisite Obligees" as defined in the
Intercreditor Agreement.
"Term Commitments" shall mean the "Commitments" as defined in the Term
Loan Agreement.
"Term Obligations" shall mean the "Obligations" as defined in the Term
Loan Agreement.
1.2 Interpretation. References to "Sections" and "subsections" shall be
--------------
to Sections and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
SECTION 2. GRANT OF SECURITY
2.1. Senior Grant. To secure the timely payment and performance of the CA
------------
Obligations and the Hedge Agreement Obligations, each Grantor does hereby assign
to and grant a security interest in, in favor of the Collateral Agent, on behalf
of and for the benefit of the CA Lenders and the Lender Counterparties, all the
estate, right, title and interest of such Grantor, whether now owned or
hereafter acquired or arising and wheresoever located, whether or not of a type
which may be subject to a security interest under the UCC, in, to and under the
following, in each case whether now or hereafter existing or in which such
Grantor now has or hereafter acquires an interest and wherever the same may be
located (being referred to herein collectively as the "Collateral"):
(a) all "Investment Property", which term means:
(i) all right, title and interest of such Grantor, whether now owned or
hereafter acquired, in all shares of capital stock owned by such Grantor,
including without limitation, all shares of capital stock described on
Schedule 2.1(a), and the certificates representing such shares and any
---------------
interest of such Grantor in the entries on the books of any financial
intermediary pertaining to such shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares (all of the foregoing being referred to
herein collectively as the "Pledged Stock");
(ii) all right, title and interest of such Grantor, whether now owned
or hereafter acquired, of all Indebtedness owed to such Grantor, including,
without limitation, all Indebtedness described on Schedule 2.1(a), issued
---------------
by the obligors named therein, the instruments evidencing such
Indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Indebtedness (all of the
foregoing being referred to herein collectively as the "Pledged Debt");
(iii) all of such Grantor's right, title and interest as a limited
and/or general partner in all partnerships, including, without limitation,
the partnerships described on Schedule 2.1(a) (the "Partnerships"), whether
---------------
now owned or hereafter acquired, including, without limitation, all of
XIII-3
such Grantor's right, title and interest in, to and under the partnership
agreements described on Schedule 2.1(a) (as such agreements have heretofore
------------------
been and may hereafter be amended, restated, supplemented or otherwise
modified from time to time, collectively, the "Partnership Agreements") to
which it is a party (including, if such Grantor is a general partner of any
Partnership, the right to vote with respect to and to manage and administer
the business of such Partnership) together with all other rights,
interests, claims and other property of such Grantor in any manner arising
out of or relating to its limited and/or general partnership interest in
the Partnerships, whatever their respective kind or character, whether they
are tangible or intangible property, and wheresoever they may exist or be
located, and further including, without limitation, (1) all of the rights
of such Grantor as a limited and/or general partner: (A) (I) to receive
money due and to become due (including without limitation dividends,
distributions, interest, income from partnership properties and operations,
proceeds of sale of partnership assets and returns of capital) under or
pursuant to the Partnership Agreements, (II) to receive payments upon
termination of the Partnership Agreements, and (III) to receive any other
payments or distributions, whether cash or noncash, in respect of such
Grantor's limited and/or general partnership interest evidenced by the
Partnership Agreements; (B) in and with respect to claims and causes of
action rising out of or relating to the Partnerships; and (C) to have the
access to the Partnerships' books and records and to other information
concerning or affecting the Partnerships; and (2) any "certificate of
interest" or "certificates of interest" (or other certificates or
instruments however designated or titled) issued by the Partnerships and
evidencing such Grantor's interest as a limited and/or general partner in
the Partnerships (collectively, the "Certificates" and any interest of such
Grantor in the entries on the books of any financial intermediary
pertaining to such Grantor's interest as a limited and/or general partner
in the Partnership (all of the foregoing being referred to herein
collectively as the "Partnership Interests");
(iv) all of such Grantor's right, title and interest as a member of
all limited liability companies (the "LLCs"), including, without
limitation, all of such Grantor's right, title and interest in, to and
under the limited liability company interests set forth on Schedule 2.1(a),
---------------
whether now owned or hereafter acquired, including, without limitation, all
of such Grantor's right, title and interest in, to and under the operating
agreements with respect to any such LLC (as such agreements have heretofore
been and may hereafter be amended, restated, supplemented or otherwise
modified from time to time, collectively, each, an "LLC Agreement") to
which it is a party, regardless of whether such right, title and interest
arises under such LLC Agreement, including (1) all rights of such Grantor
to receive distributions of any kind, in cash or otherwise, due or to
become due under or pursuant to each such LLC Agreement or otherwise in
respect of such Person, (2) all rights of such Grantor to receive proceeds
of any insurance, indemnity, warranty or guaranty with respect to each such
Person, (3) all claims of such Grantor for damages arising out of, or for
the breach of, or for a default under, each such LLC Agreement, (4) any
certificated or uncertificated security evidencing any of the foregoing
issued by such Person to such Grantor and (5) to the extent not included in
the foregoing, all proceeds of any and all of the foregoing (all of the
foregoing being referred to herein collectively as the "LLC Interests"; the
Pledged Stock, the Pledged Debt, the Partnership Interests and the LLC
Interests being herein collectively referred to as the "Pledged
Securities"; provided, in any event, the term "Pledged Securities" shall
not include any Securities with respect to Excluded Subsidiaries;
XIII-4
(v) all additional shares of, limited and/or general partnership
interests in and limited liability company interests in, and all securities
convertible into and warrants, options and other rights to purchase or
otherwise acquire, stock of any issuer of the Pledged Stock, limited and/or
general partnership interests in the Partnerships, and limited liability
company interests in the LLCs, from time to time acquired by such Grantor
in any manner (which shares or interests shall be deemed to be part of the
Pledged Securities), the certificates or other instruments representing
such additional shares or interests, securities, warrants, options or other
rights and any interest of such Grantor in the entries on the books of any
financial intermediary pertaining to such additional shares or interests,
and all additional indebtedness from time to time owed to such Grantor by
any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness; (all of the
foregoing being referred to herein collectively as the "Additional Pledged
Securities"), and all dividends, distributions, cash, warrants, rights,
instruments, payments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Additional Securities; and
(vi) all shares of, limited and/or general partnership interests in,
and limited liability company interests in, and all securities convertible
into and warrants, options and other rights to purchase or otherwise
acquire, stock of, limited and/or general partnership interests in, or
limited liability company interests in any Person that, after the date of
this Agreement, becomes, as a result of any occurrence, a direct Subsidiary
of such Grantor (which shares or interests shall be deemed to be part of
the Pledged Securities), the certificates or other instruments representing
such shares, interests, securities, warrants, options or other rights and
any interest of such Grantor in the entries on the books of any financial
intermediary pertaining to such shares or interests and all dividends,
distributions, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares, interests,
securities, warrants, options or other rights, and all Indebtedness from
time to time owed to such Grantor by any Person that, after the date of
this Agreement, becomes, as a result of any occurrence, a Subsidiary of
such Grantor, and the instruments evidencing such Indebtedness, and all
interest, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Indebtedness;
(b) the restricted deposit account established and maintained by Collateral
Agent pursuant to Section 8.4 (the "Collateral Account"), together with all
-----------
amounts on deposit from time to time in such deposit accounts; and all interest,
cash, instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing;
(c) all "Intellectual Property", which term means:
(i) all trademarks, service marks, designs, logos, indicia,
tradenames, corporate names, company names, business names, fictitious
business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned or used by such
Grantor in its business, or hereafter adopted and used, including,
without limitation, the Trademarks specifically identified in
Schedule 2.1(c) (all of the foregoing being referred to herein
---------------
collectively as the
XIII-5
"Trademarks"), all registrations that have been or may hereafter be issued
or applied for thereon in the United States and any state thereof and in
certain foreign countries, including, without limitation, the registrations
specifically identified in Schedule 2.1(c) (all of the foregoing being
---------------
referred to herein collectively as the "Trademark Registrations"), all
common law and other rights (but in no event any of the obligations) in and
to the Trademarks in the United States and any state thereof and in certain
foreign countries (all of the foregoing being referred to herein
collectively as the "Trademark Rights"), and all goodwill of such Grantor's
business symbolized by the Trademarks and associated therewith (all of the
foregoing being referred to herein collectively as the "Associated
Goodwill"):
(ii) all patents and patent applications and rights and interests in
patents and patent applications under any domestic law that are presently,
or in the future may be, owned by such Grantor and all patents and patent
applications and rights and interests in patents and patent applications
under any domestic law that are presently, or in the future may be, held or
used by such Grantor in whole or in part, including, without limitation,
the patents and patent applications listed in Schedule 2.1(c), all rights
---------------
(but not obligations corresponding thereto), including, without limitation,
the right (but not the obligation, and exercisable only upon the occurrence
and continuation of an Event of Default) to ▇▇▇ for past, present and
future infringements in the name of such Grantor or in the name of
Collateral Agent or Secured Parties, and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof (all
of the foregoing being collectively referred to as the "Patents"); it being
understood that the rights and interest included herein hereby shall
include, without limitation, all rights and interests pursuant to licensing
or other contracts in favor of such Grantor pertaining to patent
applications and patents presently or in the future owned or used by third
parties but, in the case of third parties which are not Affiliates of
Grantor, only to the extent permitted by such licensing or other contracts
and, if not so permitted, only with the consent of such third parties; and
(iii) various published and unpublished works of authorship
including, without limitation, computer programs, computer data bases,
other computer software, including without limitation, object code and
source code, mask works, semiconductor chips, masks, cell libraries,
layouts, trade secrets, trade secret rights, trade dress rights, ideas,
drawings, designs, schematics, algorithms, writings, techniques, processes
and formulas, including, without limitation, the works listed on Schedule
--------
2.1(c) (all of the foregoing being referred to herein collectively as the
------
"Copyrights"), all copyright registrations issued to such Grantor and
applications for copyright registration that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof
and in certain foreign countries, including, without limitation, the
registrations listed on Schedule 2.1(c) (all of the foregoing being
--------------
referred to herein collectively as the "Copyright Registrations"), all
common law and other rights in and to the Copyrights in the United States
and any state thereof and in certain foreign countries including all
copyright licenses (but with respect to such copyright licenses, only to
the extent permitted by such licensing arrangements) (all of the foregoing
being referred to herein collectively as the "Copyright Rights"),
including, without limitation, each of the Copyrights, rights, titles and
interests in and to the Copyrights and works protectable by copyright,
which are presently, or in the future may be, owned, created (as a work for
hire for the benefit of such Grantor), authored (as a work for hire for the
benefit of such Grantor), acquired or used (whether pursuant to a license
or otherwise but
XIII-6
only to the extent permitted by agreements governing such license or other
use) by such Grantor, in whole or in part, and all Copyright Rights with
respect thereto and all Copyright Registrations therefor, heretofore or
hereafter granted or applied for, and all renewals and extensions thereof,
throughout the world, including all proceeds thereof (such as, by way of
example and not by limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to renew and extend
such Copyrights, Registrations and Copyright Rights and to register works
protectable by copyright and the right (but not the obligation and
exercisable only upon the occurrence and continuation of an Event of
Default) to ▇▇▇ or bring opposition or cancellation proceedings in the name
of such Grantor or in the name of Collateral Agent or Secured Parties for
past, present and future infringements of the Copyrights and Copyright
Rights;
(d) all of such Grantor's right, title and interest in, to and under any
equipment in all of its forms, including, without limitation, the Cranes and
Lifting Equipment listed on Schedule 2.1(d)A and the Trucks and Trailers listed
----------------
on Schedule 2.1(d)B, all accessions or additions thereto, all parts thereof,
----------------
whether or not at any time of determination incorporated or installed therein or
attached thereto, and all replacements therefor, wherever located, now or
hereafter existing (all of the foregoing being referred to herein collectively
as the "Equipment");
(e) all of such Grantor's right, title and interest in, to and under any
inventory in all of its forms, including, but not limited to, (i) all goods held
by such Grantor for sale or lease or to be furnished under contracts of service
or so leased or furnished, (ii) all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in such Grantor's business, (iii) all goods in which
such Grantor has an interest in mass or a joint or other interest or right of
any kind, (iv) all goods which are returned to or repossessed by such Grantor,
and all accessions thereto and products thereof, and (v) all negotiable and non-
negotiable documents of title, including, without limitation, warehouse
receipts, dock receipts and bills of lading issued by any Person covering any of
the foregoing (all of the foregoing being referred to herein collectively as the
"Inventory");
(f) all of such Grantor's right, title and interest in, to and under any
accounts, contract rights, chattel paper, documents, instruments, general
intangibles and other rights and obligations of any kind (all of the foregoing
being referred to herein collectively as the "Accounts") and all of such
Grantor's rights in, to and under all security agreements, leases and other
contracts securing or otherwise relating to any Accounts (all of the foregoing
being referred to herein collectively as the "Related Contracts");
(g) all of such Grantor's right, title and interest in, to and under all
agreements and contracts to which such Grantor is a party as of the date
hereof, including, without limitation, each Material Contract, or to which
such Grantor becomes a party after the date hereof, as each such agreement
may be amended, supplemented or otherwise modified from time to time (all
of the foregoing being referred to herein collectively as the "Assigned
Agreements"), including (i) all rights of such Grantor to receive moneys
due or to become due under or pursuant to the Assigned Agreements, (ii) all
rights of such Grantor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Assigned Agreements, (iii) all
claims of such Grantor for damages arising out of any breach of or default
under the Assigned Agreements, and (iv) all rights of such Grantor to
terminate, amend, supplement, modify or exercise rights
XIII-7
or options under the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(h) to the extent not otherwise included in any other paragraph of this
Section 2, all other general intangibles, including tax refunds, rights to
---------
payment or performance, choses in action and judgments taken on any rights or
claims included in the Collateral;
(i) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(j) to the extent not covered by Sections 2.1(a) through 2.1(i), all other
--------------- ------
personal property of such Grantor, all proceeds, products, rents and profits of
or from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Collateral Agent is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
2.2. ▇▇▇▇▇▇ ▇▇▇▇▇. To secure the timely payment and performance of the
------------
Term Obligations, each Grantor does hereby assign to and grant a security
interest in, in favor of the Collateral Agent, on behalf of and for the benefit
of the Term Lenders, all the estate, right, title and interest of such Grantor,
whether now owned or hereafter acquired or arising and wheresoever located,
whether or not of a type which may be subject to a security interest under the
UCC, in, to and under the Collateral; provided, such assignment and grant shall
--------
b e junior and subordinate to the assignment and grant in the Collateral made
pursuant to Section 2.1.
-----------
2.3. No Breach. Notwithstanding anything herein to the contrary, in no
---------
event shall the Collateral include, and no Grantor shall be deemed to have
granted a security interest in, any of such Grantor's rights or interests in any
license, contract or agreement to which such Grantor is a party or any of its
rights or interests thereunder to the extent, but only to the extent, that such
a grant would, under the terms of such license, contract or agreement or
otherwise, result in a breach of the terms of, or constitute a default under any
license, contract or agreement to which such Grantor is a party (other than to
the extent that any such term would be rendered ineffective pursuant to Section
9-318(4) of the Uniform Commercial Code of any relevant jurisdiction or any
other applicable law (including the Bankruptcy Code) or principles of equity);
provided, immediately upon the ineffectiveness, lapse or termination of any such
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provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
SECTION 3. SECURITY FOR OBLIGATIONS
This Agreement secures, and the Collateral is collateral security for, the
prompt payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of
XIII-8
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
(S)362(a)), of all obligations and liabilities of every nature, of each Grantor
now or hereafter existing under or arising out of or in connection with any
Financing Agreement, any other Loan Document or any Hedge Agreement and all
extensions or renewals of any of the foregoing, whether for principal, interest
(including without limitation interest that, but for the filing of a petition in
bankruptcy with respect to any Grantor, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, payments for early
termination of Hedge Agreements, fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Collateral Agent or any Secured Party as a
preference, fraudulent transfer or otherwise and all obligations of every nature
of each Grantor now or hereafter existing under this Agreement (all of the
foregoing being referred to herein collectively as the "Secured Obligations").
SECTION 4. GRANTORS REMAIN LIABLE
4.1. Continuing Liability. Anything contained herein to the contrary
--------------------
notwithstanding, (a) each Grantor shall remain liable under any Partnership
Agreement, LLC Agreement or any other contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed; (b) the exercise by Collateral Agent of any of its rights hereunder
shall not release any Grantor from any of its duties or obligations under any
Partnership Agreement, LLC Agreement or other the contracts and agreements
included in the Collateral; and (c) Collateral Agent shall not have any
obligation or liability under any Partnership Agreement, LLC Agreement or any
other contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Collateral Agent be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
4.2. No Obligations of Collateral Agent. Notwithstanding anything herein
----------------------------------
to the contrary, this Agreement shall not in any way be deemed to obligate
Collateral Agent, any Secured Party or any purchaser at a foreclosure sale under
this Agreement to assume any of any Grantor's obligations, duties, expenses or
liabilities under any LLC Agreement or Partnership Agreement (including any
Grantor's obligations as a general partner for the debts and obligations of a
Partnership) and to manage the business and affairs of any Partnership or any of
such Grantor's obligations for the debts and obligations of an LLC, or under any
and all other agreements now existing or hereafter drafted or executed
(collectively, the "Grantor Obligations") unless Collateral Agent, any Secured
Party or any such purchaser otherwise expressly agrees in writing to assume any
or all of said Grantor Obligations. In the event of foreclosure by Collateral
Agent, each Grantor shall remain bound and obligated to perform its Grantor
Obligations arising during or otherwise related to its ownership of the
Collateral, and neither Collateral Agent nor any Secured Party shall be deemed
to have assumed any of such Grantor Obligations except as provided in the
preceding sentence. Without limiting the generality of the foregoing, neither
the grant of the security interest in the Collateral in favor of Collateral
Agent as provided herein nor the exercise by Collateral Agent of any of its
rights hereunder nor any action by Collateral Agent in connection with a
foreclosure on the Collateral
XIII-9
shall be deemed to constitute Collateral Agent or any Secured Party a partner of
any Partnership or a member of any LLC; provided, in the event Collateral Agent
--------
or any purchaser of Collateral at a foreclosure sale elects to become a
substituted general partner of any Partnership or manager of any LLC in place of
any Grantor, Collateral Agent or such purchaser, as the case may, shall adopt in
writing the applicable Partnership Agreement or LLC Agreement, as the case may
be, and agree to be bound by the terms and provisions thereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1. Generally. Each Grantor represents and warrants that each of the
---------
representation and warranties set forth in Section 5.16 of the Revolving Credit
------------
Agreement and Section 4.16 of the Term Loan Agreement are true and correct with
------------
respect to each item of Collateral applicable thereto owned by such Grantor as
if fully set forth herein.
5.2. Investment Property. In addition to any other representation made
-------------------
thereby in Section 5.1 hereof, each Grantor represents and warrants as follows:
-----------
(a) all of the Pledged Stock has been duly authorized and validly issued
and are fully paid and non-assessable;
(b) the Pledged Securities constitute all of the issued and outstanding
equity Securities of each issuer thereof that are owned by such Grantor, and
there are no outstanding warrants, options or other rights to purchase, or other
agreements outstanding with respect to, or property that is now or hereafter
convertible into, or that requires the issuance or sale of, any of the Pledged
Securities;
(c) all of the Pledged Debt has been duly authorized, authenticated or
issued, and delivered and is the legal, valid and binding obligation of the
issuers thereof and is not in default and constitutes all of the issued and
outstanding intercompany Indebtedness evidenced by a promissory note of the
respective issuers thereof owing to such Grantor;
(d) the security interest of Collateral Agent hereunder has been registered
on the books and records of any issuer of "uncertificated securities" (as such
term is defined in the UCC) included in the Collateral; and
(e) with respect to any Investment Property, no consent of any Person,
including any other limited or general partner of the Partnerships, any other
member of any LLC, or any creditor of any Grantor, and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by any Grantor
of the security interests granted hereby, (ii) the execution, delivery or
performance of this Agreement by any Grantor, or (iii) the perfection of or the
exercise by Collateral Agent of its rights and remedies hereunder (except as may
have been taken by or at the direction of any Grantor).
5.3. Intellectual Property. In addition to the representations and
---------------------
warranties made thereby in Section 5.1 hereof, each Grantor represents and
-----------
warrants as follows:
XIII-10
(a) a true and complete list of all Trademark Registrations and Trademark
applications owned, held (whether pursuant to a license or otherwise) or
licensed for use by such Grantor, in whole or in part, as of the date of this
Agreement is set forth in Schedule 2.1(c);
---------------
(b) a true and complete list of all Patents owned, held (whether pursuant
to a license or otherwise) or licensed for use by such Grantor, in whole or in
part, as of the date of this Agreement is set forth in Schedule 2.1(c);
---------------
(c) a true and complete list of all Copyright Registrations and
applications for Copyright Registrations held (whether pursuant to a license or
otherwise) or licensed for use by such Grantor, in whole or in part, as of the
date of this Agreement is set forth in Schedule 2.1(c);
---------------
(d) after inquiry, no Grantor is aware of any pending or threatened claim
by any third party that any of the Intellectual Property that is materially
necessary for the operation of the business of any Grantor ("Material
Intellectual Property") owned, held or used by such Grantor is invalid or
unenforceable; and
(e) except as required hereby or permitted under the Financing Agreements,
no effective security interest or other Lien covering all or any part of the
Intellectual Property is on file in the United States Patent and Trademark
Office or the United States Copyright Office.
5.4. Location of Equipment and Inventory. In addition to the
-----------------------------------
representations and warranties made thereby in Section 5.1 hereof, and subject
-----------
to any qualification set forth in either Financing Agreement with respect to the
location of any item of Equipment, each Grantor represents and warrants that all
of the Equipment and Inventory is, as of the date hereof, located in the
jurisdictions specified in Schedule 5.4.
------------
5.5. Office Locations; Other Names. In addition to the representations
-----------------------------
and warranties made thereby in Section 5.1 hereof, each Grantor represents and
-----------
warrants that as of the date hereof the chief place of business, the chief
executive office and the office where such Grantor keeps its records regarding
the Accounts and all originals of all chattel paper that evidence Accounts is,
and has been for the four month period preceding the date hereof, located at the
places indicated on Schedule 5.5, and no Grantor has in the past twelve months,
------------
and does not now do, business under any other name (including any trade-name or
fictitious business name) except for those names set forth on Schedule 5.5.
------------
SECTION 6. FURTHER ASSURANCES
6.1. Generally. Each Grantor agrees that from time to time, at the
---------
expense of such Grantor, such Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Collateral Agent may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral, subject in any event to
Section 6.9 of the Revolving Credit Agreement and Section 5.9 of the Term Loan
----------- -----------
Credit Agreement. Without limiting the generality of the foregoing, each Grantor
will (a) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary,
or as Collateral Agent may reasonably request, in order to perfect and preserve
the security
XIII-11
interests granted or purported to be granted hereby and (b) at Collateral
Agent's reasonable request, appear in and defend any action or proceeding that
may affect such Grantor's title to or Collateral Agent's security interest in
all or any part of the Collateral. Each Grantor hereby authorizes Collateral
Agent to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
such Grantor. Each Grantor agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement signed by such
Grantor shall be sufficient as a financing statement and may be filed as a
financing statement in any and all jurisdictions.
6.2. Investment Property.
-------------------
(a) Each Grantor agrees that it will, upon obtaining any Additional Pledged
Securities, promptly (and in any event within five Business Days) deliver to
Collateral Agent a Pledge Supplement, duly executed by such Grantor, in
substantially the form of Exhibit A (a "Pledge Supplement"), in respect of such
---------
Additional Pledged Securities. Each Grantor hereby authorizes Collateral Agent
to attach each Pledge Supplement to this Agreement and agrees that all
Additional Pledged Securities of such Grantor listed on any Pledge Supplement
shall for all purposes hereunder be considered Collateral; provided, the failure
of any Grantor to execute a Pledge Supplement with respect to any Additional
Pledged Securities shall not impair the security interest of Collateral Agent
therein or otherwise adversely affect the rights and remedies of Collateral
Agent hereunder with respect thereto.
(b) Upon request by Collateral Agent, each Grantor shall cause each Person
which is an issuer of an uncertificated security included in the Collateral to
execute and deliver all instruments and documents, and take all further action
Collateral Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted in such uncertificated
securities, to establish "control" (as such term is defined in the UCC) by
Collateral Agent over such Collateral or to enable Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to such Collateral,
including, and as applicable, (i) register the security interest granted hereby
upon the books of such Person in accordance with Article 8 of the UCC, and (ii)
deliver to Collateral Agent an Acknowledgment of Pledge, duly executed by such
Grantor, in substantially the form of Exhibit B (an "Acknowledgment of Pledge").
---------
6.3. Intellectual Property. If any Grantor shall hereafter obtain rights
---------------------
to any new Intellectual Property or become entitled to the benefit of (a) any
patent application or patent or any reissue, division, continuation, renewal,
extension or continuation-in-part of any Patent or any improvement of any
Patent; or (b) any Copyright Registration, application for Registration or
renewals or extension of any Copyright, then in any such case, the provisions of
this Agreement shall automatically apply thereto. Each Grantor shall promptly
notify Collateral Agent in writing of any of the foregoing rights acquired by
such Grantor after the date hereof and of (i) any Trademark Registrations issued
or applications for Trademark Registration or applications for Patents made, and
(ii) any Copyright Registrations issued or applications for Copyright
Registration made, in any such case, after the date hereof. Promptly after the
filing of an application for any Trademark Registration, Patent or Copyright
Registration, each Grantor shall execute and deliver to Collateral Agent and
record in all places where this Agreement is recorded a Pledge Supplement,
pursuant to which such Grantor shall grant to Collateral Agent a security
interest to the extent of its interest in such Intellectual Property; provided,
--------
if, in the reasonable judgment of such Grantor, after due inquiry, granting such
interest would result in the grant of a Trademark Registration or Copyright
Registration in the name of Collateral Agent, in which event such Grantor shall
give written notice to Collateral Agent as soon as
XIII-12
reasonably practicable and the filing shall instead be undertaken as soon as
practicable but in no case later than immediately following the grant of the
applicable Trademark Registration or Copyright Registration, as the case may be.
In addition to the foregoing, each Grantor hereby authorizes Collateral Agent to
modify this Agreement without obtaining such Grantor's approval of or signature
to such modification by amending Schedules 2.1(a) and 2.1(c), as applicable, to
---------------- ------
include reference to any right, title or interest in any existing Intellectual
Property or any Intellectual Property acquired or developed by such Grantor
after the execution hereof or to delete any reference to any right, title or
interest in any Intellectual Property in which such Grantor no longer has or
claims any right, title or interest.
6.4. Accounts. Each Grantor shall (a) ▇▇▇▇ conspicuously each item of
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chattel paper included in the Accounts, each Related Contract and, at the
reasonable request of Collateral Agent, each of its records pertaining to the
Collateral, with a legend, in form and substance reasonably satisfactory to
Collateral Agent, indicating that such Collateral is subject to the security
interest granted hereby, and (b) at the reasonable request of Collateral Agent,
deliver and pledge to Collateral Agent hereunder all promissory notes and other
instruments (excluding checks) and all original counterparts of chattel paper
constituting Collateral, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to Collateral Agent.
6.5. Equipment. Each Grantor shall (a) promptly after the acquisition by
---------
such Grantor of any item of Equipment which is covered by a certificate of title
under a statute of any jurisdiction under the law of which indication of a
security interest on such certificate is required as a condition of perfection
thereof, upon the reasonable request of Collateral Agent, execute and file with
the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, and (b) upon the reasonable request of Collateral Agent, deliver to
Collateral Agent copies of all such applications or other documents filed during
such calendar quarter and copies of all such certificates of title issued during
such calendar quarter indicating the security interest created hereunder in the
items of Equipment covered thereby.
SECTION 7. ADDITIONAL GRANTORS
From time to time subsequent to the date hereof, any Person may become a
party hereto as an additional Grantor (an "Additional Grantor"), by delivering
to Collateral Agent a Pledge and Security Agreement Counterpart, duly executed
by such Person, in substantially the form of Exhibit C (a "Counterpart"). Upon
---------
delivery of any such Counterpart to Collateral Agent, notice of which is hereby
waived by Grantors, each Additional Grantor shall be a Grantor and shall be as
fully a party hereto as if Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
XIII-13
SECTION 8. CERTAIN COVENANTS OF GRANTORS
8.1. Generally. Each Grantor shall:
---------
(a) the security interest created by this Agreement, not create or suffer
to exist any Lien upon or with respect to any of the Collateral, except for
Liens as described in Section 7.2 of the Revolving Credit Agreement and Section
6.2 of the Term Loan Credit Agreement;
(b) not use or permit any Collateral to be used unlawfully or in violation
of any provision of this Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering the Collateral;
(c) notify Collateral Agent of any change in such Grantor's name, identity
or corporate structure within 30 days of such change;
(d) if Collateral Agent gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes; and
(e) upon any officer of such Grantor obtaining knowledge thereof, promptly
notify Collateral Agent in writing of any event that may materially and
adversely affect the value of the Collateral or any portion thereof, the ability
of such Grantor or Collateral Agent to dispose of the Collateral or any portion
thereof, or the rights and remedies of Collateral Agent in relation thereto,
including, without limitation, the levy of any legal process against the
Collateral or any portion thereof.
8.2. Permitted Sales. No Grantor shall sell, transfer or assign (by
---------------
operation of law or otherwise) any Collateral unless (a) such sale, transference
or assignment of such Collateral is permitted by the Financing Agreements (a
"Permitted Sale") and (b) no Event of Default shall have occurred and is then
continuing or would occur after giving effect to such Permitted Sale. To the
extent required by the terms of the Financing Agreements, the applicable Grantor
shall, or shall cause, the Net Asset Sale Proceeds with respect to such
Permitted Sale to be delivered to Collateral Agent. Upon receipt of such Net
Asset Sales Proceeds, if applicable, and upon notice to Collateral Agent of such
sale, the Lien hereof encumbering the Collateral subject to such Permitted Sale
shall be released without any further action on the part of the Collateral
Agent. Collateral Agent shall execute each and every appropriate filing
statement and/or recording document reasonably requested by any Grantor is
connection with the foregoing. Any reasonable expense or cost incurred by
Collateral Agent in connection with any such release shall be for the account of
the applicable Grantor.
8.3. Investment Property.
-------------------
(a) Delivery and Consents.
(i) All certificates or instruments representing or evidencing the
Investment Property shall be delivered to and held by or on behalf of
Collateral Agent pursuant hereto and shall be in suitable form for transfer
by delivery or, as applicable, shall be accompanied by the applicable
Grantor's endorsement, where necessary, or duly executed instruments of
transfer or assignment
XIII-14
in blank, all in form and substance satisfactory to Collateral Agent. Upon
the occurrence and during the continuation of an Event of Default,
Collateral Agent shall have the right, without notice to any Grantor, to
transfer to or to register in the name of Collateral Agent or any of its
nominees any or all of the Investment Property, subject only to the
revocable rights specified herein. In addition, Collateral Agent shall
have the right at any time to exchange certificates or instruments
representing or evidencing Investment Property for certificates or
instruments of smaller or larger denominations.
(ii) Each Grantor hereby consents to the pledge of the Partnership
Interests by each other Grantor in each Partnership pursuant to the terms
hereof, and, subject to Section 10, to the transfer of such Partnership
Interests to Collateral Agent or its nominee and to the substitution of
Collateral Agent or its nominee as a substituted Partner or each such
Partnership with all the rights, powers and duties of a general partner or
a limited partners, as the case may be.
(iii) Each Grantor hereby consents to the pledge of the LLC Interests
by each other Grantor in each LLC pursuant to the terms hereof, and,
subject to Section 10, to the transfer of such LLC Interests to Collateral
Agent or its nominee and to the substitution of Collateral Agent or its
nominee as a substituted member of the LLC with all the rights, powers and
duties of a member of the LLC in question.
(b) Covenants. Each Grantor shall, subject to the terms and conditions of
the Financing Agreements:
(i) not permit any issuer of Pledged Securities to merge or consolidate
unless all the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder;
(ii) cause each issuer of Pledged Stock not to issue any stock or other
securities in addition to or in substitution for the Pledged Stock issued
by such issuer, except to such Grantor;
(iii) promptly deliver to Collateral Agent notice of the conversion of
any partnership interests in a Partnership Agreement or any membership
interests in an LLC to certificated form;
(iv) subject to Sections 7.8 and 10.22 of the Revolving Credit
Agreement, and Sections 6.8 and 9.22 of the Term Loan Agreement, not (1)
cancel or terminate any of the Partnership Agreements or LLC Agreements or
consent to or accept any cancellation or termination thereof, (2) sell,
assign (by operation of law or otherwise) or otherwise dispose of any part
of its limited or general partnership interest in any of the Partnerships
or its membership interest in any of the LLCs, (3) amend, supplement or
otherwise modify any of the Partnership Agreements or any of the LLC
Agreements (as in effect on the date hereof), (4) to the extent a Material
Adverse Affect could reasonably be expected to occur therefrom, waive any
default under or breach of any of the Partnership Agreements or any of the
LLC Agreements or waive, fail to enforce, forgive or release any right,
interest or entitlement of any kind, howsoever arising, under or in respect
of any of the Partnership Agreements or
XIII-15
any of the LLC Agreements or vary or agree to the variation in any respect
of any of the provisions of any of the Partnership Agreements or any of the
LLC Agreements or the performance of any other Person under any of the
Partnership Agreements or any of the LLC Agreements, or (5) to the extent a
Material Adverse Affect could reasonably be expected to occur therefrom,
petition, request or take any other legal or administrative action which
seeks, or may reasonably be expected, to rescind, to terminate or to
suspend any of the Partnership Agreements or any of the LLC Agreements or
to amend or modify any of the Partnership Agreements or any of the LLC
Agreements;
(v) subject to Sections 7.8 and 10.22 of the Revolving Credit
Agreement, and Sections 6.8 and 9.22 of the Term Loan Agreement, at its
expense (1) perform and comply in all material respects with all terms and
provisions of the Partnership Agreements and the LLC Agreements required to
be performed or complied with by it, (2) maintain the Partnership
Agreements and the LLC Agreements to which it is a party in full force and
effect, and (3) enforce each of the Partnership Agreements and each of the
LLC Agreements to which it is a party in accordance with its terms, except
to the extent to which a Material Adverse Affect could not be reasonably
expected to occur from a failure to do so,;
(vi) subject to Sections 7.8 and 10.22 of the Revolving Credit
Agreement, and Sections 6.8 and 9.22 of the Term Loan Agreement, not vote
to permit the Partnerships or the LLCs to enter into any transaction of
merger or consolidation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution);
(vii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all Additional Pledged Securities; and
(viii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all Securities any Person that, after the date
of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary of such Grantor.
(c) Voting and Distributions.
(i) So long as no Event of Default shall have occurred and be continuing,
(1) each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Investment Property or any part
thereof for any purpose not inconsistent with the terms of this Agreement or
the Financing Agreements. It is understood, however, that neither (A) the
voting by such Grantor of any Pledged Stock for or such Grantor's consent to
the election of directors at a regularly scheduled annual or other meeting
of stockholders or with respect to incidental matters at any such meeting,
nor (B) such Grantor's consent to or approval of any action otherwise
permitted under this Agreement and the Credit Agreement shall be deemed
inconsistent with the terms of this Agreement or the Credit Agreement within
the meaning of this Section, and no notice of any such voting or consent
need be given to Collateral Agent;
(2) such Grantor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all dividends,
distributions and interest paid in respect of the Investment Property;
provided, any and all dividends, distributions and
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XIII-16
interest paid or payable other than in cash in respect of, and instruments
and other property received, receivable or otherwise distributed in respect
of, or in exchange for, any Investment Property shall be, and shall
forthwith be delivered to Collateral Agent to hold as, Investment Property
and shall, if received by such Grantor, be received in trust for the
benefit of Collateral Agent, be segregated from the other property or funds
of such Grantor and be forthwith delivered to Collateral Agent as
Investment Property in the same form as so received (with all necessary
endorsements); and
(3) Collateral Agent shall promptly execute and deliver (or cause to be
executed and delivered) to such Grantor all such proxies, dividend payment
orders and other instruments as such Grantor may from time to time
reasonably request for the purpose of enabling such Grantor to exercise the
voting and other consensual rights when and to the extent which it is
entitled to exercise pursuant to clause (i) above and to receive the
dividends, principal or interest payments which it is authorized to receive
and retain pursuant to clause (2) above.
(ii) Upon the occurrence and during the continuation of an Event of Default,
(1) upon written notice from Collateral Agent to the applicable
Grantor, all rights of such Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
hereto shall cease, and all such rights shall thereupon become vested in
Collateral Agent who shall thereupon have the sole right to exercise such
voting and other consensual rights;
(2) all rights of such Grantor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become
vested in Collateral Agent who shall thereupon have the sole right to
receive and hold as Investment Property such dividends and interest
payments;
(3) all payments which are received by such Grantor contrary to the
provisions of clause (2) above shall be received in trust for the benefit of
Collateral Agent, shall be segregated from other funds of such Grantor and
shall forthwith be paid over to Collateral Agent as Investment Property in
the same form as so received (with any necessary endorsements); and
(4) all rights of such Grantor or receive any and all payments under or
in connection with the Partnership Agreements and/or the LLC Agreements,
including but not limited to the profits, dividends, and other distributions
which it would otherwise be authorized to receive and retain pursuant
hereto, shall cease, and all such rights shall thereupon become vested in
Collateral Agent who shall thereupon have the sole right to receive and hold
such payments as Collateral.
(iii) IN ORDER TO PERMIT COLLATERAL AGENT TO EXERCISE THE VOTING AND OTHER
CONSENSUAL RIGHTS WHICH IT MAY BE ENTITLED TO
XIII-17
EXERCISE PURSUANT HERETO AND TO RECEIVE ALL DIVIDENDS AND OTHER DISTRIBUTIONS
WHICH IT MAY BE ENTITLED TO RECEIVE HEREUNDER, (1) EACH GRANTOR SHALL PROMPTLY
EXECUTE AND DELIVER (OR CAUSE TO BE EXECUTED AND DELIVERED) TO COLLATERAL AGENT
ALL SUCH PROXIES, DIVIDEND PAYMENT ORDERS AND OTHER INSTRUMENTS AS COLLATERAL
AGENT MAY FROM TIME TO TIME REASONABLY REQUEST, AND (2) WITHOUT LIMITING THE
EFFECT OF CLAUSE (1) ABOVE, EACH GRANTOR HEREBY GRANTS TO COLLATERAL AGENT AN
IRREVOCABLE PROXY TO VOTE THE PLEDGED SECURITIES AND TO EXERCISE ALL OTHER
RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED
SECURITIES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS
OF SHAREHOLDERS, PARTNERS OR MEMBERS, AS THE CASE MAY BE, CALLING SPECIAL
MEETINGS OF SHAREHOLDERS, PARTNERS OR MEMBERS, AS THE CASE MAY BE, AND VOTING AT
SUCH MEETINGS), WHICH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE
NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED SECURITIES ON THE
RECORD BOOKS OF THE ISSUER THEREOF) BY ANY OTHER PERSON (INCLUDING THE ISSUER OF
THE PLEDGED SECURITIES OR ANY OFFICER, PARTNER, MEMBER OR AGENT THEREOF), UPON
THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT, AND WHICH
PROXY SHALL ONLY TERMINATE UPON THE PAYMENT IN FULL OF THE SECURED OBLIGATIONS.
8.4. Collateral Account. Collateral Agent is hereby authorized to
------------------
establish and maintain at its office at Fleet, as a blocked account in the name
of Collateral Agent and under the sole dominion and control of Collateral Agent,
a restricted deposit account designated as "▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
Collateral Account". All amounts at any time held in the Collateral Account
shall be beneficially owned by Grantors but shall be held in the name of
Collateral Agent hereunder, for the benefit of Secured Parties, as collateral
security for the Secured Obligations upon the terms and conditions set forth
herein. Each Grantor shall have no right to withdraw, transfer or, except as
expressly set forth herein, otherwise receive any funds deposited into the
Collateral Account. Anything contained herein to the contrary notwithstanding,
the Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
8.5. Intellectual Property.
---------------------
(a) Covenants. Each Grantor shall:
(i) hereafter use commercially reasonable efforts so as not to permit
the inclusion in any contract to which it hereafter becomes a party of any
provision that could or might in any way materially impair or prevent the
creation of a security interest in, or the assignment of, such Grantor's
rights and interests in any property included within the definitions of any
Intellectual Property acquired under such contracts;
XIII-18
(ii) take all steps reasonably necessary to protect the secrecy of all
trade secrets relating to the products and services sold or delivered under
or in connection with the Intellectual Property, including, without
limitation, entering into confidentiality agreements with employees and
labeling and restricting access to secret information and documents;
(iii) use proper statutory notice in connection with its use of any of
the Intellectual Property to the extent necessary for the protection of the
Intellectual Property;
(iv) use consistent standards of high quality (which may be consistent
with such Grantor's past practices) in the manufacture, sale and delivery
of products and services sold or delivered under or in connection with the
Intellectual Property; and
(v) diligently keep reasonable records respecting the Intellectual
Property and at all times keep at least one complete set of its records
concerning such Collateral at its chief executive office or principal place
of business.
(b) Collections. Except as otherwise provided in this Section 8.5(b), each
--------------
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor in respect of the Intellectual Property or any
portion thereof. In connection with such collections, each Grantor may take
(and, at Collateral Agent's reasonable direction, shall take) such action as
such Grantor or Collateral Agent may deem reasonably necessary or advisable to
enforce collection of such amounts; provided, Collateral Agent shall have the
--------
right at any time, upon the occurrence and during the continuation of an Event
of Default and upon written notice to such Grantor of its intention to do so, to
notify the obligors with respect to any such amounts of the existence of the
security interest created hereby and to direct such obligors to make payment of
all such amounts directly to Collateral Agent, and, upon such notification and
at the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. After receipt by any
Grantor of the notice from Collateral Agent referred to in the proviso to the
-------
preceding sentence and during the continuation of any Event of Default, (i) all
amounts and proceeds (including checks and other instruments) received by such
Grantor in respect of amounts due to such Grantor in respect of the Collateral
or any portion thereof shall be received in trust for the benefit of Collateral
Agent hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to Collateral Agent in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 10.3, and (ii) such Grantor shall not adjust,
------------
settle or compromise the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any credit or discount
thereon.
(c) Applications and Registrations. Each Grantor shall have the duty
diligently, through counsel reasonably acceptable to Collateral Agent, to
prosecute, file and/or make, unless and until such Grantor, in its commercially
reasonable judgment, decides otherwise, (i) any application relating to any of
the Intellectual Property owned, held or used by such Grantor and identified on
Schedule 2.1(c) that is pending as of the date of this Agreement, (ii) any
---------------
Registration on any existing or future unregistered but copyrightable works
(except for works of nominal commercial value or with respect to which such
Grantor has determined in the exercise of its commercially reasonable judgment
that it shall not seek registration), (iii) application on any existing patent
or future patentable but unpatented invention comprising Intellectual
XIII-19
Property (except for works of nominal commercial value or with respect to which
such Grantor has determined in the exercise of its commercially reasonable
judgment that it shall not seek registration), and (iv) any Trademark
opposition and cancellation proceedings, renew Trademark Registrations and
Copyright Registrations (except for works of nominal commercial value or with
respect to which such Grantor has determined in the exercise of its
commercially reasonable judgment that it shall not seek registration) and do
any and all acts which are necessary or desirable, as determined in such
Grantor's commercially reasonable judgment, to preserve and maintain all rights
in all Material Intellectual Property. Any expenses incurred in connection
therewith shall be borne solely by such Grantor. Subject to the foregoing,
each Grantor shall give Collateral Agent prior written notice of any
abandonment of any Material Intellectual Property or any right to file a patent
application or any pending patent application or any Patent.
(d) Litigation. Except as provided herein, each Grantor shall have the
right to commence and prosecute in its own name, as real party in interest, for
its own benefit and at its own expense, such suits, proceedings or other actions
for infringement, unfair competition, dilution, misappropriation or other
damage, or reexamination or reissue proceedings as are in its commercially
reasonable judgment necessary to protect the Intellectual Property. Collateral
Agent shall provide, at such Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including,
without limitation, joining as a necessary party. Each Grantor shall promptly,
following its becoming aware thereof, notify Collateral Agent of the institution
of, or of any adverse determination in, any proceeding (whether in the United
States Patent and Trademark Office, the United States Copyright Office or any
federal, state, local or foreign court) or regarding such Grantor's ownership,
right to use, or interest in any Material Intellectual Property. Each Grantor
shall provide to Collateral Agent any information with respect thereto requested
by Collateral Agent.
(e) Certain Rights of Collateral Agent. In addition to, and not by way of
limitation of, the granting of a security interest in the Collateral pursuant
hereto, each Grantor, effective upon the occurrence and during the continuation
of an Event of Default and upon written notice from Collateral Agent, shall
grant, sell, convey, transfer, assign and set over to Collateral Agent, for its
benefit and the ratable benefit of Secured Parties, all of such Grantor's right,
title and interest in and to the Intellectual Property to the extent necessary
to enable Collateral Agent to use, possess and realize on the Collateral and to
enable any successor or assign to enjoy the benefits of the Collateral. This
right and license shall inure to the benefit of all successors, assigns and
transferees of Collateral Agent and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor. Subject to Section 6.5A of the Revolving
Credit Agreement and Section 5.5A of the Revolving Credit Agreement, each
Grantor hereby grants to Collateral Agent and its employees, representatives and
agents the right to visit such Grantor's and any of its Affiliate's or
subcontractor's plants, facilities and other places of business that are
utilized in connection with the manufacture, production, inspection, storage or
sale of products and services sold or delivered under any of the Intellectual
Property (or which were so utilized during the prior six month period), and to
inspect the quality control and all other records relating thereto upon
reasonable advance written notice to such Grantor and at reasonable dates and
times and as often as may be reasonably requested. If and to the extent that
any Grantor is permitted to license the Intellectual Property, Collateral Agent
shall promptly enter into a non-disturbance agreement or other similar
arrangement, at such Grantor's request and expense, with such Grantor and any
licensee of any Intellectual Property permitted hereunder in form and substance
XIII-20
reasonably satisfactory to Collateral Agent pursuant to which (i) Collateral
Agent shall agree not to disturb or interfere with such licensee's rights under
its license agreement with such Grantor so long as such licensee is not in
default thereunder, and (ii) such licensee shall acknowledge and agree that the
Intellectual Property licensed to it is subject to the security interest created
in favor of Collateral Agent and the other terms of this Agreement.
8.6. Equipment and Inventory. Each Grantor shall:
------------------------
(a) keep the Equipment and Inventory in the jurisdictions specified on
Schedule 5.4 (except to the extent permitted by the Financing Agreements) or,
------------
subject to the Financing Agreements and upon 30 days' written notice to
Collateral Agent, in such other jurisdictions where all action that Collateral
Agent may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Collateral
Agent to exercise and enforce its rights and remedies hereunder, with respect to
such Equipment and Inventory shall have been taken;
(b) maintain the Equipment and Inventory in compliance with Section 6.4A of
the Revolving Credit Agreement and Section 5.4A of the Term Loan Credit
Agreement;
(c) keep correct and accurate records of the Inventory, itemizing and
describing the kind, type and quantity of Inventory, such Grantor's cost
therefor and (where applicable) the current list prices for the Inventory; and
(d) if any Inventory is in possession or control of any of such Grantor's
agents or processors, upon the occurrence and during the continuance of an Event
of Default, instruct such agent or processor to hold all such Inventory for the
account of Collateral Agent and subject to the instructions of Collateral Agent.
8.7. Accounts and Related Contracts. Each Grantor shall:
-------------------------------
(a) keep its chief place of business and chief executive office and the
office where it keeps its records concerning the Accounts and Related Contracts,
and all originals of all chattel paper that evidence Accounts, at the location
therefor specified on Schedule 5.5 or, upon 30 days' written notice to
------------
Collateral Agent following any change in location, at such other location in a
jurisdiction where all action that Collateral Agent may request, in order to
perfect and protect any security interest granted or purported to be granted
hereby, or to enable Collateral Agent to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Promptly upon the reasonable request of Collateral Agent, such
Grantor shall deliver to Collateral Agent complete and correct copies of each
Related Contract;
(b) maintain (i) complete records of all Accounts, including records of all
payments received, credits granted and merchandise returned, and (ii) all
documentation relating thereto in accordance with prudent business practices;
(c) except as otherwise provided in this subsection (c), continue to
collect, at its own expense, all amounts due or to become due to such Grantor
under the Accounts and Related Contracts, and in
XIII-21
connection with such collections, such Grantor shall take such action as such
Grantor or Collateral Agent may deem necessary or advisable to enforce
collection of amounts due or to become due under the Accounts; provided,
--------
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuation of an Event of Default and upon written notice to such
Grantor of its intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Collateral Agent and to
direct such account debtors or obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to Collateral Agent, to notify
each Person maintaining a lockbox or similar arrangement to which account
debtors or obligors under any Accounts have been directed to make payment to
remit all amounts representing collections on checks and other payment items
from time to time sent to or deposited in such lockbox or other arrangement
directly to Collateral Agent and, upon such notification and at the expense of
such Grantor, to enforce collection of any such Accounts and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from Collateral Agent referred to in the proviso to the preceding
-------
sentence, (i) any payments of Accounts, received by such Grantor shall be
forthwith (and in any event within two Business Days) deposited by such Grantor
in the exact form received, duly indorsed by such Grantor to the Collateral
Agent if required, in a Collateral Account maintained under the sole dominion
and control of the Collateral Agent, subject to withdrawal by the Collateral
Agent for the account of the Secured Parties only as provided in Section 10.3,
------------
(ii) until so turned over in accordance with the preceding subsection (i), all
amounts and proceeds (including checks and other instruments) received by such
Grantor in respect of the Accounts and the Related Contracts shall be received
in trust for the benefit of Collateral Agent hereunder and shall be segregated
from other funds of such Grantor and (iii) such Grantor shall not adjust, settle
or compromise the amount or payment of any Account, or release wholly or partly
any account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 9. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT
Each Grantor hereby irrevocably appoints Collateral Agent as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Collateral Agent or otherwise, from time to time
upon the occurrence and continuance of Event of Default, in Collateral Agent's
discretion to take any action and to execute any instrument that Collateral
Agent may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, the following:
(a) to obtain and adjust insurance required to be maintained by such
Grantor or paid to Collateral Agent pursuant to the Financing Agreements;
(b) upon the occurrence and during the continuation of any Event of
Default, to ask for, demand, collect, ▇▇▇ for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) upon the occurrence and during the continuation of any Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
XIII-22
(d) to file any claims or take any action or institute any proceedings that
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of Collateral Agent with
respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted under
this Agreement or the Financing Agreements) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Collateral Agent in its
reasonable discretion, any such payments made by Collateral Agent to become
obligations of such Grantor to Collateral Agent, due and payable immediately
without demand;
(f) to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(g) upon the occurrence and during the continuation of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
Collateral Agent's option and such Grantor's expense, at any time or from time
to time, all acts and things that Collateral Agent deems reasonably necessary to
protect, preserve or realize upon the Collateral and Collateral Agent's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as such Grantor might do.
SECTION 10. REMEDIES
10.1. Generally.
----------
(a) If any Event of Default shall have occurred and be continuing,
Collateral Agent may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Collateral), and also may
(i) require any Grantor to, and each Grantor hereby agrees that it will
at its expense and upon request of Collateral Agent forthwith, assemble all
or part of the Collateral as directed by Collateral Agent and make it
available to Collateral Agent at a place to be designated by Collateral
Agent that is reasonably convenient to both parties;
(ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process;
(iii) prior to the disposition of the Collateral, store, process,
repair or recondition the Collateral or otherwise prepare the Collateral
for disposition in any manner to the extent Collateral Agent deems
appropriate;
XIII-23
(iv) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
of Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon
such other terms as Collateral Agent may deem commercially reasonable; and
(v) exercise dominion and control over, and refuse to permit further
withdrawals (whether of money, securities, instruments or other property)
from any deposit account maintained with Collateral Agent constituting part
of the Collateral.
(b) Collateral Agent or any Secured Party may be the purchaser of any or
all of the Collateral at any sale referred to in clause (a) and Collateral
Agent, as agent for and representative of Secured Parties (but not any Secured
Party in its individual capacity unless Requisite Obligees shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Collateral
Agent at such sale. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by applicable law) all
rights of redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Collateral Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Each Grantor hereby waives any claims against Collateral Agent arising by reason
of the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Collateral Agent accepts the first offer received and does not
offer such Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be liable for the deficiency and the fees of any
attorneys employed by Collateral Agent to collect such deficiency. Each Grantor
further agrees that a breach of any of the covenants contained in this Section
will cause irreparable injury to Collateral Agent, that Collateral Agent has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against each Grantor, and each Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to the
Secured Obligations becoming due and payable prior to their stated maturities.
Nothing in this Section shall in any way alter the rights of Collateral Agent
hereunder.
10.2. Investment Property. Each Grantor recognizes that, by reason of
--------------------
certain prohibitions contained in the Securities Act and applicable state
securities laws, Collateral Agent may be compelled, with respect to any sale of
all or any part of the Investment Property conducted without prior registration
or qualification of such Investment Property under the Securities Act and/or
such state securities laws, to limit purchasers to those who will agree, among
other things, to acquire the Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges that any such private sales may be at prices and on terms
less favorable than those obtainable
XIII-24
through a public sale without such restrictions (including a public offering
made pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances each Grantor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Investment Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
If Collateral Agent determines to exercise its right to sell any or all of the
Investment Property, upon written request, each Grantor shall and shall cause
each issuer of any Pledged Securities to be sold hereunder to furnish to
Collateral Agent all such information as Collateral Agent may request in order
to determine the number and nature of interest, shares or other instruments
included in the Investment Property. Any Investment Property may be sold by
Collateral Agent in exempt transactions under the Securities Act and the rules
and regulations of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.
10.3. Collateral Account. If an Event of Default has occurred and is
-------------------
continuing and, in accordance with Section 8 of the Credit Agreement, Company is
---------
required to pay to Collateral Agent an amount (the "Aggregate Available Amount")
equal to the maximum amount that may at any time be drawn under all Letters of
Credit then outstanding under the Credit Agreement, such Grantor shall deliver
funds in such an amount for deposit in the Collateral Account. If for any
reason the aggregate amount delivered by such Grantor for deposit in the
Collateral Account as aforesaid is less than the Aggregate Available Amount, the
aggregate amount so delivered by such Grantor shall be apportioned among all
outstanding Letters of Credit for purposes of this Section in accordance with
the ratio of the maximum amount available for drawing under each such Letter of
Credit (as to such Letter of Credit, the "Maximum Available Amount") to the
Aggregate Available Amount. Upon any drawing under any outstanding Letter of
Credit in respect of which such Grantor has deposited in the Collateral Account
any amounts described above, Collateral Agent shall apply such amounts to
reimburse the Issuing Secured Party for the amount of such drawing. In the
event of cancellation or expiration of any Letter of Credit in respect of which
such Grantor has deposited in the Collateral Account any amounts described
above, or in the event of any reduction in the Maximum Available Amount under
such Letter of Credit, Collateral Agent shall apply the amount then on deposit
in the Collateral Account in respect of such Letter of Credit (less, in the case
----
of such a reduction, the Maximum Available Amount under such Letter of Credit
immediately after such reduction) first, to the payment of any amounts payable
-----
to Collateral Agent pursuant to Section 9 of the Credit Agreement, second, to
--------- ------
the extent of any excess, to the cash collateralization pursuant to the terms of
this Agreement of any outstanding Letters of Credit in respect of which such
Grantor has failed to pay all or a portion of the amounts described above (such
cash collateralization to be apportioned among all such Letters of Credit in the
manner described above), third, to the extent of any further excess, to the
-----
payment of any other outstanding Secured Obligations in such order as Collateral
Agent shall elect, and fourth, to the extent of any further excess, to the
------
payment to whomsoever shall be lawfully entitled to receive such funds.
10.4. Intellectual Property.
----------------------
(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default,
XIII-25
(i) Collateral Agent shall have the right (but not the obligation) to
bring suit, in the name of any Grantor, Collateral Agent or otherwise, to
enforce any Intellectual Property, in which event such Grantor shall, at
the request of Collateral Agent, do any and all lawful acts and execute any
and all documents required by Collateral Agent in aid of such enforcement
and such Grantor shall promptly, upon demand, reimburse and indemnify
Collateral Agent as provided in Section 14 in connection with the exercise
----------
of its rights under this Section, and, to the extent that Collateral Agent
shall elect not to bring suit to enforce any Intellectual Property as
provided in this Section, each Grantor agrees to use all reasonable
measures, whether by action, suit, proceeding or otherwise, to prevent the
infringement of any of the Material Intellectual Property by others and for
that purpose agrees to diligently maintain any action, suit or proceeding
against any Person so infringing necessary to prevent such infringement;
(ii) upon written demand from Collateral Agent, each Grantor shall
execute and deliver to Collateral Agent an assignment or assignments of the
Intellectual Property and such other documents as are necessary or
appropriate to carry out the intent and purposes of this Agreement;
(iii) each Grantor agrees that such an assignment and/or recording
shall be applied to reduce the Secured Obligations outstanding only to the
extent that Collateral Agent (or any Secured Party) receives cash proceeds
in respect of the sale of, or other realization upon, the Intellectual
Property; and
(iv) within five Business Days after written notice from Collateral
Agent, each Grantor shall make available to Collateral Agent, to the extent
within such Grantor's power and authority, such personnel in such Grantor's
employ on the date of such Event of Default as Collateral Agent may
reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell
the products and services sold or delivered by such Grantor under or in
connection with the Trademarks, Trademark Registrations and Trademark
Rights, such persons to be available to perform their prior functions on
Collateral Agent's behalf and to be compensated by Collateral Agent at such
Grantor's expense on a per diem, pro-rata basis consistent with the salary
and benefit structure applicable to each as of the date of such Event of
Default.
(b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment to Collateral Agent of any rights, title and interests in and to the
Intellectual Property shall have been previously made and shall have become
absolute and effective, and (iv) the Secured Obligations shall not have become
immediately due and payable, upon the written request of any Grantor, Collateral
Agent shall promptly execute and deliver to such Grantor such assignments as may
be necessary to reassign to such Grantor any such rights, title and interests as
may have been assigned to Collateral Agent as aforesaid, subject to any
disposition thereof that may have been made by Collateral Agent; provided, after
--------
giving effect to such reassignment, Collateral Agent's security interest granted
pursuant hereto, as well as all other rights and remedies of Collateral Agent
granted hereunder, shall continue to be in full force and effect; and provided
--------
further, the rights, title and interests so reassigned shall be free and clear
-------
of all Liens other than Liens (if any) encumbering such rights, title and
interest at the time of their assignment to Collateral Agent and Permitted
Encumbrances.
XIII-26
10.5. Accounts. In addition to the rights of the Collateral Agent and the
---------
Secured Parties specified in Section 10 with respect to payments of Accounts, if
an Event of Default shall occur and be continuing, upon request of the
Collateral Agent, all proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the
Collateral Agent and the Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required) and held by the Collateral
Agent in a Collateral Account maintained under the Intercreditor Agreement. All
proceeds while held by the Collateral Agent in a Collateral Account (or by the
Borrower in trust for the Collateral Agent and the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 10.6.
------------
10.6. Proceeds. Except as expressly provided elsewhere in this Agreement,
---------
all proceeds held in any Collateral Account and all other proceeds received by
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 3 of the Intercreditor Agreement.
SECTION 11. CONTINUING SECURITY INTEREST
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of all Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable), the cancellation or termination of the Commitments and
the cancellation or expiration of all outstanding Letters of Credit, (b) be
binding upon each Grantor, its successors and assigns, and (c) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement and subsection 9.1 of the Term Loan
Credit Agreement, any Secured Party may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to herein or otherwise.
Upon the payment in full of all Secured Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen and are not yet due and payable), the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, the security interest granted hereby shall
terminate and all rights to the Pledged Collateral shall revert to the
applicable Grantor. Upon any such termination Collateral Agent will, at the
applicable Grantor's expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination in
accordance with the terms of the Intercreditor Agreement and such Grantor shall
be entitled to the return, upon its request and at its expense, against receipt
and without recourse to Collateral Agent, of such of the Pledged Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
XIII-27
SECTION 12. STANDARD OF CARE
The powers conferred on Collateral Agent hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Collateral Agent shall be deemed
to have exercised reasonable care in the custody and preservation of Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which Collateral Agent accords its own property.
SECTION 13. COLLATERAL AGENT MAY PERFORM
If any Grantor fails to perform any agreement contained herein, Collateral
Agent may itself perform, or cause performance of, such agreement, and the
expenses of Collateral Agent incurred in connection therewith shall be payable
by each Grantor under Section 14.
----------
SECTION 14. INDEMNITY AND EXPENSES
(a) Each Grantor agrees:
(i) to indemnify Collateral Agent and each Secured Party from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including without limitation enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
from Collateral Agent's or such Secured Party's gross negligence, bad
faith, or willful misconduct as determined by a court of competent
jurisdiction; and
(ii) to pay to Collateral Agent promptly following written demand the
amount of any and all reasonable costs and reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and
agents in accordance with the terms and conditions of the Financing
Agreements.
(b) The obligations of each Grantor in this Section 14 shall survive the
termination of this Agreement and the discharge of such Grantor's other
obligations under this Agreement, the Hedge Agreements, the Financing Agreements
and any other Loan Documents.
SECTION 15. COLLATERAL AGENT
Collateral Agent has been appointed to act as Collateral Agent hereunder by
CA Administrative Agent on behalf of the CA Lenders and Term Administrative
Agent on behalf of the Term Lenders pursuant to the Intercreditor Agreement and,
by their acceptance of the benefits hereof, Lender Counterparties, and
XIII-28
shall be entitled to the benefits of the Intercreditor Agreement. Collateral
Agent shall be obligated, and shall have the right hereunder, to make demands,
to give notices, to exercise or refrain from exercising any rights, and to take
or refrain from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement and the
Intercreditor Agreement; provided that Collateral Agent shall exercise, or
--------
refrain from exercising, any remedies provided for in Section 10 in accordance
with the instructions of Requisite Obligees.
SECTION 16. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by
Collateral Agent and, in the case of any such amendment or modification, by such
Grantor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 17. NOTICES
Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Collateral Agent and any Grantor shall not
--------
be effective until received. For the purposes hereof, the address of each party
hereto shall be as provided in subsection 10.8 of the Credit Agreement or
subsection 9.8 of the Term Loan Agreement, as applicable.
SECTION 18. SEVERABILITY
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. HEADINGS
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
XIII-29
SECTION 20. GOVERNING LAW; TERMS
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 21. COUNTERPARTS
This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
SECTION 22. LIMITATION ON LIABILITY
The Obligations shall be nonrecourse to General Partner, except to the
extent of its partnership interests in Company and Holdings. Any liability of
General Partner in respect of the Obligations shall be specifically limited to
the interests of General Partner and in its partnership interests in Company and
Holdings, and no other assets of General Partner shall be subject to any claims
as a result hereof. Except as set forth herein or in the Loan Documents,
Collateral Agent acknowledges and agrees that no director, officer, employee,
incorporator, stockholder or partner of any Grantor, as such, shall have any
liability for any Obligations or for any claim based on, in respect of, or by
reason of, such Obligations or their creation.
[Remainder of page intentionally left blank]
XIII-30
IN WITNESS WHEREOF, each Grantor and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By: ________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By: ________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL INTERNATIONAL, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By: ________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL SALES AND LEASING, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By: ________________________________________
Name:
XIII-31
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
By: ________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDINGS CAPITAL CORPORATION
By: ________________________________________
Name:
Title:
ACR MANAGEMENT LLC
By: ________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, INC.
By: ________________________________________
Name:
Title:
FLEET NATIONAL BANK,
as Collateral Agent
By: ________________________________________
Name:
Title:
XIII-32
SCHEDULE 2.1(a) TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
PLEDGED STOCK
-------------
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
Class of Percentage
Stock Stock Par Number of
Stock Issuer Certificate Value of Outstanding
Nos. Pledged Pledged
Stock Stock
Pledged
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Common 1 .01 100%
Corporation
2. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P.
Class of Percentage
Stock Stock Par Number of
Stock Issuer Certificate Value of Outstanding
Nos. Pledged Pledged
Stock Stock
Pledged
▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Common 1 .01 100%
Capital Corporation
INDEBTEDNESS
------------
None
----
XIII-1
PARTNERSHIP INTERESTS
---------------------
1. ACR Management, LLC
(i) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P.
- Interest: 1% - General Partner
(ii) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
- Interest: 1% - General Partner
(iii) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, L.P.
- Interest: 1% - General Partner
(iv) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Sales & Leasing, L.P.
- Interest: 1% - General Partner
2. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P.
(i) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
- Interest: 99% - Limited Partner
3. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
(i) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, L.P.
- Interest: 99% - Limited Partner
(ii) Partnership: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Sales & Leasing, L.P.
- Interest: 99% - Limited Partner
LLC INTERESTS
-------------
NONE
----
XIII-2
SCHEDULE 2.1(c) TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Trademarks:
----------
NONE
----
Patents Issued:
--------------
NONE
----
Patents Pending:
---------------
NONE
----
U.S. Copyrights and Mask Works:
------------------------------
NONE
----
Foreign Copyright and Mask Works Registrations:
----------------------------------------------
NONE
----
Pending U.S. Copyrights and Mask Works:
--------------------------------------
NONE
----
Pending Foreign Copyright and Mask Works:
----------------------------------------
NONE
----
XIII-1
SCHEDULE 2.1(d) TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
A. Cranes and Lifting Equipment
----------------------------
See attached.
B. Trucks and Trailers
-------------------
See attached.
XIII-1
SCHEDULE 3.1 TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Filing Offices:
--------------
1. See attached list.
2. The Central filing office of the United States Virgin Islands.
XIII-2
SCHEDULE 5.4 TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Locations of Equipment and Inventory:
-------------------------------------
Each of the ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, the District of Columbia, Puerto
Rico and the United States Virgin Islands.
XIII-3
SCHEDULE 5.5 TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Chief Place of Business
-----------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
Chief Executive Office
----------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
Office where Records are Kept
Regarding the Accounts and all Originals
of all Chattel Paper that evidence Accounts
-------------------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
XIII-4
EXHIBIT A TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated _______, is delivered pursuant to the Pledge
and Security Agreement, dated as of July 22, 1998 (as it may be from time to
time amended, modified or supplemented, the "Security Agreement"), among ▇▇▇▇▇▇▇
▇▇▇▇▇ Rental, L.P., the other Grantors named therein, and Fleet National Bank,
as Collateral Agent. Capitalized terms used herein not otherwise defined herein
shall have the meanings ascribed thereto in the Security Agreement.
Subject to the terms and conditions of the Security Agreement, Grantor
hereby grants to Collateral Agent a security interest in all of Grantor's right,
title and interest in and to [the Investment Property listed on Supplemental
------------
Schedule [2.1(a)] attached hereto] [the Equipment listed on Supplemental
---------------- ------------
Schedule 2.1(d) attached hereto] [and] [the Intellectual Property listed on
---------------
Supplemental Schedule [2.1(c)] attached hereto]the following, in each case
-----------------------------
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located. All such [Investment
Property] [and] [Intellectual Property] shall be deemed to be part of the
Collateral and hereafter subject to each of the terms and conditions of the
Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed
and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By: ___________________________
Title:
XIII-5
EXHIBIT B TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
ACKNOWLEDGMENT OF PLEDGE
This ACKNOWLEDGMENT OF PLEDGE, dated July __, 1999, is delivered to Fleet
National Bank, as Collateral Agent, pursuant to the Pledge and Security
Agreement, dated as of July 22, 1998, (as it may be from time to time amended,
modified or supplemented, the "Security Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental,
L.P., the other Grantors named therein, and Collateral Agent. Capitalized terms
used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Security Agreement.
CARLISLE EQUIPMENT GROUP, L.P. a Delaware limited partnership ("Issuer"),
hereby acknowledges receipt of a conformed copy of the Security Agreement and
(a) consents to the terms thereof, and (b) confirms that a pledge of all of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P. right, title and interest in, to and under the
security referred to below has been registered or otherwise duly noted in the
books and records of Issuer in the name of Secured party as follows:
1. Security limited partnership interests:
2. Number of Pledged Stock,
Units or other Interests Pledged: [______________]
3. Registered Owner: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
4. Registered Pledgee: Fleet National Bank, as
Collateral Agent
5. Date of Registration of Pledgee: [______________]
Issuer hereby represents and warrants that there are no Liens, restrictions
or adverse claims as to which Issuer has a duty pursuant to Section 8-403 of
the UCC to which such Security is or may be subject, other than Permitted Liens.
Issuer hereby agrees, at the request of Collateral Agent and at the sole
cost and expense of Issuer, to register any further pledge or transfer of such
Security effected in the manner contemplated by the Security agreement and
promptly furnish to Secured party and any such pledgee or transferee any
statement contemplated by Section 8-408 of the UCC.
XIII-6
IN WITNESS WHEREOF, Issuer has caused this Acknowledgment of Pledge to be
duly executed and delivered by its duly authorized officer as of the date above
first written.
CARLISLE EQUIPMENT GROUP, L.P.
By: ▇▇▇▇▇▇▇▇ ▇▇, L.L.C., its general partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., its
managing member
By: ACR Management L.L.C., its
general partner
By: ___________________________
Name:
Title:
XIII-7
EXHIBIT C TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
PLEDGE AND SECURITY AGREEMENT COUNTERPART
This PLEDGE AND SECURITY AGREEMENT COUNTERPART, dated July __, 1999, is
delivered pursuant to the Pledge and Security Agreement, dated as of July 22,
1998 (as it may be from time to time amended, modified or supplemented, the
"Security Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., the other Grantors
named therein, and Fleet National Bank, as Collateral Agent. Capitalized terms
used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Security Agreement.
Subject to the terms and conditions of the Security Agreement, Grantor
hereby (i) agrees that this counterpart may be attached to the Security
Agreement, (ii) agrees that such Grantor will comply with all the terms and
conditions of the Security Agreement as if it were an original signatory
thereto, and (iii) grants to Collateral Agent a security interest in all of
Grantor's right, title and interest in and to [the Investment Property listed on
Supplemental Schedule [2.1(a)] attached hereto] [the Equipment listed on
-----------------------------
Supplemental Schedule 2.1(d) attached hereto ][and] [the Intellectual Property
----------------------------
listed on Supplemental Schedule [2.1(c)] attached hereto] the following, in each
-----------------------------
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located. All such [Investment
Property] [and] [Intellectual Property] shall be deemed to be part of the
Collateral and hereafter subject to each of the terms and conditions of the
Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Pledge and Security Agreement
Counterpart to be duly executed and delivered by its duly authorized officer as
of July __, 1999.
CARLISLE EQUIPMENT GROUP, L.P.
By: ▇▇▇▇▇▇▇▇ ▇▇, L.L.C., its general partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.,
its managing member
By: ACR Management L.L.C., its
general partner
By: ___________________________
Name:
Title:
XIII-8
EXHIBIT XIV
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY, dated as of July 22, 1998, is entered into by THE
UNDERSIGNED (each a "Guarantor" and collectively, "Guarantors") in favor of and
for the benefit of FLEET NATIONAL BANK ("Fleet"), as collateral agent for and
representative of (in such capacity herein called "Guarantied Party") Secured
Parties (as hereinafter defined).
RECITALS
WHEREAS, Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P. ("Holdings"), the
financial institutions from time to time parties thereto (the "CA Lenders")
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. ("GSCP"), as Arranger and Syndication Agent
(in such capacity, "CA Syndication Agent"), Fleet, as Administrative Agent (in
such capacity, "CA Administrative Agent"), and DLJ Capital Funding, Inc.
("DLJ"), as Documentation Agent (in such capacity, "CA Documentation Agent")
have entered into a Credit Agreement of even date herewith (as it may be from
time to time amended, supplemented or otherwise modified, the "Credit
Agreement") pursuant to which the CA Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company;
WHEREAS, Company, Holdings, the financial institutions from time to time
parties thereto (the "Term Lenders") GSCP, as Arranger and Syndication Agent (in
such capacity, "Term Syndication Agent"), Fleet, as Administrative Agent (in
such capacity, "Term Administrative Agent"), and DLJ, as Documentation Agent (in
such capacity, "Term Documentation Agent") have entered into a Term Loan
Agreement of even date herewith (as it may be from time to time amended,
supplemented or otherwise modified, the "Term Loan Agreement") pursuant to which
Term Lenders have made certain commitments, subject to the terms and conditions
set forth in the Term Loan Agreement, to extend certain credit facilities to
Company;
WHEREAS, subject to the terms and conditions of the Credit Agreement and the
Term Loan Agreement (each, a "Financing Agreement"), Company may enter into one
or more Interest Rate Agreements (collectively, the "Hedge Agreements") with one
or more Lenders or Affiliates thereof (in such capacity, collectively, "Lender
Counterparties"; the CA Lenders, the CA Syndication Agent, the CA Administrative
Agent, the CA Documentation Agent, the Term Lenders, the Term Syndication Agent,
the Term Administrative Agent, and the Term Documentation Agent, collectively,
"Secured Parties");
WHEREAS, a portion of the proceeds of the Loans (as hereinafter defined) may
be advanced to Guarantors and thus the Guarantied Obligations (as hereinafter
defined) are being incurred for and will inure to the benefit of Guarantors
(which benefits are hereby acknowledged);
WHEREAS, it is a condition precedent to the making of the initial Loans
under the Financing Agreements that Company's obligations thereunder be
guarantied by Guarantors.
XIV-1
WHEREAS, Guarantors are willing irrevocably and unconditionally to guaranty
such obligations of Company.
NOW, THEREFORE, in consideration of the premises and to induce (i) the CA
Administrative Agent, the CA Syndication Agent, the CA Documentation Agent and
the Credit Agreement Lenders to enter into the Credit Agreement, (ii) the Credit
Agreement Lenders to make their respective loans to, and issue Letters of Credit
for the account of, the Company, (iii) the Term Administrative Agent, the Term
Syndication Agent, the Term Documentation Agent and the Term Lenders to enter
into the Term Loan Credit Agreement and (iv) the Term Lenders to make their
respective loans to the Company, and (v) to induce Lender Counterparties to
enter into the Hedge Agreements and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Guarantors hereby
agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. Capitalized terms used herein, including the
----------------------
recitals hereto, not otherwise defined herein shall have the meanings ascribed
thereto in the Financing Agreements. In addition, the following terms shall
have the following meanings:
"Acceleration" shall mean any of the Credit Agreement Obligations or the
Term Loan Credit Agreement Obligations have been declared, or have become,
immediately due and payable, or the commitments to extend credit of the Credit
Agreement Lenders or the Term Lenders shall have been terminated under Section 8
of the Credit Agreement or Section 7 of the Term Loan Credit Agreement,
respectively.
"Beneficiaries" means Guarantied Party, Secured Parties and any Lender
Counterparties.
"Collateral Account" shall mean "Collateral Account" as defined in the
Intercreditor Agreement.
"Commitments" means the Credit Agreement Commitments and the Term
Commitments.
"Credit Agreement Commitments" shall mean the "Commitments" as defined in
the Credit Agreement.
"Credit Agreement Obligations" shall mean the "Obligations" as defined in
the Credit Agreement.
"Event of Default" means any "Event of Default" as defined in any Financing
Agreement or the occurrence of an Event of Default in which Company is the
Defaulting Party and which results in the designation of an Early Termination
Date (as such terms are defined in a Master Agreement or an Interest Rate Swap
Agreement or Interest Rate Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Hedge Agreement.
"Financing Agreement" means either the Credit Agreement or the Term Loan
Credit Agreement, and "Financing Agreements" means the Credit Agreement and the
Term Loan Credit Agreement, collectively.
"Financing Agreement Obligations" means Credit Agreement Obligations and
Term Obligations.
XIV-2
"Guaranty" means this Subsidiary Guaranty dated as of July 22, 1998, as it
may be amended, supplemented or otherwise modified from time to time.
"Hedge Agreement Obligations" shall mean all obligations of every nature of
Company from time to time owed to Lender Counterparties or any of them under
Hedge Agreements, including without limitation payments for early termination
thereof.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of
July 22, 1998, by and among CA Administrative Agent, Term Administrative Agent
and Collateral Agent.
"Loan" means any "Loan" as defined in any Financing Agreement, and "Loans"
means all such Loans collectively.
"Loan Document" means any "Loan Document" as defined in any Financing
Agreement, and "Loan Documents" means all such Loan Documents collectively.
"Requisite Obligees" means "Requisite Obligees" as defined in the
Intercreditor Agreement.
"Term Commitments" shall mean the "Commitments" as defined in the Term Loan
Credit Agreement.
"Term Obligations" shall mean the "Obligations" as defined in the Term Loan
Credit Agreement.
"payment in full", "paid in full" or any similar term means payment in full
of the Guarantied Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable), including without limitation all principal, interest,
costs, fees and expenses (including, without limitation, reasonable legal fees
and expenses) of Beneficiaries as required under the Loan Documents and the
Hedge Agreements.
1.2 Interpretation. References to "Sections" and "subsections" shall be to
--------------
Sections and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Subject to the provisions of
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subsection 2.2(a), Guarantors jointly and severally hereby irrevocably and
unconditionally guaranty, as primary obligors and not merely as sureties, the
due and punctual payment in full of all Guarantied Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. (S) 362(a)). The term "Guarantied Obligations"
is used herein in its most comprehensive sense and includes:
(a) any and all Financing Agreement Obligations of Company and any and
all Hedge Agreement Obligations, in each case now or hereafter made,
incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in
connection with any Financing Agreement and any other Loan Documents and
the Hedge Agreements, including those arising
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under successive borrowing transactions under any Financing Agreement which
shall either continue the Financing Agreement Obligations of Company or
from time to time renew them after they have been satisfied and including
interest which, but for the filing of a petition in bankruptcy with respect
to Company, would have accrued on any Guarantied Obligations, whether or
not a claim is allowed against Company for such interest in the related
bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.9 hereof.
2.2 Limitation on Amount Guarantied; Contribution by Guarantors. (a)
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Anything contained in this Guaranty to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, such obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (x) in respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder and (y) under
any guaranty of Subordinated Indebtedness which guaranty contains a limitation
as to maximum amount similar to that set forth in this subsection 2.2(a),
pursuant to which the liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including without
limitation any such right of contribution under subsection 2.2(b) or under the
Holdings Guaranty as contemplated by subsection 2.2(b)).
(b) Guarantors under this Guaranty, and Holdings and General Partner under
the Holdings Guaranty, together desire to allocate among themselves
(collectively, the "Contributing Guarantors"), in a fair and equitable manner,
their obligations arising under this Guaranty and the Holdings Guaranty.
Accordingly, in the event any payment or distribution is made on any date by any
Guarantor under this Guaranty or Holdings or General Partner under the Holdings
Guaranty (a "Funding Guarantor") that exceeds its Fair Share (as defined below)
as of such date, that Funding Guarantor shall be entitled to a contribution from
each of the other Contributing Guarantors in the amount of such other
Contributing Guarantor's Fair Share Shortfall (as defined below) as of such
date, with the result that all such contributions will cause each Contributing
Guarantor's Aggregate Payments (as defined below) to equal its Fair Share as of
such date. "Fair Share" means, with respect to a Contributing Guarantor as of
any date of determination, an amount equal to (i) the ratio of (x) the Adjusted
Maximum Amount (as defined below) with respect to such Contributing Guarantor to
(y) the aggregate of the Adjusted Maximum Amounts with respect to all
Contributing Guarantors multiplied by (ii) the aggregate amount paid or
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distributed on or before such date by all Funding Guarantors under this Guaranty
and the Holdings Guaranty in respect of the obligations guarantied. "Fair Share
Shortfall" means, with respect to a Contributing Guarantor as of any date of
determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "Adjusted
Maximum Amount" means, with respect to a Contributing Guarantor as of any date
of determination, the maximum aggregate amount of the obligations of such
Contributing Guarantor under this Guaranty or the Holdings Guaranty, as
applicable, determined as of such date, in the case of any Guarantor, in
accordance
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with subsection 2.2(a); provided that, solely for purposes of calculating the
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"Adjusted Maximum Amount" with respect to any Contributing Guarantor for
purposes of this subsection 2.2(b), any assets or liabilities of such
Contributing Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations of contribution
hereunder or under subsection 2.2 of the Holdings Guaranty shall not be
considered as assets or liabilities of such Contributing Guarantor. "Aggregate
Payments" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Contributing Guarantor in
respect of this Guaranty or the Holdings Guaranty, as applicable (including,
without limitation, in respect of this subsection 2.2(b) or subsection 2.2 of
the Holdings Guaranty) minus (ii) the aggregate amount of all payments received
-----
on or before such date by such Contributing Guarantor from the other
Contributing Guarantors as contributions under this subsection 2.2(b) or
subsection 2.2 of the Holdings Guaranty. The amounts payable as contributions
hereunder and under subsection 2.2 of the Holdings Guaranty shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this subsection 2.2(b) and subsection 2.2 of
the Holdings Guaranty shall not be construed in any way to limit the liability
of any Contributing Guarantor hereunder or under the Holdings Guaranty.
Holdings is a third party beneficiary to the contribution agreement set forth in
this subsection 2.2(b). Notwithstanding the foregoing neither of General
Partner nor any Subsidiary of Holdings which is a corporation as of the Closing
Date shall be liable to Contributing Guarantor pursuant to the foregoing so long
as, with respect to any such entity, the provisions of subsection 7.13 of the
Revolving Credit Agreement as in effect on the Closing Date have not been
violated.
2.3 Payment by Guarantors; Application of Payments. Subject to the
-----------------------------------------------
provisions of subsection 2.2(a), Guarantors hereby jointly and severally agree,
in furtherance of the foregoing and not in limitation of any other right which
any Beneficiary may have at law or in equity against any Guarantor by virtue
hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S) 362(a)),
Guarantors will promptly following written demand pay, or cause to be paid, in
cash, to Guarantied Party for the ratable benefit of Beneficiaries, an amount
equal to the sum of the unpaid principal amount of all Guarantied Obligations
then due as aforesaid, accrued and unpaid interest on such Guarantied
Obligations (including, without limitation, interest which, but for the filing
of a petition in bankruptcy with respect to Company, would have accrued on such
Guarantied Obligations, whether or not a claim is allowed against Company for
such interest in the related bankruptcy proceeding) and all other Guarantied
Obligations then owed to Beneficiaries as aforesaid. All such payments shall be
applied promptly from time to time by Guarantied Party as provided in subsection
3 of the Intercreditor Agreement.
2.4 Liability of Guarantors Absolute. Each Guarantor agrees that its
---------------------------------
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and without limiting
the generality thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) The obligations of each Guarantor hereunder are independent of the
obligations of Company under the Loan Documents or the Hedge Agreements and the
obligations of any other guarantor (including
XIV-5
any other Guarantor) of the obligations of Company under the Loan Documents or
the Hedge Agreements, and a separate action or actions may be brought and
prosecuted against such Guarantor whether or not any action is brought against
Company or any of such other guarantors and whether or not Company is joined in
any such action or actions.
(c) Payment by any Guarantor of a portion, but not all, of the Guarantied
Obligations shall in no way limit, affect, modify or abridge any Guarantor's
liability for any portion of the Guarantied Obligations which has not been paid.
Without limiting the generality of the foregoing, if Guarantied Party is awarded
a judgment in any suit brought to enforce any Guarantor's covenant to pay a
portion of the Guarantied Obligations, such judgment shall not be deemed to
release such Guarantor from its covenant to pay the portion of the Guarantied
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Guarantor, limit, affect, modify or
abridge any other Guarantor's liability hereunder in respect of the Guarantied
Obligations.
(d) Any Beneficiary, upon such terms as it deems appropriate, without notice
or demand and without affecting the validity or enforceability of this Guaranty
or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guarantied Obligations, (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guarantied Obligations or
any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guarantied Obligations and take and hold security for the payment of this
Guaranty or the Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guarantied
Obligations, any other guaranties of the Guarantied Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Guarantied Obligations; (v) enforce and apply any security now or hereafter held
by or for the benefit of such Beneficiary in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that such Beneficiary may have against any
such security, in each case as such Beneficiary in its discretion may determine
consistent with the applicable Financing Agreement or the applicable Hedge
Agreement and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Company or any
security for the Guarantied Obligations; and (vi) exercise any other rights
available to it under the Loan Documents or the Hedge Agreements.
(e) This Guaranty and the obligations of Guarantors hereunder shall be valid
and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guarantied Obligations), including without limitation the occurrence of
any of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy (whether arising under the
Loan Documents or the Hedge Agreements, at law, in equity or otherwise) with
respect to the Guarantied Obligations or any agreement
XIV-6
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guarantied Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events of
default) of any Financing Agreement, any of the other Loan Documents, any of the
Hedge Agreements or any agreement or instrument executed pursuant thereto, or of
any other guaranty or security for the Guarantied Obligations, in each case
whether or not in accordance with the terms of such Financing Agreement or such
Loan Document, such Hedge Agreement or any agreement relating to such other
guaranty or security; (iii) the application of payments received from any source
(other than payments received pursuant to the other Loan Documents or any of the
Hedge Agreements or from the proceeds of any security for the Guarantied
Obligations, except to the extent such security also serves as collateral for
indebtedness other than the Guarantied Obligations) to the payment of
indebtedness other than the Guarantied Obligations, even though any Beneficiary
might have elected to apply such payment to any part or all of the Guarantied
Obligations; (iv) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Holdings or any of its
Subsidiaries and to any corresponding restructuring of the Guarantied
Obligations; (v) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guarantied Obligations; (vi)
any defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations, including but
not limited to failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and usury; and (vii) any
other act or thing or omission, or delay to do any other act or thing, which may
or might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guarantied Obligations.
2.5 Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of
----------------------
Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment or
performance by such Guarantor, to (i) proceed against Company, any other
guarantor (including any other Guarantor) of the Guarantied Obligations or any
other Person, (ii) proceed against or exhaust any security held from Company,
any such other guarantor or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of authority or
any disability or other defense of Company including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto or
by reason of the cessation of the liability of Company from any cause other than
payment in full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions in the
administration of the Guarantied Obligations, except behavior which amounts to
bad faith, gross negligence or willful misconduct;
(e) (i) any principles or provisions of law, statutory or otherwise, which
are or might be in conflict with the terms of this Guaranty, (ii) the benefit of
any statute of limitations affecting such Guarantor's liability
XIV-7
hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments
and counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any security interest or lien or
any property subject thereto; and
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guaranty, notices of default under the Financing Agreements, the Hedge
Agreements or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Guarantied Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in subsection 2.4 and any right to
consent to any thereof.
2.6 Certain California Law Waivers. As used in this subsection 2.6, any
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reference to "the principal" includes Company, and any reference to "the
creditor" includes each Beneficiary. In accordance with Section 2856 of the
California Civil Code:
(a) each Guarantor agrees (i) to waive any and all rights of
subrogation and reimbursement against Company or against any collateral or
security granted by Company for any of the Guarantied Obligations and (ii) to
withhold the exercise of any and all rights of contribution against any other
guarantor of any of the Guarantied Obligations and against any collateral or
security granted by any such other guarantor for any of the Guarantied
Obligations until the Guarantied Obligations shall have been paid in full and
the Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled, all as more fully set forth in subsection 2.7;
(b) each Guarantor waives any and all other rights and defenses
available to such Guarantor by reason of Sections 2787 to 2855, inclusive, 2899
and 3433 of the California Civil Code, including without limitation any and all
rights or defenses such Guarantor may have by reason of protection afforded to
the principal with respect to any of the Guarantied Obligations, or to any other
guarantor (including any other Guarantor) of any of the Guarantied Obligations
with respect to any of such guarantor's obligations under its guaranty, in
either case pursuant to the antideficiency or other laws of the State of
California limiting or discharging the principal's indebtedness or such
guarantor's obligations, including without limitation Section 580a, 580b, 580d,
or 726 of the California Code of Civil Procedure; and
(c) each Guarantor waives all rights and defenses arising out of an
election of remedies by the creditor, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for any Guarantied
Obligation, has destroyed such Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the Code
of Civil Procedure or otherwise; and even though that election of remedies by
the creditor, such as nonjudicial foreclosure with respect to security for an
obligation of any other guarantor (including any other Guarantor) of any of the
Guarantied Obligations, has destroyed such Guarantor's rights of contribution
against such other guarantor.
No other provision of this Guaranty shall be construed as limiting the
generality of any of the covenants and waivers set forth in this subsection 2.6.
In accordance with subsection 3.6 below, this Guaranty shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of the
State of New York, without regard to conflicts of laws principles. This
subsection 2.6 is included solely out of an abundance of caution, and shall not
XIV-8
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guarantied
Obligations.
2.7 Guarantors' Rights of Subrogation, Contribution, Etc. Each Guarantor
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hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute (including without limitation under
California Civil Code Section 2847, 2848 or 2849), under common law or otherwise
and including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Company with respect to the Guarantied Obligations, (b) any right to enforce, or
to participate in, any claim, right or remedy that any Beneficiary now has or
may hereafter have against Company, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guarantied Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, each Guarantor shall
withhold exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Guarantied
Obligations (including without limitation any such right of contribution under
California Civil Code Section 2848 or under subsection 2.2(b) or under the
Holdings Guaranty as contemplated by subsection 2.2(b). Each Guarantor further
agrees that, to the extent the waiver or agreement to withhold the exercise of
its rights of subrogation, reimbursement, indemnification and contribution as
set forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guarantied
Obligations shall not have been paid in full, such amount shall be held in trust
for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over
to Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
2.8 Subordination of Other Obligations. Any indebtedness of Company now or
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hereafter held by any Guarantor is hereby subordinated in right of payment to
the Guarantied Obligations, and any such indebtedness of Company to such
Guarantor collected or received by such Guarantor after an Event of Default has
occurred and is continuing shall be held in trust for Guarantied Party on behalf
of Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of such Guarantor under any other provision of this Guaranty.
2.9 Expenses. Guarantors jointly and severally agree to pay, or cause to
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be paid, promptly upon written demand, and to save Beneficiaries harmless
against liability for, any and all reasonable costs and reasonable expenses
(including reasonable fees and reasonable disbursements of counsel and allocated
costs of internal counsel) incurred or expended by any Beneficiary in connection
with the enforcement of or preservation of any rights under this Guaranty.
XIV-9
2.10 Continuing Guaranty. This Guaranty is a continuing guaranty and shall
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remain in effect until all of the Guarantied Obligations shall have been paid in
full and the Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled. Each Guarantor hereby irrevocably waives any
right (including without limitation any such right arising under California
Civil Code Section 2815) to revoke this Guaranty as to future transactions
giving rise to any Guarantied Obligations.
2.11 Authority of Guarantors or Company. It is not necessary for any
-----------------------------------
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
2.12 Financial Condition of Company. Any Loans may be granted to Company or
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continued from time to time, and any Hedge Agreements may be entered into from
time to time, in each case without notice to or authorization from any Guarantor
regardless of the financial or other condition of Company at the time of any
such grant or continuation or at the time such Hedge Agreement is entered into,
as the case may be. No Beneficiary shall have any obligation to disclose or
discuss with any Guarantor its assessment, or any Guarantor's assessment, of the
financial condition of Company. Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
2.13 Rights Cumulative. The rights, powers and remedies given to
------------------
Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, any of the
Hedge Agreements or any agreement between any Guarantor and any Beneficiary or
Beneficiaries or between Company and any Beneficiary or Beneficiaries. Any
forbearance or failure to exercise, and any delay by any Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
2.14 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty. (a) So
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long as any Guarantied Obligations remain outstanding, no Guarantor shall,
without the prior written consent of Guarantied Party acting pursuant to the
instructions of Requisite Obligees (as defined in subsection 3.12), commence or
join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings against Company. The obligations of Guarantors under this
Guaranty shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Company or by any defense which Company may have by reason of the
order, decree or decision of any court or administrative body resulting from any
such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any portion
of the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantors
XIV-10
and Beneficiaries that the Guarantied Obligations which are guarantied by
Guarantors pursuant to this Guaranty should be determined without regard to any
rule of law or order which may relieve Company of any portion of such Guarantied
Obligations. Guarantors will permit any trustee in bankruptcy, receiver, debtor
in possession, assignee for the benefit of creditors or similar person to pay
Guarantied Party, or allow the claim of Guarantied Party in respect of, any such
interest accruing after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations are
paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty until
indefeasibly paid in full.
2.15 Set Off. In addition to any other rights any Beneficiary may have
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under law or in equity, if any amount shall at any time be due and owing by any
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized
at any time or from time to time, without notice (any such notice being hereby
expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of such Beneficiary owing to such Guarantor and any other
property of such Guarantor held by any Beneficiary to or for the credit or the
account of such Guarantor against and on account of the Guarantied Obligations
and liabilities of such Guarantor to any Beneficiary under this Guaranty.
2.16 Discharge of Guaranty Upon Sale of Guarantor. If all of the stock of
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any Guarantor or any of its successors in interest under this Guaranty shall be
sold or otherwise disposed of (including by merger or consolidation) in an asset
sale not prohibited by subsection 7.7 of the Credit Agreement or otherwise
consented to by Requisite Lenders, the Guaranty of such Guarantor or such
successor in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such asset sale; provided that, as a
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condition precedent to such discharge and release, Guarantied Party shall have
received evidence satisfactory to it that arrangements satisfactory to it have
been made for disposition of the applicable Net Asset Sale Proceeds in
accordance with the requirements of the Credit Agreement.
SECTION 3. MISCELLANEOUS
3.1 Survival of Warranties. All agreements, representations and warranties
-----------------------
made herein shall survive the execution and delivery of this Guaranty and the
other Loan Documents and the Hedge Agreements and any increase in the
Commitments under any Financing Agreement.
3.2 Notices. Any communications between Guarantied Party and any Guarantor
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and any notices or requests provided herein to be given may be given by mailing
the same, postage prepaid, or by telex, facsimile transmission or cable to each
such party at its addresses set forth in the Financing Agreements, on the
signature pages hereof or to such other addresses as each such party may in
writing hereafter indicate. Any notice, request or demand to or upon Guarantied
Party or any Guarantor shall not be effective until received.
XIV-11
3.3 Severability. In case any provision in or obligation under this
-------------
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
3.4 Amendments and Waivers. No amendment, modification, termination or
-----------------------
waiver of any provision of this Guaranty, and no consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, each Guarantor against whom enforcement of such amendment or
modification is sought. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
3.5 Headings. Section and subsection headings in this Guaranty are
---------
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
3.6 Applicable Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
---------------
GUARANTORS AND BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
3.7 Successors and Assigns. This Guaranty is a continuing guaranty and
-----------------------
shall be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure to the benefit of Beneficiaries and their respective
successors and assigns. No Guarantor shall assign this Guaranty or any of the
rights or obligations of such Guarantor hereunder without the prior written
consent of all Secured Parties. Any Beneficiary may, without notice or consent,
assign its interest in this Guaranty in whole or in part. The terms and
provisions of this Guaranty shall inure to the benefit of any transferee or
assignee of any Loan, and in the event of such transfer or assignment the rights
and privileges herein conferred upon such Beneficiary shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
3.8 Consent to Jurisdiction and Service of Process. ALL JUDICIAL
-----------------------------------------------
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GUARANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
XIV-12
RETURN RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 3.2;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GUARANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GUARANTOR
IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
3.9 Waiver of Trial by Jury. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE
------------------------
BENEFITS HEREOF, EACH BENEFICIARY EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS GUARANTY. The scope of this waiver is intended to be all encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each Guarantor and, by its acceptance of the benefits hereof,
each Beneficiary, each (i) acknowledges that this waiver is a material
inducement for such Guarantor and Beneficiaries to enter into a business
relationship, that such Guarantor and Beneficiaries have already relied on this
waiver in entering into this Guaranty or accepting the benefits thereof, as the
case may be, and that each will continue to rely on this waiver in their related
future dealings and (ii) further warrants and represents that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SUBSECTION 3.9 AND EXECUTED BY GUARANTIED PARTY AND EACH GUARANTOR), AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS GUARANTY. In the event of litigation, this Guaranty may be
filed as a written consent to a trial by the court.
3.10 No Other Writing. This writing is intended by Guarantors and
-----------------
Beneficiaries as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect to
the matters covered hereby. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
3.11 Further Assurances. At any time or from time to time, upon the request
-------------------
of Guarantied Party, Guarantors shall execute and deliver such further documents
and do such other acts and things as Guarantied Party may reasonably request in
order to effect fully the purposes of this Guaranty.
XIV-13
3.12 Additional Guarantors. The initial Guarantors hereunder shall be such
----------------------
of the Subsidiaries of Company as are signatories hereto on the date hereof.
From time to time subsequent to the date hereof, additional Subsidiaries of
Company may become parties hereto, as additional Guarantors (each an "Additional
Guarantor"), by executing a counterpart of this Guaranty. Upon delivery of any
such counterpart to Collateral Agent, notice of which is hereby waived by
Guarantors, each such Additional Guarantor shall be a Guarantor and shall be as
fully a party hereto as if such Additional Guarantor were an original signatory
hereof. Each Guarantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Guarantor hereunder, nor by any election of Collateral Agent not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder. This
Guaranty shall be fully effective as to any Guarantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Guarantor hereunder.
3.13 Counterparts; Effectiveness. This Guaranty 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 deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become
effective as to each Guarantor upon the execution of a counterpart hereof by
such Guarantor (whether or not a counterpart hereof shall have been executed by
any other Guarantor) and receipt by Guarantied Party of written or telephonic
notification of such execution and authorization of delivery thereof.
3.14 Collateral Agent. Guarantied Party has been appointed to act as
-----------------
Guarantied Party hereunder by CA Administrative Agent on behalf of the Credit
Agreement Lenders and by Term Administrative Agent on behalf of the Term Lenders
pursuant to the Intercreditor Agreement, and, by their acceptance of the
benefits hereof, Lender Counterparties and shall be entitled to the benefits of
the Intercreditor Agreement. Guarantied Party shall be obligated, and shall
have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action, solely in accordance with this Guaranty and the Intercreditor Agreement;
provided that Guarantied Party shall exercise, or refrain from exercising, any
--------
remedies hereunder in accordance with the instructions of Requisite Obligees.
3.14 Limitation on Liability. The Obligations shall be nonrecourse to
------------------------
General Partner, except to the extent of its partnership interests in Company
and Holdings. Any liability of General Partner in respect of the Obligations
shall be specifically limited to the interests of General Partner and in its
partnership interests in Company and Holdings, and no other assets of General
Partner shall be subject to any claims as a result of this Guaranty. Except as
set forth herein or in the Loan Documents, Collateral Agent acknowledges and
agrees that no director, officer, employee, incorporator, stockholder or partner
of the Guarantors, as such, shall have any liability for any Obligations or for
any claim based on, in respect of, or by reason of, such obligations or their
creation.
[Remainder of page intentionally left blank]
XIV-14
IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL INTERNATIONAL, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By: _________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL SALES AND LEASING, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, Inc., its
general partner
By: _________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
By: _________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDINGS CAPITAL CORPORATION
By: _________________________________________
Name:
Title:
Notice Address:
__________________________
__________________________
__________________________
XIV-15
IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ______________, [199_][200_].
ACR/▇▇▇▇ ACQUISITION, INC.
By: ___________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
XIV-16
EXHIBIT XV
[FORM OF HOLDINGS GUARANTY]
HOLDINGS GUARANTY
This HOLDINGS GUARANTY, dated as of July 22, 1998, is entered into by
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P., a Pennsylvania limited partnership and ACR
MANAGEMENT LLC, a Delaware limited liability company (each, a "Guarantor"), in
favor and for the benefit of FLEET NATIONAL BANK, as collateral agent for and
representative of (in such capacity herein called "Guarantied Party") Secured
Parties (as hereinafter defined).
RECITALS
WHEREAS, Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P. ("Holdings"), the
financial institutions from time to time parties thereto (the "CA Lenders")
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. ("GSCP"), as Arranger and Syndication Agent
(in such capacity, "CA Syndication Agent"), Collateral Agent, as Administrative
Agent (in such capacity, "CA Administrative Agent"), and DLJ Capital Funding,
Inc. ("DLJ"), as Documentation Agent (in such capacity, "CA Documentation
Agent") have entered into a Credit Agreement of even date herewith (as it may be
from time to time amended, supplemented or otherwise modified, the "Credit
Agreement") pursuant to which the CA Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company;
WHEREAS, Company, Holdings, the financial institutions from time to time
parties thereto (the "Term Lenders") GSCP, as Arranger and Syndication Agent (in
such capacity, "Term Syndication Agent"), Collateral Agent, as Administrative
Agent (in such capacity, "Term Administrative Agent"), and DLJ, as Documentation
Agent (in such capacity, "Term Documentation Agent") have entered into a Term
Loan Agreement of even date herewith (as it may be from time to time amended,
supplemented or otherwise modified, the "Term Loan Agreement") pursuant to which
Term Lenders have made certain commitments, subject to the terms and conditions
set forth in the Term Loan Agreement, to extend certain credit facilities to
Company;
WHEREAS, subject to the terms and conditions of the Credit Agreement and the
Term Loan Agreement (each, a "Financing Agreement"), Company may enter into one
or more Interest Rate Agreements (collectively, the "Hedge Agreements") with one
or more Lenders or Affiliates thereof (in such capacity, collectively, "Lender
Counterparties"; the CA Lenders, the CA Syndication Agent, the CA Administrative
Agent, the CA Documentation Agent, the Term Lenders, the Term Syndication Agent,
the Term Administrative Agent, and the Term Documentation Agent, collectively,
"Secured Parties");
WHEREAS, it is a condition precedent to the making of the initial Loans
under the Financing Agreements that Company's obligations thereunder be
guarantied by Guarantors; and
WHEREAS, Guarantors are willing irrevocably and unconditionally to guaranty
such obligations of Company.
XV-1
NOW, THEREFORE, in consideration of the premises and to induce (i) the CA
Administrative Agent, the CA Syndication Agent and the Credit Agreement Lenders
to enter into the Credit Agreement, (ii) the Credit Agreement Lenders to make
their respective loans to, and issue Letters of Credit for the account of, the
Company, (iii) the Term Administrative Agent, the Term Syndication Agent and the
Term Lenders to enter into the Term Loan Credit Agreement and (iv) the Term
Lenders to make their respective loans to the Company, and (v) to induce Lender
Counterparties to enter into the Hedge Agreements and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantors hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. Capitalized terms used herein, including the
----------------------
recitals hereto, not otherwise defined herein shall have the meanings ascribed
thereto in the Financing Agreements. In addition, the following terms shall
have the following meanings:
"Acceleration" shall mean any of the Credit Agreement Obligations or the
Term Loan Credit Agreement Obligations have been declared, or have become,
immediately due and payable, or the commitments to extend credit of the Credit
Agreement Lenders or the Term Lenders shall have been terminated under Section 8
of the Credit Agreement or Section 7 of the Term Loan Credit Agreement,
respectively.
"Aggregate Payments" has the meaning assigned to that term in subsection
2.2.
"Beneficiaries" means Guarantied Party, Secured Parties and any Lender
Counterparties.
"Collateral Accounts" shall mean "Collateral Accounts" as defined in the
Intercreditor Agreement.
"Commitments" means the Credit Agreement Commitments and the Term
Commitments.
"Credit Agreement Commitments" shall mean the "Commitments" as defined in
the Credit Agreement.
"Credit Agreement Obligations" shall mean the "Obligations" as defined in
the Credit Agreement.
"Event of Default" means any "Event of Default" as defined in any Financing
Agreement or the occurrence of an Event of Default in which Company is the
Defaulting Party and which results in the designation of an Early Termination
Date (as such terms are defined in a Master Agreement or an Interest Rate Swap
Agreement or Interest Rate Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Hedge Agreement.
"Financing Agreement" means either the Credit Agreement or the Term Loan
Credit Agreement, and "Financing Agreements" means the Credit Agreement and the
Term Loan Credit Agreement, collectively.
"Financing Agreement Obligations" means Credit Agreement Obligations and
Term Obligations.
XV-2
"Guaranty" means this Holdings Guaranty dated as of July 22, 1998, as it may
be amended, supplemented or otherwise modified from time to time.
"Hedge Agreement Obligations" shall mean all obligations of every nature of
Company from time to time owed to Lender Counterparties or any of them under
Hedge Agreements, including without limitation payments for early termination
thereof.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of
July 22, 1998, by and among CA Administrative Agent, Term Administrative Agent
and Collateral Agent.
"Loan" means any "Loan" as defined in any Financing Agreement, and "Loans"
means all such Loans collectively.
"Loan Document" means any "Loan Document" as defined in any Financing
Agreement, and "Loan Documents" means all such Loan Documents collectively.
"Requisite Obligees" means "Requisite Obligees" as defined in the
Intercreditor Agreement.
"Term Commitments" shall mean the "Commitments" as defined in the Term Loan
Credit Agreement.
"Term Obligations" shall mean the "Obligations" as defined in the Term Loan
Credit Agreement.
"payment in full", "paid in full" or any similar term means payment in full
of the Guarantied Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable), including without limitation all principal, interest,
costs, fees and expenses (including, without limitation, reasonable legal fees
and expenses) of Beneficiaries as required under the Loan Documents and the
Hedge Agreements.
1.2 Interpretation. References to "Sections" and "subsections" shall be to
---------------
Sections and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Each Guarantor hereby
---------------------------------------
irrevocably and unconditionally guaranties, as primary obligor and not merely as
surety, the due and punctual payment in full of all Guarantied Obligations when
the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. (S) 362(a)). The term "Guarantied Obligations"
is used herein in its most comprehensive sense and includes:
(a) any and all Financing Agreement Obligations of Company and any and
all Hedge Agreement Obligations, in each case now or hereafter made,
incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in
connection with any Financing Agreement and any other Loan Documents and the
Hedge Agreements, including those arising under successive borrowing
transactions under any Financing Agreement which shall either continue the
XV-3
Financing Agreement Obligations of Company or from time to time renew them
after they have been satisfied and including interest which, but for the
filing of a petition in bankruptcy with respect to Company, would have
accrued on any Guarantied Obligations, whether or not a claim is allowed
against Company for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.9 hereof.
2.2 Contribution by Guarantor. Each Guarantor under this Guaranty, and
--------------------------
each Subsidiary Guarantor under the Subsidiary Guaranty, together desire to
allocate among themselves (collectively, the "Contributing Guarantors"), in a
fair and equitable manner, their obligations arising under this Guaranty and the
Subsidiary Guaranty. Accordingly, in the event any payment or distribution is
made on any date by each Guarantor under this Guaranty or a Subsidiary Guarantor
under the Subsidiary Guaranty (a "Funding Guarantor") that exceeds its Fair
Share (as defined below) as of such date, that Funding Guarantor shall be
entitled to a contribution from each of the other Contributing Guarantors in the
amount of such other Contributing Guarantor's Fair Share Shortfall (as defined
below) as of such date, with the result that all such contributions will cause
each Contributing Guarantor's Aggregate Payments (as defined below) to equal its
Fair Share as of such date. "Fair Share" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the ratio of
(x) the Fair Share Contribution Amount (as defined below) with respect to such
Contributing Guarantor to (y) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (ii) the
---------- --
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty and the Subsidiary Guaranty in respect of the
obligations guarantied. "Fair Share Shortfall" means, with respect to a
Contributing Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Contributing Guarantor over the Aggregate Payments of
such Contributing Guarantor. "Fair Share Contribution Amount" means, with
respect to a Contributing Guarantor as of any date of determination, the maximum
aggregate amount of the obligations of such Contributing Guarantor under this
Guaranty or the Subsidiary Guaranty, as applicable, that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided that, solely for
--------
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder or under subsection 2.2(b) of the Subsidiary Guaranty
shall not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty or the Subsidiary Guaranty, as applicable
(including, without limitation, in respect of this subsection 2.2 or subsection
2.2(b) of the Subsidiary Guaranty), minus (ii) the aggregate amount of all
-----
payments received on or before such date by such Contributing Guarantor from the
other Contributing Guarantors as contributions under this subsection 2.2 or
subsection 2.2(b) of the Subsidiary Guaranty. The amounts payable as
contributions hereunder and under subsection 2.2(b) of the Subsidiary Guaranty
shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this subsection 2.2 and
subsection 2.2(b) of the Subsidiary Guaranty shall not be construed in any way
to limit the liability of any Contributing Guarantor hereunder or under the
Subsidiary Guaranty. Each Subsidiary Guarantor is a third party beneficiary to
the contribution agreement set forth in this subsection 2.2. Notwithstanding the
foregoing neither of General Partner nor any Subsidiary of Holdings which is a
corporation as of the Closing Date shall be liable to Contributing Guarantor
pursuant to the foregoing so long as, with respect to
XV-4
any such entity, the provisions of subsection 7.13 of the Revolving Credit
Agreement as in effect on the Closing Date have not been violated.
2.3 Payment by Guarantor; Application of Payments. Each Guarantor hereby
----------------------------------------------
agrees, in furtherance of the foregoing and not in limitation of any other right
which any Beneficiary may have at law or in equity against Guarantor by virtue
hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S) 362(a)), each
Guarantor will promptly following written demand pay, or cause to be paid, in
cash, to Guarantied Party for the ratable benefit of Beneficiaries, an amount
equal to the sum of the unpaid principal amount of all Guarantied Obligations
then due as aforesaid, accrued and unpaid interest on such Guarantied
Obligations (including, without limitation, interest which, but for the filing
of a petition in bankruptcy with respect to Company, would have accrued on such
Guarantied Obligations, whether or not a claim is allowed against Company for
such interest in the related bankruptcy proceeding) and all other Guarantied
Obligations then owed to Beneficiaries as aforesaid. All such payments shall be
applied promptly from time to time by Guarantied Party as provided in subsection
3 of the Intercreditor Agreement.
2.4 Liability of Guarantor Absolute. Each Guarantor agrees that its
--------------------------------
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and without limiting
the generality thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) The obligations of each Guarantor hereunder are independent of the
obligations of Company under the Loan Documents or the Hedge Agreements and
the obligations of any other guarantor (including any Subsidiary Guarantor)
of the obligations of Company under the Loan Documents or the Hedge
Agreements, and a separate action or actions may be brought and prosecuted
against either Guarantor whether or not any action is brought against
Company or any of such other guarantors and whether or not Company is joined
in any such action or actions.
(c) Each Guarantor's payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
either Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the foregoing,
if Guarantied Party is awarded a judgment in any suit brought to enforce
either Guarantor's covenant to pay a portion of the Guarantied Obligations,
such judgment shall not be deemed to release either Guarantor from its
covenant to pay the portion of the Guarantied Obligations that is not the
subject of such suit.
(d) Any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability of
this Guaranty or giving rise to any reduction, limitation, impairment,
discharge or termination of either Guarantor's liability hereunder, from
time to time may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment
of the Guarantied Obligations, (ii) settle, compromise, release or
discharge, or accept
XV-5
or refuse any offer of performance with respect to, or substitutions for,
the Guarantied Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other obligations;
(iii) request and accept other guaranties of the Guarantied Obligations and
take and hold security for the payment of this Guaranty or the Guarantied
Obligations; (iv) release, surrender, exchange, substitute, compromise,
settle, rescind, waive, alter, subordinate or modify, with or without
consideration, any security for payment of the Guarantied Obligations, any
other guaranties (including the Subsidiary Guaranty) of the Guarantied
Obligations, or any other obligation of any Person with respect to the
Guarantied Obligations; (v) enforce and apply any security now or hereafter
held by or for the benefit of such Beneficiary in respect of this Guaranty
or the Guarantied Obligations and direct the order or manner of sale
thereof, or exercise any other right or remedy that such Beneficiary may
have against any such security, in each case as such Beneficiary in its
discretion may determine consistent with the applicable Financing Agreement
or the applicable Hedge Agreement and any applicable security agreement,
including foreclosure on any such security pursuant to one or more judicial
or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of either Guarantor against Company or any security for the
Guarantied Obligations; and (vi) exercise any other rights available to it
under the Loan Documents or the Hedge Agreements.
(e) This Guaranty and the obligations of each Guarantor hereunder shall
be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full of the Guarantied Obligations), including without limitation
the occurrence of any of the following, whether or not either Guarantor
shall have had notice or knowledge of any of them: (i) any failure or
omission to assert or enforce or agreement or election not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Loan Documents or the
Hedge Agreements, at law, in equity or otherwise) with respect to the
Guarantied Obligations or any agreement relating thereto, or with respect to
the Subsidiary Guaranty or any other guaranty of or security for the payment
of the Guarantied Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events of
default) of any Financing Agreement, any of the other Loan Documents, any of
the Hedge Agreements or any agreement or instrument executed pursuant
thereto, or of the Subsidiary Guaranty or any other guaranty or security for
the Guarantied Obligations, in each case whether or not in accordance with
the terms of such Financing Agreement or such Loan Document, such Hedge
Agreement or any agreement relating to the Subsidiary Guaranty or such other
guaranty or security; (iii) the application of payments received from any
source (other than payments received pursuant to the other Loan Documents or
any of the Hedge Agreements or from the proceeds of any security for the
Guarantied Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guarantied Obligations) to the
payment of indebtedness other than the Guarantied Obligations, even though
any Beneficiary might have elected to apply such payment to any part or all
of the Guarantied Obligations; (iv) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of
Company or any of its Subsidiaries and to any corresponding restructuring of
the Guarantied Obligations; (v) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guarantied Obligations; (vi) any defenses, set-offs or counterclaims which
Company may allege or assert against any Beneficiary in respect of the
Guarantied Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute of
XV-6
limitations, accord and satisfaction and usury; and (vii) any other act or
thing or omission, or delay to do any other act or thing, which may or might
in any manner or to any extent vary the risk of either Guarantor as an
obligor in respect of the Guarantied Obligations.
2.5 Waivers by Guarantors. Each Guarantor hereby waives, for the benefit
----------------------
of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment or
performance by either Guarantor, to (i) proceed against Company, any other
guarantor (including any Subsidiary Guarantor) of the Guarantied Obligations
or any other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed against
or have resort to any balance of any deposit account or credit on the books
of any Beneficiary in favor of Company or any other Person, or (iv) pursue
any other remedy in the power of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of authority
or any disability or other defense of Company including, without limitation,
any defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of Company from any cause other than payment in full of the Guarantied
Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions in the
administration of the Guarantied Obligations, except behavior which amounts
to bad faith, gross negligence or willful misconduct;
(e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty, (ii) the
benefit of any statute of limitations affecting either Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; and
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Financing
Agreements, the Hedge Agreements or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guarantied
Obligations or any agreement related thereto, notices of any extension of
credit to Company and notices of any of the matters referred to in
subsection 2.4 and any right to consent to any thereof.
2.6 Certain California Law Waivers. As used in this subsection 2.6, any
-------------------------------
reference to "the principal" includes Company, and any reference to "the
creditor" includes each Beneficiary. In accordance with Section 2856 of the
California Civil Code:
(a) Each Guarantor agrees (i) to waive any and all rights of
subrogation and reimbursement against Company or against any collateral or
security granted by Company for any of the Guarantied Obligations and (ii)
to withhold the exercise of any and all rights of contribution against any
other guarantor
XV-7
(including any Subsidiary Guarantor) of any of the Guarantied Obligations
and against any collateral or security granted by any such other guarantor
for any of the Guarantied Obligations until the Guarantied Obligations shall
have been paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, all as more fully
set forth in subsection 2.7;
(b) Each Guarantor waives any and all other rights and defenses
available to either Guarantor by reason of Sections 2787 to 2855, inclusive,
2899 and 3433 of the California Civil Code, including without limitation any
and all rights or defenses either Guarantor may have by reason of protection
afforded to the principal with respect to any of the Guarantied Obligations,
or to any other guarantor (including any Subsidiary Guarantor) of any of the
Guarantied Obligations with respect to any of such guarantor's obligations
under its guaranty, in either case pursuant to the antideficiency or other
laws of the State of California limiting or discharging the principal's
indebtedness or such guarantor's obligations, including without limitation
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure;
and
(c) Each Guarantor waives all rights and defenses arising out of an
election of remedies by the creditor, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for any
Guarantied Obligation, has destroyed either Guarantor's rights of
subrogation and reimbursement against the principal by the operation of
Section 580d of the Code of Civil Procedure or otherwise; and even though
that election of remedies by the creditor, such as nonjudicial foreclosure
with respect to security for an obligation of any other guarantor (including
any Subsidiary Guarantor) of any of the Guarantied Obligations, has
destroyed Guarantor's rights of contribution against such other guarantor.
No other provision of this Guaranty shall be construed as limiting the
generality of any of the covenants and waivers set forth in this subsection 2.6.
In accordance with subsection 3.6 below, this Guaranty shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of the
State of New York, without regard to conflicts of laws principles. This
subsection 2.6 is included solely out of an abundance of caution, and shall not
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guarantied
Obligations.
2.7 Guarantors' Rights of Subrogation, Contribution, Etc. Each Guarantor
-----------------------------------------------------
hereby waives any claim, right or remedy, direct or indirect, that either
Guarantor now has or may hereafter have against Company or any of its assets in
connection with this Guaranty or the performance by either Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute (including without limitation under
California Civil Code Section 2847, 2848 or 2849), under common law or otherwise
and including without limitation (a) any right of subrogation, reimbursement or
indemnification that either Guarantor now has or may hereafter have against
Company with respect to the Guarantied Obligations, (b) any right to enforce, or
to participate in, any claim, right or remedy that any Beneficiary now has or
may hereafter have against Company, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guarantied Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, each Guarantor shall
withhold exercise of any right of contribution either Guarantor may have against
any other guarantor of the Guarantied Obligations (including without limitation
any such right of contribution under California Civil Code Section 2848 or under
the Subsidiary Guaranty as contemplated by subsection 2.2). Each Guarantor
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or
XV-8
voidable for any reason, any rights of subrogation, reimbursement or
indemnification either Guarantor may have against Company or against any
collateral or security, and any rights of contribution either Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to either Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guarantied
Obligations shall not have been paid in full, such amount shall be held in trust
for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over
to Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
2.8 Subordination of Other Obligations. Any indebtedness of Company now or
-----------------------------------
hereafter held by either Guarantor is hereby subordinated in right of payment to
the Guarantied Obligations (except for indebtedness of Company arising from tax
payments made by either Guarantor on behalf of Company), and any such
indebtedness of Company to either Guarantor collected or received by Guarantor
after an Event of Default has occurred and is continuing shall be held in trust
for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over
to Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations but without affecting, impairing or limiting
in any manner the liability of either Guarantor under any other provision of
this Guaranty.
2.9 Expenses. Each Guarantor agrees to pay, or cause to be paid, promptly
---------
upon written demand, and to save Beneficiaries harmless against liability for,
any and all reasonable costs and reasonable expenses (including reasonable fees
and reasonable disbursements of counsel and allocated costs of internal counsel)
incurred or expended by any Beneficiary in connection with the enforcement of or
preservation of any rights under this Guaranty.
2.10 Continuing Guaranty; Termination of Guaranty. This Guaranty is a
---------------------------------------------
continuing guaranty and shall remain in effect until all of the Guarantied
Obligations shall have been paid in full and the Commitments shall have
terminated and all Letters of Credit shall have expired or been cancelled. Each
Guarantor hereby irrevocably waives any right (including without limitation any
such right arising under California Civil Code Section 2815) to revoke this
Guaranty as to future transactions giving rise to any Guarantied Obligations.
2.11 Authority of Guarantor or Company. It is not necessary for any
----------------------------------
Beneficiary to inquire into the capacity or powers of either Guarantor or
Company or the officers, directors or any agents acting or purporting to act on
behalf of any of them.
2.12 Financial Condition of Company. Any Loans may be granted to Company or
-------------------------------
continued from time to time, and any Hedge Agreements may be entered into from
time to time, in each case without notice to or authorization from either
Guarantor regardless of the financial or other condition of Company at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with either Guarantor its assessment, or either Guarantor's
assessment, of the financial condition of Company. Each Guarantor has adequate
means to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations under
the Loan Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part
XV-9
of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Company now known or hereafter known by
any Beneficiary.
2.13 Rights Cumulative. The rights, powers and remedies given to
-----------------
Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, any of the
Hedge Agreements or any agreement between either Guarantor and any Beneficiary
or Beneficiaries or between Company and any Beneficiary or Beneficiaries. Any
forbearance or failure to exercise, and any delay by any Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
2.14 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty. (a) So
--------------------------------------------------------------
long as any Guarantied Obligations remain outstanding, each Guarantor shall not,
without the prior written consent of Guarantied Party acting pursuant to the
instructions of Requisite Obligees (as defined in subsection 3.12), commence or
join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Company. The obligations of each Guarantor
under this Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Company or by any defense which Company may have by reason of
the order, decree or decision of any court or administrative body resulting from
any such proceeding. The agreements of each Guarantor in this subsection
2.14(a) shall not alter or impair its rights as a shareholder of Borrower.
(b) Each Guarantor acknowledges and agrees that any interest on any portion
of the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of each Guarantor and Beneficiaries that the Guarantied Obligations
which are guarantied by either Guarantor pursuant to this Guaranty should be
determined without regard to any rule of law or order which may relieve Company
of any portion of such Guarantied Obligations. Each Guarantor will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations are
paid by Company, the obligations of each Guarantor hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty until
indefeasibly paid in full.
2.15 Set Off. In addition to any other rights any Beneficiary may have
--------
under law or in equity, if any amount shall at any time be due and owing by
either Guarantor to any Beneficiary under this Guaranty, such Beneficiary is
authorized at any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and to apply any
and all deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other
XV-10
indebtedness of such Beneficiary owing to either Guarantor and any other
property of either Guarantor held by any Beneficiary to or for the credit or the
account of either Guarantor against and on account of the Guarantied Obligations
and liabilities of either Guarantor to any Beneficiary under this Guaranty.
SECTION 3. MISCELLANEOUS
3.1 Survival of Warranties. All agreements, representations and warranties
-----------------------
made herein shall survive the execution and delivery of this Guaranty and the
other Loan Documents and the Hedge Agreements and any increase in the
Commitments under any Financing Agreement.
3.2 Notices. Any communications between Guarantied Party and either
--------
Guarantor and any notices or requests provided herein to be given may be given
by mailing the same, postage prepaid, or by telex, facsimile transmission or
cable to each such party at its addresses set forth in the Financing Agreements,
on the signature pages hereof or to such other addresses as each such party may
in writing hereafter indicate. Any notice, request or demand to or upon
Guarantied Party or either Guarantor shall not be effective until received.
3.3 Severability. In case any provision in or obligation under this
-------------
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
3.4 Amendments and Waivers. No amendment, modification, termination or
-----------------------
waiver of any provision of this Guaranty, and no consent to any departure by
either Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, either Guarantor. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
3.5 Headings. Section and subsection headings in this Guaranty are
---------
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
3.6 Applicable Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF EACH
---------------
GUARANTOR AND BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
3.7 Successors and Assigns. This Guaranty is a continuing guaranty and
-----------------------
shall be binding upon each Guarantor and its successors and assigns. This
Guaranty shall inure to the benefit of Beneficiaries and their respective
successors and assigns. Each Guarantor shall not assign this Guaranty or any of
the rights or either obligations of Guarantor hereunder without the prior
written consent of all Lenders. Any Beneficiary may, without notice or consent,
assign its interest in this Guaranty in whole or in part. The terms and
provisions of this Guaranty shall inure to the benefit of any transferee or
assignee of any Loan, and in the event of such transfer or assignment the rights
and privileges herein conferred upon such Beneficiary shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
XV-11
3.8 No Other Writing. This writing is intended by each Guarantor and
-----------------
Beneficiaries as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect to
the matters covered hereby. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
3.9 Further Assurances. At any time or from time to time, upon the request
-------------------
of Guarantied Party, each Guarantor shall execute and deliver such further
documents and do such other acts and things as Guarantied Party may reasonably
request in order to effect fully the purposes of this Guaranty.
3.10 Collateral Agent. Guarantied Party has been appointed to act as
-----------------
Guarantied Party hereunder by CA Administrative Agent on behalf of the Credit
Agreement Lenders and by Term Administrative Agent on behalf of the Term Lenders
pursuant to the Intercreditor Agreement, and by their acceptance of the benefits
hereof, Lender Counterparties and shall be entitled to the benefits of the
Intercreditor Agreement. Guarantied Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action,
solely in accordance with this Guaranty and Intercreditor Agreement; provided
--------
that Guarantied Party shall exercise, or refrain from exercising, any remedies
hereunder in accordance with the instructions of Requisite Obligees.
3.11 Limitation on Liability of General Partner. The Obligations shall be
-------------------------------------------
nonrecourse to General Partner, except to the extent of its partnership
interests in Company and Holdings. Any liability of General Partner in respect
of the Obligations shall be specifically limited to the interests of General
Partner and in its partnership interests in Company and Holdings, and no other
assets of General Partner shall be subject to any claims as a result of this
Guaranty. Except as set forth herein or in the Loan Documents, Collateral Agent
acknowledges and agrees that no director, officer, employee, incorporator,
stockholder or partner of the Guarantors Company, as such, shall have any
liability for any Obligations or for any claim based on, in respect of, or by
reason of, such Obligations or their creation.
[Remainder of page intentionally left blank]
XV-12
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
written above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDINGS CAPITAL CORPORATION
By: ___________________________________
Name:
Title:
ACR MANAGEMENT LLC
By: ___________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, INC.
By: ___________________________________
Name:
Title:
with a copy to:
▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone: (617) 572-
(617) 572-
Facsimile: (617) 572-
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone:
Facsimile:
XV-13
EXHIBIT XVI
[FORM OF MORTGAGE]
===============================================================================
MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
([**STATE**])
made from
[____________________]
"Mortgagor"
to
FLEET NATIONAL BANK, as Collateral Agent,
"Mortgagee"
Date: As of July 22, 1998
===============================================================================
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Attn:][4]
---------------------------------
[4]NOTE: If this Mortgage or the Notes which this Mortgage secures are in your
possession, DO NOT DESTROY THEM. State law may require presentation of this
Mortgage and/or the Notes in order to obtain a termination or release of this
Mortgage upon satisfaction of the indebtedness secured hereby. The termination
or release must be recorded in the city, town, county or parish records for the
jurisdiction in which the land described in the Exhibit A is located.
---------
XVI-1
TABLE OF CONTENTS
Page
Definition of Mortgaged Property,
Granting Clauses...................................................................... 1
SECTION 1
[INTENTIONALLY OMITTED]............................... 9
SECTION 2
COVENANTS AND AGREEMENTS OF MORTGAGOR......................... 10
2.1 Payment and Performance of Obligations....................................... 10
2.2 Assignment of Policies Upon Foreclosure...................................... 10
2.3 Inspections.................................................................. 10
2.4 Actions by Mortgagee To Preserve Mortgaged Property.......................... 11
2.5 Action by Mortgagee to Protect Interests; Subrogation; Waiver of Offset...... 12
2.6 Restrictions on Transfer of Mortgaged Property by Mortgagor.................. 13
2.7 Incorporation by Reference................................................... 13
2.8 Additional Security.......................................................... 13
2.9 Further Acts................................................................. 14
2.10 Offsite Improvements......................................................... 15
2.11 Utilities.................................................................... 15
2.12 Hazardous Materials and Environmental Laws 15
SECTION 3
ASSIGNMENT OF RENTS AND LEASES............................ 16
3.1 Assignment of Rents and Leases............................................... 16
3.2 No Limitation of Rights...................................................... 16
3.3 Sale of Mortgaged Property................................................... 16
3.4 Term of Assignment........................................................... 17
3.5 Perfection Upon Recordation.................................................. 17
3.6 Bankruptcy Provisions........................................................ 18
SECTION 4
SECURITY AGREEMENT.................................. 18
4.1 Grant of Security; Incorporation by Reference................................ 18
4.2 Fixture Filing Financing Statements.......................................... 19
XVI-2
Page
4.3 Mortgagee as Secured Party................................................... 19
SECTION 5
DEFAULTS AND REMEDIES................................. 19
5.1 Events of Default............................................................ 19
5.2 Fixtures..................................................................... 19
5.3 Remedies..................................................................... 20
5.4 Costs and Expenses........................................................... 24
5.5 Additional Rights of Mortgagee............................................... 24
5.6 Application of Proceeds...................................................... 25
SECTION 6
[INTENTIONALLY OMITTED]................................ 25
SECTION 7
TERMINATION...................................... 25
SECTION 8
MISCELLANEOUS COVENANTS AND AGREEMENTS........................ 26
8.1 Cumulative Rights; Waivers; Modifications.................................... 26
8.2 Partial Releases............................................................. 26
8.3 Severability................................................................. 26
8.4 Subrogation.................................................................. 27
8.5 Mortgagee's Powers........................................................... 27
8.6 Enforceability of Mortgage................................................... 27
8.7 Variable Interest............................................................ 28
8.8 Choice of Law................................................................ 28
8.9 Counterparts................................................................. 28
8.10 Recording References......................................................... 28
8.11 Notices...................................................................... 29
8.12 Successors and Assigns....................................................... 29
8.13 Expenses..................................................................... 30
8.14 Nonforeign Entity............................................................ 30
8.15 Purpose of the Loans......................................................... 30
8.16 No Joint Venture or Partnership.............................................. 30
8.17 Amendments and Waivers....................................................... 30
8.18 Covenants and Agreements Run with Land....................................... 31
XVI-3
Page
8.19 Non-Waiver................................................................... 31
8.20 Survival of Obligations...................................................... 31
8.21 Consent to Jurisdiction and Service of Process............................... 31
8.22 Waiver of Jury Trial......................................................... 32
EXHIBIT A - LEGAL DESCRIPTION OF LAND
EXHIBIT B - DESCRIPTION OF ADDITIONAL MORTGAGED PROPERTY
EXHIBIT C - UCC INFORMATION
XVI-4
MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FIXTURE FILING ([**STATE**])
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND
FIXTURE FILING ([**STATE**]) (this "Mortgage") is dated as of ________________,
from______________________, a ____________________ ("Mortgagor"), whose address
is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to FLEET NATIONAL
BANK, whose address is ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as
Collateral Agent (in such capacity, "Agent") for the Lenders listed in the
Financing Agreements (as hereinafter defined), and all successors and assigns,
together with all successor Collateral Agents, "Mortgagee".
All capitalized terms used but not otherwise defined herein shall have
the same meanings ascribed to such terms in the Financing Agreements (as defined
below).
MORTGAGOR IS THE OWNER OF THE RECORD INTEREST IN THE PARCELS OF LAND AS
INDICATED IN EXHIBIT A HERETO.
THIS MORTGAGE COVERS GOODS WHICH ARE OR ARE TO BECOME AFFIXED TO OR FIXTURES ON
THE LAND DESCRIBED IN EXHIBIT A HERETO. THIS MORTGAGE IS A FIXTURE FILING AND
---------
IS TO BE INDEXED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OF EACH COUNTY
(OR, TO THE EXTENT SIMILAR RECORDS ARE MAINTAINED AT THE CITY OR TOWN LEVEL
INSTEAD OF THE COUNTY LEVEL, TO BE INDEXED IN THE REAL ESTATE RECORDS OF EACH
SUCH CITY OR TOWN) IN WHICH SAID LAND OR ANY PORTION THEREOF IS LOCATED.
NOW, THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and the mutual covenants
herein contained, and in order to secure the Obligations (as hereinafter
defined), MORTGAGOR HEREBY COVENANTS AND AGREES WITH AND REPRESENTS AND WARRANTS
TO MORTGAGEE AS FOLLOWS:
A. GRANTING CLAUSES. Mortgagor hereby:
(i) grants, bargains, sells, assigns, pledges, transfers, mortgages
and conveys, as security for the Obligations, those portions of the following
described Mortgaged Property (as hereinafter defined) that constitute real
property under the laws of the State wherein located to Mortgagee, WITH POWER OF
SALE, pursuant to this Mortgage and Applicable Law, but subject to (a) the
assignment made in paragraph (iii) below, and (b) to the Permitted Encumbrances,
---------------
TO HAVE AND TO HOLD such portions of the Mortgaged Property, to Mortgagee and
its successors and assigns forever, subject to all of the terms, conditions,
covenants and agreements herein set forth, for the security and benefit of
Mortgagee and its successors and assigns; and
(ii) to the extent granted in, and subject to the terms and provisions
of, that certain Pledge and Security Agreement dated as of even date herewith
from Mortgagor, as debtor, to Mortgagee,
XVI-5
as secured party, as the same may hereafter be amended, modified, supplemented,
restated or renewed (such Pledge and Security Agreement, together with any and
all amendments, modifications, supplements, restatements, extensions, renewals
or replacements thereof are collectively referred to herein as the "Security
Agreement"), grants, as security for the Obligations, a security interest to
Mortgagee in that portion of the Mortgaged Property constituting fixtures or
personal property; and
(iii) assigns and transfers to Mortgagee, as security for the
Obligations, all of the Leases (as defined in Exhibit B) and all of the Rents
---------
(as defined in Exhibit B) and other benefits derived from any Leases, whether
---------
now existing or hereafter created.
All of Mortgagor's right, title and interest in and to the following described
property now or hereafter located upon the Premises (as hereinafter defined), or
appurtenant thereto, or used or to be used in connection with the present or
future use, construction upon, leasing, sale, operation or occupancy of the
Premises is herein collectively referred to as the "Mortgaged Property":
GRANTING CLAUSE FIRST
Land
1. The parcel of land more particularly described in Exhibit A attached
---------
hereto and by this reference incorporated herein, together with all strips and
gores within or adjoining such property, all estate, right, title, interest,
claim or demand whatsoever of Mortgagor in the streets, roads, sidewalks,
alleys, and ways adjacent thereto (whether or not vacated and whether public or
private and whether open or proposed), all vaults or chutes adjoining such land,
all of the tenements, hereditaments, easements, reciprocal easement agreements,
rights pursuant to any trackage agreement, rights to the use of common drive
entries, rights-of-way and other rights, privileges and appurtenances thereunto
belonging or in any way pertaining thereto, all reversions, remainders, dower
and right of dower, curtesy and right of curtesy, all of the air space and right
to use said air space above such property, all transferable development rights
arising therefrom or transferred thereto, all water and water rights (whether
riparian, appropriative or otherwise, and whether or not appurtenant) and shares
of stock evidencing the same, all mineral, mining, gravel, oil, gas, hydrocarbon
substances and other rights to produce or share in the production of anything
related to such property, all drainage, crop, timber, agricultural, and
horticultural rights with respect to such property, and all other appurtenances
appurtenant to such property, including without limitation, any now or hereafter
belonging or in anywise appertaining thereto, and all claims or demands of
Mortgagor, either at law or in equity, in possession or expectancy, now or
hereafter acquired, of, in or to the same (all of the foregoing being referred
to herein, collectively, as the "Land");
GRANTING CLAUSE SECOND
Improvements
2. The Improvements described in Exhibit B attached hereto and by this
---------
reference incorporated herein. The Land and the Improvements are referred to
herein, collectively, as the "Premises";
XVI-6
GRANTING CLAUSE THIRD
Various Collateral
3. To the extent granted in, and subject to the terms and provisions of,
the Security Agreement and the Financing Agreements, the Equipment, Materials,
Specifications and Security Deposits described in Exhibit B attached hereto and
---------
by this reference incorporated herein and any other property described in
Exhibit B and not described in any other Granting Clause (collectively, the
---------
"Various Collateral");
GRANTING CLAUSE FOURTH
Refunds
4. To the extent granted in, and subject to the terms and provisions of,
the Security Agreement and the Financing Agreements, the Refunds described in
Exhibit B attached hereto and by this reference incorporated herein;
---------
GRANTING CLAUSE FIFTH
Insurance
5. To the extent granted in, and subject to the terms and provisions of,
the Security Agreement and the Financing Agreements, the Insurance Proceeds
described in Exhibit B attached hereto and by this reference incorporated
---------
herein;
GRANTING CLAUSE SIXTH
Condemnation Proceeds
6. The Condemnation Proceeds described in Exhibit B attached hereto and by
---------
this reference incorporated herein, subject to the terms and provisions of the
Security Agreement and the Financing Agreements;
GRANTING CLAUSE SEVENTH
Permits
7. The Permits described in Exhibit B attached hereto and by this
---------
reference incorporated herein, subject to the terms and provisions of the
Security Agreement;
GRANTING CLAUSE EIGHTH
Records
8. To the extent granted in, and subject to the terms and provisions of,
the Security Agreement and the Financing Agreements, the Records described in
Exhibit B attached hereto and by this reference incorporated herein;
---------
XVI-7
GRANTING CLAUSE NINTH
Options
9. The Options described in Exhibit B attached hereto and by this
---------
reference incorporated herein, subject to the terms and provisions of the
Security Agreement;
GRANTING CLAUSE ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Rights described in Exhibit B attached hereto and
---------
by this reference incorporated herein, subject to the terms and provisions of
the Security Agreement;
GRANTING CLAUSE ELEVENTH
After Acquired Property
11. All real property (and, to the extent granted in, and subject to the
terms and provisions of, the Security Agreement and the Financing Agreements,
all personal property) hereafter acquired or constructed by Mortgagor of the
type described in the foregoing Granting Clauses and located upon the Premises,
or appurtenant thereto, or used or to be used in connection with the present or
future use, construction upon, leasing, sale, operation or occupancy of the
Premises, which shall forthwith, upon acquisition or construction thereof by
Mortgagor and without any act or deed by Mortgagor or Mortgagee, become subject
to the lien and security interest of this Mortgage as if such property were now
owned by Mortgagor and were specifically described in this Mortgage and were
specifically conveyed or encumbered hereby subject to the terms and provisions
of the Security Agreement; and
GRANTING CLAUSE TWELFTH
Accessions And Proceeds
12. All accessions, additions, replacements, substitutions, renewals or
attachments to, and proceeds of, any of the foregoing real property (and, to the
extent granted in, and subject to the terms and provisions of, the Security
Agreement and the Financing Agreements, any of the foregoing personal property).
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee WITH POWER
OF SALE and its successors and assigns, for the uses and purposes set forth
herein, forever.
B. OBLIGATIONS.
This Mortgage is given to secure ratably and equally the payment and
performance of the following obligations (collectively referred to as the
"Obligations"):
XVI-8
1. All "Obligations" of Mortgagor under, and as defined in the following
agreements, payment and performance of which have been unconditionally
guaranteed by Mortgagor pursuant to the Subsidiary Guaranty: (a) that certain
Amended and Restated Credit Agreement dated as of even date herewith by and
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P. (the "Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings,
L.P. ("Holdings"), as guarantor, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as arranger
and syndication agent, the lenders listed on the signature pages thereof (each
individually referred to herein as an "Amended and Restated Facility Lender" and
collectively as "Amended and Restated Facility Lenders"), DLJ Capital Funding,
Inc., as documentation agent, and Agent, as administrative and collateral agent,
and any and all amendments, modifications, supplements, restatements,
extensions, renewals or replacements thereof (such Amended and Restated Credit
Agreement, and any and all amendments, modifications, supplements, restatements,
extensions, renewals or replacements thereof are collectively referred to herein
as the "Amended and Restated Credit Agreement"), including, without limitation,
(i) the due and punctual payment of the indebtedness, together with interest
thereon and other amounts payable with respect thereto, owed under the Notes (as
defined in the Amended and Restated Credit Agreement) (including, without
limitation, all obligations thereunder in respect of the Term Notes, the
Revolving Notes and the Swing Line Note (as defined in the Amended and Restated
Credit Agreement)), and (ii) the due and punctual payment of all reimbursement
obligations in respect of the Letters of Credit together with interest thereon
and other amounts payable with respect thereto; and (b) that certain Term Loan
Credit Agreement dated as of July 22, 1998 by and among the Company, Holdings,
as guarantor, ▇▇▇▇▇▇▇ Sachs Credit Partners, L.P. as arranger and syndication
agent, the lenders listed on the signature pages thereof (each individually
referred to herein as a "Term Facility Lender" and collectively as "Term
Facility Lenders"), DLJ Capital Funding, Inc., as documentation agent, and
Agent, as administrative and collateral agent, and any and all amendments,
modifications, supplements, restatements, extensions, renewals or replacements
thereof (such Term Loan Credit Agreement, and any and all amendments,
modifications, supplements, restatements, extensions, renewals or replacements
thereof are collectively referred to herein as the "Term Credit Agreement") (the
Amended and Restated Credit Agreement and the Term Credit Agreement are
collectively referred to as the "Financing Agreements", and the Amended and
Restated Facility Lenders and the Term Facility Lenders are collectively
referred to herein as the "Lenders");
2. Payment and performance of all obligations of Mortgagor or any of its
Affiliates under any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement or other similar agreement or arrangement entered
into with one or more of the Lenders or Affiliates thereof in connection with
the Financing Agreements (an "Interest Rate Agreement");
3. Payment and performance of all obligations of Mortgagor under, with
respect to or arising in connection with this Mortgage, including, without
limitation, all
XVI-9
obligations to Mortgagee for fees, costs and expenses (including attorneys' fees
and disbursements) as provided therein and herein;
4. Payment and performance of all obligations of Mortgagor to the Lenders
and/or Mortgagee for fees, costs and expenses required to be paid by Mortgagor
under the "Loan Documents" (as defined in the Amended and Restated Credit
Agreement) (the "Amended and Restated Loan Documents") and under the "Loan
Documents" (as defined in the Term Credit Agreement) (the "Term Loan Documents";
collectively with the Amended and Restated Loan Documents, the "Loan Documents")
including, without limitation fees, costs and expenses (including attorneys'
fees and disbursements), all becoming due as provided therein;
5. Payment of all sums advanced by the Lenders or Mortgagee in accordance
with the provisions of this Mortgage or the other Loan Documents to protect the
Mortgaged Property, with interest thereon at the Agreed Rate (defined below);
6. Payment of all sums advanced and costs and expenses incurred by the
Lenders or Mortgagee in accordance with the terms of the Loan Documents in
connection with the Obligations or any part thereof, any renewal, extension or
change of or substitution for the Obligations or any part thereof, or the
acquisition or perfection of the security therefor, whether such advances, costs
and expenses were made or incurred at the request of Mortgagor, Mortgagee or any
Lender;
7. Payment of all other sums, with interest thereon, which may hereafter
be loaned to Mortgagor, or its successors or assigns, by the Lenders or
Mortgagee, or their respective successors or assigns, or by the holder of any of
the "Notes" (as defined in the Amended and Restated Credit Agreement) (the
"Amended and Restated Notes") or the "Notes" (as defined in the Term Credit
Agreement) (the "Term Notes"; collectively with the Amended and Restated Notes,
the "Notes"), pursuant to an agreement that recites that the repayment of such
sums and Mortgagor's other obligations under such agreement are secured by this
Mortgage;
8. Payment of all sums with respect to the Obligations that would become
due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. (S)362(a), including, without limitation, interest,
fees and other charges that, but for the filing of a petition in bankruptcy with
respect to Mortgagor would accrue on the Obligations, whether or not a claim is
alleged against Mortgagor for such sums in any such bankruptcy proceeding;
9. Due, prompt and complete performance of every obligation, covenant and
agreement of Mortgagor contained in any agreement now or hereafter executed by
Mortgagor which recites that the obligations thereunder are secured by this
Mortgage from
XVI-10
and after the date on which all mortgage recording taxes, general intangible
taxes or other taxes payable in respect of obligations have been paid; and
10. All renewals, extensions, amendments, modifications and changes and
supplements of, or substitutions or replacements for, all or any part of the
items described in Paragraphs 1 through 9 above.
----------------------
C. FUTURE ADVANCES.
In addition to all other indebtedness secured by this Mortgage, to the
extent provided for in the Security Agreement or the Financing Agreements, this
Mortgage shall also secure and constitute a first Lien on the Mortgaged Property
for:
1. all future advances (including all extensions, renewals and
modifications of such future advances) that relate directly or indirectly to the
Financing Agreements or to this Mortgage and are made as provided in any of the
Loan Documents by the Lenders or Mortgagee to Mortgagor or otherwise as provided
in any of the Loan Documents for any purpose so related after the date of this
Mortgage; and
2. all sums advanced or paid pursuant to the terms of this Mortgage and
in accordance with the terms and provisions of the Financing Agreements by
Mortgagee upon a default or Event of Default under the terms of this Mortgage
(a) for real estate taxes, charges and assessments that may be imposed by law
upon the Premises, (b) for premiums on insurance policies covering the Premises,
(c) for expenses incurred in upholding the Lien of this Mortgage, including but
not limited to the expenses of any litigation to prosecute or defend the rights
and Lien created by this Mortgage, (d) to which Mortgagee becomes subrogated,
upon payment, under recognized principles of law or equity, or under express
statutory authority or (e) for any other purpose, in each case, with interest
thereon at the Agreed Rate; and
3. all other sums expended by Mortgagee in accordance with the terms
of this Mortgage (including without limitation the amounts advanced pursuant
to Sections 2.4, 2.5 and 5.4 hereof),
------------ --- ---
just as if such advances were made on the date of this Mortgage. Any future
advances shall be made in accordance with the terms of the Financing Agreements,
or at the option of Mortgagee, as provided herein or in the other Loan
Documents. The total amount of the indebtedness that may be secured by this
Mortgage may increase or decrease from time to time.
XVI-11
D. DEFINITIONS AND INTERPRETATION.
Supplementing the definitions listed below in this Paragraph D, the
-----------
definitions set forth in the Financing Agreements and the provisions with
respect to interpretation and construction of the Loan Documents as set forth in
the Financing Agreements are hereby incorporated by reference into this Mortgage
with the same effect as if set forth in full herein. The following terms used
in this Mortgage shall have the following meanings:
"Agreed Rate" means, (a) with respect to sums advanced by the Amended and
Restated Facility Lenders or Mortgagee on their behalf, the rate for post
maturity interest specified in Section 2.2E of the Amended and Restated Credit
------------
Agreement, and (b) with respect to sums advanced by the Term Facility Lenders or
Mortgagee on their behalf, the rate for post maturity interest specified in
Section 2.2E of the Term Credit Agreement.
------------
"Applicable Law" means, collectively, all statutes, laws, rules,
regulations, ordinances, orders, decisions, writs, judgments, decrees and
injunctions of governmental authorities (including Environmental Laws) affecting
Mortgagor or the Mortgaged Property or any part thereof (including the
acquisition, development, construction, renovation, occupancy, use, improvement,
alteration, management, operation, maintenance, repair or restoration thereof),
whether now or hereafter enacted and in force, and all authorizations relating
thereto, and all covenants, conditions and restrictions contained in any
instruments, either of record or known to Mortgagor, at any time in force
affecting any Premises or any part thereof, including any such covenants,
conditions and restrictions which may (i) require improvements, repairs or
alterations in or to such Premises or any part thereof or (ii) in any way limit
the use and enjoyment thereof; for purposes of usury, Applicable Law means the
law of the State of New York applicable to maximum rates of interest.
"Impositions" means all real property taxes and assessments, of any kind or
nature whatsoever, including, without limitation, vault, water and sewer rents,
rates, charges and assessments, levies, permits, inspection and license fees and
other governmental, quasi-governmental or nongovernmental levies or assessments
such as maintenance charges, owner association dues or charges or fees resulting
from covenants, conditions and restrictions affecting the Premises, assessments
resulting from inclusion of the Premises in any taxing district or municipal or
other special district, any of which are assessed or imposed upon the Premises,
or become due and payable, and which create or may create a Lien upon the
Premises, or any part thereof. In the event that any penalty, interest or cost
for nonpayment of any Imposition becomes due and payable, such penalty, interest
or cost shall be included within the term "Impositions".
"Secured Party" means Mortgagee, in its capacity as Collateral Agent for
and representative of the Lenders and any Lender Counterparties (as defined in
the Security Agreement).
"Transfer" means any conveyance, assignment, sale, mortgaging, encumbrance,
pledging, hypothecation, granting of a security interest in, granting of options
with respect to or other disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
XVI-12
consideration or of record) all or any portion of any legal or beneficial
interest (i) in all or any portion of the Premises or (ii) in any other assets
of Mortgagor.
▇. ▇▇▇▇ PRIORITIES.
The Lien of this Mortgage secures both the "Obligations" of Mortgagor under
the Amended and Restated Credit Agreement and the Amended and Restated Loan
Documents and the "Obligations" of Mortgagor under the Term Credit Agreement and
the Term Loan Documents. The rights and priorities of the Amended and Restated
Facility Lenders and the Term Facility Lenders with respect to the collateral
encumbered hereby and the proceeds thereof are set forth in that certain
Intercreditor Agreement dated as of even date herewith. Pursuant to such
Intercreditor Agreement, (i) the Amended and Restated Facility Lenders have a
first and prior right and interest in the Collateral (as defined in the
Intercreditor Agreement) and all proceeds of any of the foregoing, and (ii) the
Term Facility Lenders have a second right and interest in the Collateral and all
proceeds of any of the foregoing, subordinate only to the prior right and
interest of the Amended and Restated Facility Lenders.
SECTION 1
[INTENTIONALLY OMITTED]
SECTION 2
COVENANTS AND AGREEMENTS OF MORTGAGOR
2.1 Payment and Performance of Obligations.
--------------------------------------
Mortgagor shall pay when due and perform the Obligations, including,
without limitation, the principal of, and the interest on and other amounts
payable with respect to the indebtedness evidenced by the Notes; all charges,
fees and other sums (including, without limitation, attorneys' fees and
disbursements, late charges, prepayment charges and other amounts and all costs
of collection) to be paid by Mortgagor as provided in this Mortgage or in the
other Loan Documents; the principal and interest on any future advances secured
by this Mortgage; and the principal of and interest on any other indebtedness
secured by this Mortgage.
2.2 Assignment of Policies Upon Foreclosure.
---------------------------------------
In the event of foreclosure of this Mortgage or other transfer of
title or assignment of the Mortgaged Property, the acceptance by Mortgagee (or a
nominee of Mortgagee) of a deed to any part of the Mortgaged Property in lieu of
foreclosure of this Mortgage or in connection with a plan of reorganization
filed under Chapter 11 of the Bankruptcy Code, or the exercise by Mortgagee of
any remedy set forth herein, in extinguishment, in whole or in part, of the debt
secured hereby or upon the acceptance by Mortgagee (or a nominee of Mortgagee)
of a deed to any part of the Mortgaged Property in lieu of foreclosure of this
Mortgage but not in extinguishment, in whole or in part, of the debt secured
XVI-13
hereby, all right, title and interest of Mortgagor in and to all policies of
insurance required pursuant to the Financing Agreements shall inure to the
benefit of and pass to the successor in interest to Mortgagor or the purchaser
or grantee of the Mortgaged Property.
2.3 Inspections.
-----------
To the extent such rights are granted in, and subject to the terms and
provisions of, the Financing Agreements, Mortgagee and its agents,
representatives and employees are authorized to enter, at any reasonable time
and upon reasonable prior notice to Mortgagor, upon or in any part of the
Mortgaged Property for the purpose of inspecting the same and for the purpose of
performing any of the acts they are authorized to perform hereunder or under the
terms of the Loan Documents. Mortgagee agrees that employees of Mortgagor shall
be entitled to accompany Mortgagee and its agents, representatives and employees
during any such inspection or other entry upon the Mortgaged Property, and
Mortgagee and its agents, representatives and employees shall use reasonable
efforts not to interfere with Mortgagor's operations at the Premises in
connection with such inspection or other entry.
2.4 Actions by Mortgagee To Preserve Mortgaged Property.
---------------------------------------------------
If Mortgagor fails to perform any agreement contained herein, to
protect the security hereof, Mortgagee may itself perform, or cause performance
of, such agreement, make any payment or perform any act required to be paid or
performed by Mortgagor under the terms of any of the Loan Documents, and the
expenses of Mortgagee reasonably incurred in connection therewith shall be
payable by Mortgagor in accordance with the Loan Documents. In connection
therewith (without limiting its general and other powers, whether conferred
herein, in any other Loan Document or by law), Mortgagee shall have and is
hereby given the right (without limiting the rights otherwise available to
Mortgagee under any of the other Loan Documents or any other provisions of this
Mortgage), but not the obligation, after Mortgagor's failure to cure within the
period described above, and upon the occurrence and during the continuance of an
Event of Default: (a) to enter upon and take possession of the Mortgaged
Property, (b) to make additions, alterations, repairs and improvements to the
Mortgaged Property which Mortgagee may consider necessary to keep the Mortgaged
Property in good condition and repair, (c) to appear and participate in any
action or proceeding affecting or which may materially adversely affect the
security hereof or the rights or powers of Mortgagee, (d) to pay, purchase,
contest or compromise any claim, charge, Lien or debt which is prohibited under
the Financing Agreements, except for any claims, charges, Liens or debts being
diligently contested in good faith by Mortgagor in appropriate proceedings in
accordance with the terms of the Financing Agreements, (e) to pay any
Impositions except those Impositions being diligently contested in good faith by
Mortgagor in appropriate proceedings in accordance with the terms of the
Financing Agreements and to procure, maintain and pay premiums on the insurance
policies required pursuant to the terms of the Financing Agreements, and (f) in
exercising such powers, to pay necessary expenses, including reasonable fees and
disbursements of counsel or other necessary consultants. No such advance or
performance shall be deemed to have cured any Event of Default. Mortgagor
shall, within ten (10) days after Mortgagee's written demand therefor, pay to
Mortgagee an amount equal to all costs and expenses actually incurred by
Mortgagee in accordance with the provisions set forth herein and in the other
Loan Documents in connection with the exercise by Mortgagee of the foregoing
rights including, without
XVI-14
limitation, costs of evidence of title and of endorsements to title insurance
policies issued to Mortgagee as of the Effective Date (as defined in the Amended
and Restated Credit Agreement), court costs, architectural or engineering
studies, appraisals, surveys and architect's, engineer's, accountant's,
receiver's, trustee's and attorneys' fees, together with interest thereon from
the date of such expenditures at the Agreed Rate. All sums advanced and all
expenses incurred by Mortgagee in accordance with the provisions set forth
herein and in the other Loan Documents in connection with such advances or
actions and all other sums advanced or expenses incurred by Mortgagee hereunder
in accordance with the provisions set forth herein and in the other Loan
Documents (whether required or optional and whether indemnified hereunder or
not) shall be deemed Obligations owing by Mortgagor and shall bear interest from
the date incurred or paid by Mortgagee until paid by Mortgagor at the Agreed
Rate. All such amounts advanced or incurred, and all such interest thereon,
shall be a part of the Obligations and shall be secured by this Mortgage.
Mortgagee, upon making such advance, shall be subrogated to all of the rights of
the person receiving such advance.
2.5 Action by Mortgagee to Protect Interests; Subrogation; Waiver of Offset.
------------------------------------------------------------------------
A. Action by Mortgagee to Protect Interests. If any legal
proceedings are commenced involving the title, interest or Lien, as the case may
be, of Mortgagor or Mortgagee in and to the Mortgaged Property or any part
thereof, or the security of this Mortgage, or the rights or powers of Mortgagee
or Mortgagor hereunder (which proceedings require notice to Agent or the Lenders
pursuant to the Financing Agreements), Mortgagee or the Mortgaged Property,
Mortgagor shall promptly upon obtaining knowledge of the same give written
notice thereof to Mortgagee and at Mortgagor's own expense shall take all
reasonable steps diligently to defend against any such proceedings; and if an
Event of Default shall have occurred and be continuing, Mortgagee may take such
independent action in connection therewith as it may in its discretion deem
advisable, and all reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, actually incurred by Mortgagee in
connection therewith shall be an Obligation owing by Mortgagor and payable to
Mortgagee, within ten (10) days of Mortgagee's written demand for payment, and
shall bear interest at the Agreed Rate. Mortgagor agrees that if Mortgagor
fails to perform any act which Mortgagor is required to perform under this
Section 2.5A, Mortgagee may (after ten (10) days' written notice to Mortgagor),
but shall not be obligated to, perform or cause to be performed such act, and
any reasonable expense actually incurred by Mortgagee in connection therewith
shall be an Obligation owing by Mortgagor and payable to Mortgagee within ten
(10) days of Mortgagee's written demand for payment, and shall bear interest at
the Agreed Rate, and shall be secured by this Mortgage, and Mortgagee shall be
subrogated to all of the rights of the party receiving such payment. The
liabilities of Mortgagor as set forth in this Section 2.5 shall survive the
termination of this Mortgage or of any other Loan Document.
B. Subrogation. Mortgagor hereby waives any and all right to claim
or recover against Mortgagee and the Lenders, and their respective officers,
employees, agents and representatives, for loss of or damage to Mortgagor, the
Mortgaged Property, Mortgagor's other property or the property of others under
Mortgagor's control from any cause insured against or required to be insured
against by the provisions of this Mortgage.
XVI-15
C. Waiver of Offset. All sums payable by Mortgagor pursuant to this
Mortgage shall be paid (except as otherwise expressly provided herein or in any
other Loan Document) without notice, demand, counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction,
and the Obligations and liabilities of Mortgagor hereunder shall in no way be
released, discharged or otherwise affected (except as otherwise expressly
provided herein or in any other Loan Document) by reason of: (i) any damage to
or destruction of or any condemnation or similar taking of the Mortgaged
Property or any part thereof; (ii) any restriction or prevention of or
interference by any third party with any use of the Mortgaged Property or any
part thereof; (iii) any title defect or encumbrance or any eviction from the
Premises or any part thereof by title paramount or otherwise; (iv) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to Mortgagee or the Lenders, or
any action taken with respect to this Mortgage by any trustee or receiver of
Mortgagee, or by any court, in any such proceeding; (v) any claim which
Mortgagor has or might have against Mortgagee; (vi) any default or failure on
the part of Mortgagee to perform or comply with any of the terms hereof or of
any other agreement with Mortgagor; or (vii) any other occurrence whatsoever,
whether or not Mortgagor shall have notice or knowledge of any of the foregoing.
Except as expressly provided herein, Mortgagor waives all rights now or
hereafter conferred by statute or otherwise to any abatement, suspension,
deferment, diminution or reduction of any sum secured hereby and payable by
Mortgagor.
2.6 Restrictions on Transfer of Mortgaged Property by Mortgagor.
------------------------------------------------------------
Mortgagor agrees that any Transfer of the Mortgaged Property, or any
portion thereof, shall be made in accordance with the provisions of the
Financing Agreements. The provisions of this Section 2.6 shall apply to each
and every Transfer of the Mortgaged Property or any portion thereof.
2.7 Incorporation by Reference.
---------------------------
Mortgagor hereby makes to Mortgagee all of the affirmative and
negative covenants relating to the Mortgaged Property that are set forth in the
Financing Agreements, which affirmative and negative covenants are incorporated
herein by reference as of the date hereof. In the event of a conflict between
the provisions of this Mortgage and the Financing Agreements, it is the
intention of Mortgagor and Mortgagee that both such documents shall be read
together and construed, to the fullest extent possible, to be in concert with
each other. In the event of a conflict that cannot be resolved as aforesaid,
the provisions of the Financing Agreements shall control and govern and
Mortgagor shall comply therewith.
2.8 Additional Security.
-------------------
No other security now existing, or hereafter taken, to secure the
Obligations shall be impaired or affected by the execution of this Mortgage; and
all additional security shall be taken, considered and held as cumulative. The
taking of additional security, execution of partial releases of the security, or
any extension of the time of payment or performance of the Obligations shall not
diminish the force, effect or Lien of this Mortgage and shall not affect or
impair the liability of any maker, surety, guarantor or endorser for the payment
or performance of said Obligations. Neither the acceptance of this Mortgage
XVI-16
nor its enforcement, whether by court action or pursuant to the power of sale or
other powers herein contained, shall prejudice or in any manner affect
Mortgagee's right, to realize upon or enforce any other security now or
hereafter held by Mortgagee, it being agreed that Mortgagee shall be entitled to
enforce this Mortgage and any other security now or hereafter held by Mortgagee
in such order and manner as it may in its absolute discretion determine.
2.9 Further Acts.
------------
Mortgagor shall do and perform all acts as required under the
Financing Agreements or as necessary to keep valid and effective the Lien hereof
and to carry into effect its objective and purposes. Promptly upon request, from
time to time, of Mortgagee and at Mortgagor's expense, Mortgagor shall execute,
acknowledge and deliver to Mortgagee such other and further instruments and do
such other acts as in the reasonable opinion of Mortgagee may be necessary or
reasonably requested by Mortgagee to (a) grant to Mortgagee a first priority
perfected Lien on all of the Mortgaged Property to secure all of the
Obligations, (b) grant to Mortgagee, to the fullest extent permitted by
Applicable Law, the right to foreclose on the Mortgaged Property nonjudicially,
upon the occurrence and during the continuance of an Event of Default, (c)
correct any defect or error which may be discovered in the contents of this
Mortgage (including, without limitation, all exhibits and/or schedules hereto)
or any other Loan Document or in the recording or filing of this Mortgage or any
other Loan Document, (d) identify more fully and subject to the Liens created
hereby and by the other Loan Documents any property intended by the terms hereof
and of the other Loan Documents to be covered hereby and thereby (including any
renewals, additions, substitutions, replacements or appurtenances to the
Mortgaged Property), (e) assure the first priority of this Mortgage and of such
Liens, and (f) otherwise effectuate the intent of this Mortgage. In the event
of the acquisition by Mortgagor or any affiliate of Mortgagor of any greater
estate in the Premises or in any other part of the Mortgaged Property or the
acquisition by Mortgagor of any after acquired property as described in Granting
--------
Clause Eleventh, Mortgagor shall notify Mortgagee and, concurrently with the
---------------
consummation of such acquisition, shall execute and record (and shall cause
Mortgagor's affiliate, as the case may be, to execute and record) an instrument
sufficient to extend and spread the Lien of this Mortgage to encumber such
acquired interest or after acquired interest as a mortgage Lien. To the full
extent permitted under Applicable Law and in accordance with the grants made by
Mortgagor in Granting Clause Tenth and Granting Clause Eleventh whether or not
--------------------------------------------------
Mortgagor has executed and recorded the instrument described in the preceding
sentence, this Mortgage shall automatically be a Lien on such acquired interest
or after acquired interest. Upon request by Mortgagee, Mortgagor shall supply
evidence of fulfillment of each of the covenants herein contained concerning
which a request for such evidence has been made. Mortgagor hereby irrevocably
appoints Mortgagee as its attorney-in-fact, coupled with an interest and with
full power of substitution, to take the above actions and to perform such
obligations on behalf of Mortgagor, at Mortgagor's sole expense, if Mortgagor
fails to fully comply with Mortgagor's obligations under this Section 2.9.
-----------
Without limiting the generality of the foregoing, Mortgagor shall promptly and,
insofar as not contrary to Applicable Law, at Mortgagor's own expense, record,
rerecord, file and refile in such offices, at such times and as often as may be
necessary, this Mortgage, additional mortgages, deeds of trust and deeds to
secure debt, and every other instrument in addition or supplemental hereto,
including applicable financing statements, as may be necessary to create,
perfect, maintain and preserve the Liens (and priority thereof) intended to be
created hereby and by the other Loan Documents and the rights and
XVI-17
remedies of Mortgagee hereunder and thereunder. Upon request by Mortgagee,
Mortgagor shall supply evidence reasonably satisfactory to Mortgagee of
fulfillment of each of the covenants herein contained concerning which a request
for such evidence has been made.
2.10 Offsite Improvements.
--------------------
In the event Mortgagor constructs or installs improvements or
Equipment necessary for the operation of the Premises on real property or any
interest in real property (for example, an easement, license or lease) that is
not subject to the Lien of this Mortgage on the date hereof, Mortgagor agrees to
spread the Lien of this Mortgage to cover such improvements, Equipment, real
property and/or interest in real property and to grant Mortgagee rights
(including, but not limited to, easements or reciprocal easement agreements)
with respect to such improvements, Equipment, real property and/or interest in
real property, which rights shall be sufficient in Mortgagee's reasonable
judgment to enable Mortgagee and any future owner or holder of Mortgagor's
interest in the Premises to enjoy the full and unrestricted use of such
improvements and Equipment upon a foreclosure of the Lien of this Mortgage.
2.11 Utilities.
----------
Mortgagor shall pay or cause to be paid prior to becoming delinquent
all utility charges which are incurred for the benefit of the Mortgaged Property
or which may become a Lien against the Mortgaged Property for gas, steam,
electricity, telephone, water, sewer services and all other utilities furnished
to the Mortgaged Property and all other assessments or charges of a similar
nature, whether public or private, affecting or related to the Mortgaged
Property or any portion thereof, whether or not such taxes, assessments or
charges are or may become Liens thereon; provided that no such charges, liens or
--------
assessments need be paid if they are being contested pursuant to the
requirements for contesting set forth in the Financing Agreements.
2.12 Hazardous Materials and Environmental Laws.
-------------------------------------------
Mortgagor shall comply with the provisions of the Financing Agreements
respecting Hazardous Materials, Environmental Claims and Environmental Laws.
SECTION 3
ASSIGNMENT OF RENTS AND LEASES
3.1 Assignment of Rents and Leases.
-------------------------------
In furtherance of and in addition to the assignment made by Mortgagor
in Granting Clause A(iii) of this Mortgage, Mortgagor hereby absolutely and
----------------------
unconditionally assigns, sells, transfers and conveys to Mortgagee all of its
right, title and interest in and to all Leases, whether now existing or
hereafter entered into, and all of its right, title and interest in and to all
Rents. It is the intention of Mortgagor and Mortgagee that this assignment be
treated and construed as an absolute assignment and not an assignment
XVI-18
for additional security only. So long as no Event of Default shall have
occurred and be continuing, Mortgagor shall have a license from Mortgagee to
exercise all rights extended to the landlord under the Leases, including the
right to observe, perform, comply with and discharge all of the obligations of
the landlord thereunder, the right to demand and receive performance under the
Leases, the right to enforce all rights and exercise all remedies under the
Leases, the right to terminate or amend any Lease and the right to receive and
collect all Rents and to use the same; provided, however, that such rights may
-----------------
be exercised by Mortgagor only to the extent they are not restricted under the
Financing Agreements. Upon the occurrence and during the continuance of an
Event of Default, whether or not legal proceedings have commenced, and without
regard to waste, adequacy of security for the Obligations or solvency of
Mortgagor, the license herein granted shall automatically expire and terminate,
without notice by Mortgagee (any such notice being hereby expressly waived by
Mortgagor).
3.2 No Limitation of Rights.
------------------------
The assignment of Rents and Leases herein made shall not be construed
to limit in any way Mortgagee's other rights hereunder. Monies received under
the assignments herein made shall not be deemed to have been applied in payment
of any portion of the Obligations unless and until such monies actually are
applied thereto by Mortgagee.
3.3 Sale of Mortgaged Property.
---------------------------
A. Free and Clear of Assignments. Upon any sale of any of the
Mortgaged Property by or for the benefit of Mortgagee pursuant to Section 5
---------
hereof, the Rents attributable to the part of the Mortgaged Property so sold
shall be included in such sale and shall pass to the purchaser free and clear of
(i) the assignment by Mortgagor in Granting Clause A(iii) of this Mortgage and
----------------------
(ii) the provisions of this Section 3.
---------
B. No Obligations on Mortgagee. It is neither the intent nor the
effect of this Mortgage nor the other Loan Documents (other than any
Subordination, Non-Disturbance and Attornment Agreement between Mortgagee and
any Tenant (as hereinafter defined)) to impose any obligation on Mortgagee,
including (i) any liability under the covenant of quiet enjoyment contained in
any Lease or contained in any Applicable Law, in the event of a sale of the
Mortgaged Property or any part thereof pursuant to this Mortgage or (ii) any
liability to any Tenant arising (whether in connection with the elimination of
such Tenant's equity of redemption in the Mortgaged Property or otherwise) out
of (A) the naming of such Tenant as a party defendant in any action to foreclose
this Mortgage, or (B) the sale of the Mortgaged Property pursuant to the power
of sale reserved to Mortgagee herein. Notwithstanding anything herein to the
contrary, under no circumstances shall Mortgagee be subject to any offsets,
claims or defenses which a Tenant might have against Mortgagor or any prior
landlord with respect to any Lease, whether or not Mortgagee shall have
succeeded to the interests of landlord under any such Lease. As used herein,
the term "Tenant" shall mean any tenant or occupant of the Mortgaged Property,
whether such tenant or occupant is leasing, renting, using or occupying a
portion of the Mortgaged Property now or in the future.
XVI-19
3.4 Term of Assignment.
-------------------
The assignment and grant made in Granting Clause A(iii) of this
----------------------
Mortgage and in this Section 3 shall continue in effect until release of this
---------
Mortgage of record or indefeasible payment in full of the Obligations. The
execution of this Mortgage constitutes and evidences the irrevocable consent of
Mortgagor to the entry upon and the taking possession of the Premises, or any
part thereof, by Mortgagee upon the occurrence and during the continuance of an
Event of Default pursuant to such grant in accordance with the terms set forth
in this Mortgage and the terms hereof whether by foreclosure or other remedy and
at Mortgagee's option and election, with or without application for a receiver.
Mortgagor represents and warrants to Mortgagee that Mortgagee has taken all
actions necessary to obtain, and Mortgagee shall (upon recordation of this
Mortgage) have, as and to the extent permitted under Applicable Law, a valid and
fully perfected, first priority, present assignment of the Rents arising out of
the Leases and all security for such Leases, including cash or securities
deposited as security under such Leases subject to the prior right of the
Tenants making such deposits. Mortgagee has no obligation whatsoever in respect
of security for any Leases except and only to the extent such security is
actually delivered to Mortgagee, whether or not Mortgagor now has or previously
had possession of such security.
3.5 Perfection Upon Recordation.
----------------------------
Mortgagor acknowledges and agrees that, upon recordation of this
Mortgage, Mortgagee's interest in the Rents shall be deemed to be fully
perfected, "▇▇▇▇▇▇" and enforced as to Mortgagor and all third parties,
including, without limitation, any subsequently appointed trustee in any case
under the Bankruptcy Code, without the necessity of (a) commencing a foreclosure
action with respect to this Mortgage, (b) furnishing notice to Mortgagor or
Tenants under the Leases, (c) making formal demand for the Rents, (d) taking
possession of the Premises as a lender-in-possession, (e) obtaining the
appointment of a receiver of the rents and profits of the Premises, (f)
sequestering or impounding the Rents or (g) taking any other affirmative action.
3.6 Bankruptcy Provisions.
------------------------
Without limitation of the provisions of Section 4 hereof or the
---------
absolute nature of the assignment of the Rents hereunder, Mortgagor and
Mortgagee agree that (a) this Mortgage shall constitute a "security agreement"
for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest
created by this Mortgage extends to property of Mortgagor described herein
acquired before the commencement of a case in bankruptcy and to all amounts paid
as Rents and (c) such security interest shall extend to all Rents acquired by
the estate after the commencement of any case in bankruptcy. Without limitation
of the absolute nature of the assignment of the Rents hereunder, to the extent
Mortgagor (or Mortgagor's bankruptcy estate) shall be deemed to hold any
interest in the Rents after the commencement of a voluntary or involuntary
bankruptcy case, Mortgagor hereby acknowledges and agrees that such Rents are
and shall be deemed to be "cash collateral" under Section 363 of the Bankruptcy
Code. Mortgagor may not use the cash collateral without the consent of
Mortgagee and/or an order of any bankruptcy court pursuant to 11 U.S.C.
363(c)(2), and Mortgagor hereby waives any right it may have to assert that such
XVI-20
Rents do not constitute cash collateral. No consent by Mortgagee to the use of
cash collateral by Mortgagor shall be deemed to constitute Mortgagee's approval,
as the case may be, of the purpose for which such cash collateral was expended.
SECTION 4
SECURITY AGREEMENT
4.1 Grant of Security; Incorporation by Reference.
----------------------------------------------
This Mortgage shall, in addition to constituting a mortgage Lien as to
those parts of the Mortgaged Property classified as real property (including
fixtures to the extent they are real property), to the extent granted in, and
subject to the terms and provisions of, the Security Agreement, constitute a
security agreement within the meaning of the Uniform Commercial Code or within
the meaning of the common law with respect to those parts of the Mortgaged
Property classified as personal property (including fixtures to the extent they
are personal property), to further secure the payment and performance of the
Obligations and the performance of all of Mortgagor's Obligations, covenants and
agreements under the other Loan Documents. Mortgagee shall have all rights
granted to the Secured Party pursuant to the Security Agreement. The provisions
set forth in the Security Agreement are hereby incorporated by reference into
this Mortgage with the same effect as if set forth in full herein. In the event
of a conflict between the provisions of Section 4 of this Mortgage and the
---------
Security Agreement, it is the intention of Mortgagor and Mortgagee that both
such documents shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of a conflict that
cannot be resolved as aforesaid, the provisions of the Security Agreement shall
control and govern and Mortgagor shall comply therewith.
4.2 Fixture Filing Financing Statements.
------------------------------------
Portions of the Mortgaged Property are goods which are or are to
become fixtures, and the real estate concerned is described in Exhibit A hereto.
---------
Mortgagor expressly covenants and agrees that the filing of this Mortgage in the
real property records of the county where the Premises is located shall operate,
at the time of filing therein, as a financing statement filed as a fixture
filing in accordance with Section 9-401(1)(b) of the Uniform Commercial Code of
the state in which the Premises is located. The address of Mortgagor (the
debtor) and the address of Mortgagee (the secured party) appear in Exhibit C
---------
attached to this Mortgage. The name of the record owner of the Land appears in
Exhibit A attached hereto.
---------
4.3 Mortgagee as Secured Party.
---------------------------
If and to the extent that Mortgagee shall act as the secured party for
any security interest created in the Mortgaged Property, Mortgagor acknowledges
and agrees that Mortgagee may do so. As such, Mortgagee shall have all the
rights of the secured party, and shall observe all of the requirements of the
secured party, contained in this Section 4 and the Security Agreement.
---------
XVI-21
SECTION 5
DEFAULTS AND REMEDIES
5.1 Events of Default.
------------------
The occurrence of any of the following events ("Events of Default")
shall, to the extent provided in, and subject to the terms and provisions of,
the Financing Agreements, make all amounts then remaining unpaid on the
Obligations due and payable, and this Mortgage and the Lien evidenced or created
hereby shall be subject to foreclosure and may be foreclosed or the Mortgaged
Property may be sold pursuant to the power of sale reserved to Mortgagee herein,
in any manner provided for herein or provided for by law:
A. Any "Event of Default" as defined in either of the Financing
Agreements shall occur (after giving effect to any applicable notice or grace
periods provided therein).
5.2 Fixtures.
---------
Upon the occurrence and during the continuance of any of the Events of
Default, Mortgagee may, to the extent permitted under Applicable Law, elect to
treat the fixtures included in the Mortgaged Property either as real property or
as personal property, or both, and proceed to exercise such rights as apply
thereto. With respect to any sale of real property included in the Mortgaged
Property made under the powers of sale herein granted and conferred, Mortgagee
may, to the extent permitted by Applicable Law, include in such sale any
personal property and fixtures included in the Mortgaged Property and relating
to such real property.
5.3 Remedies.
---------
A. Rights of Mortgagee; Rights of Entry; Rights of Sale. Upon the
occurrence and during the continuance of any of the Events of Default, in
addition to all other powers, rights and remedies herein granted or by law or at
equity conferred, Mortgagee, in its sole discretion and at its sole election and
without further demand, may do any one or more of the following in any order or
manner that Mortgagee elects, it being expressly understood that no remedy
provided herein is intended to be exclusive of any other remedy provided herein
or in any of the other Loan Documents, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given herein or now or
hereafter existing under Applicable Law (including all rights and remedies
provided under the applicable provisions of the laws of the state in which the
Premises is located):
(i) Mortgagee may either foreclose upon all or any portion of
the Mortgaged Property or sell all or any portion of the Mortgaged
Property pursuant to the power of sale granted to Mortgagee herein
(the power of sale permitted and provided by applicable statute
being hereby expressly granted by Mortgagor to Mortgagee) with
respect to all or any portion of the Mortgaged Property, provided
that Mortgagee may proceed as to both real and personal property in
accordance with its and their rights and remedies as to real
property as
XVI-22
required by Applicable Law, and no such sale shall affect any other rights which
Mortgagee may have or enjoy at law or pursuant to this Mortgage, including,
without limitation, the right to seek a personal or deficiency judgment against
Mortgagor. And in addition Mortgagee shall have all of the rights and remedies
of a mortgagee under a mortgage granted, conferred or permitted by Applicable
Law, and shall, to the extent permitted by Applicable Law, have the right and
power, but not the obligation, to enter upon and take immediate possession of
the Premises or any part thereof, without interference from Mortgagor to exclude
Mortgagor therefrom, to hold, use, operate, manage and control such real
property, to make all such repairs, replacements, additions and improvements to
the same as Mortgagee in its sole discretion deems necessary, and to demand,
collect and retain the Rents as provided in Section 3 hereof.
---------
(ii) Mortgagee, with respect to any or all of the Mortgaged Property,
in lieu of or in addition to exercising any other power, right or remedy herein
granted or by law or equity conferred, may, without notice, demand or
declaration of default, which are hereby waived by Mortgagor, and without regard
to the solvency of Mortgagor and without regard to the then value of the
Mortgaged Property or waste, proceed by an action or actions in equity or at law
for the seizure and sale of the Mortgaged Property or any part thereof, for the
specific performance of any covenant or agreement herein contained or in aid of
the execution of any power, right or remedy herein granted or by law or equity
conferred, for the foreclosure or sale of the Mortgaged Property or any part
thereof under the judgment or decree of any court of competent jurisdiction, for
the appointment of a receiver (without any requirement to post a receiver's bond
and without regard to the value of the Mortgaged Property or solvency of
Mortgagor) pending any foreclosure hereunder or the sale of any Mortgaged
Property or any part thereof or for the enforcement of any other appropriate
equitable or legal remedy. Such receiver shall have the power to collect the
rents, issues, profits, earnings, and income from the Mortgaged Property and
shall have all other powers which may be necessary or usual in such cases for
the protection, possession, control, management and operation of the Mortgaged
Property. Such receiver may apply the net income from the Mortgaged Property as
payment of the Obligations secured hereby in the manner and order set forth in
the applicable Loan Documents. Mortgagor agrees that a receiver may be
appointed without any notice to Mortgagor whatsoever and hereby waives notice.
(iii) Mortgagee shall have all of the rights and remedies of a
secured party as set forth in the Security Agreement. Mortgagee, pursuant to
Section 9-501(4) of the Uniform Commercial Code, as such Section is currently
constituted or may be hereafter amended, shall have the option of proceeding
under the Uniform Commercial Code as to that portion of the Mortgaged Property
constituting personal property or of proceeding as to the Mortgaged Property and
without regard to the adequacy of Mortgagee's security for the Obligations, or
any part or component thereof, including both the real and personal property, in
accordance with Mortgagee's rights and remedies in respect of the real property.
(iv) Mortgagee may, subject to any mandatory requirements of
Applicable Law, sell or have sold the Mortgaged Property or interests therein or
any part thereof at one or more sales, as an entirety or in separate parcels, at
such place or places and otherwise in such
XVI-23
manner and upon such notice as may be required by Applicable Law or by this
Mortgage, or, in the absence of any such requirement, as Mortgagee may deem
appropriate. Mortgagee shall make a conveyance to the purchaser or purchasers
thereof without, to the extent permitted by Applicable Law, any warranties
express or implied. Subject to Applicable Law, Mortgagee may postpone the sale
of such Mortgaged Property or interests therein or any part thereof by public
announcement at the time and place of such sale, and from time to time
thereafter may further postpone such sale by public announcement made at the
time of sale fixed by the preceding postponement. Sale of a part of the
Mortgaged Property or interests therein or any defective or irregular sale
hereunder will not exhaust the power of sale, and sales may be made from time to
time until all such property is sold without defect or irregularity or the
Obligations are paid and performed in full. Mortgagee shall have the right to
appoint one or more auctioneers or attorneys-in-fact to act in conducting the
foreclosure sale and executing a deed to the purchaser. It shall not be
necessary for any of the Mortgaged Property at any such sale to be physically
present or constructively in the possession of Mortgagee and, subject to
Applicable Law, Mortgagor shall deliver all of the Mortgaged Property to the
purchaser at such sale. If it should be impossible or impracticable to take
actual delivery of the Mortgaged Property, then the title and right of
possession to the Mortgaged Property shall pass to the purchaser at such sale as
completely as if the same had been actually present and delivered.
(v) Mortgagee may, personally or by its agents or attorneys, take such
steps to protect and enforce its rights whether by action, suit or proceeding in
equity or at law for the specific performance of any covenant, condition or
agreement in either of the Financing Agreements, in this Mortgage or in any of
the other Loan Documents or in aid of the execution of any power herein or
therein granted, or sale of the Mortgaged Property as herein permitted or for
any foreclosure hereunder, or for the enforcement of any other appropriate legal
or equitable remedy or otherwise as Mortgagee shall elect.
(vi) In the event Mortgagor shall fail to pay any amounts due and
owing in accordance with the terms of this Mortgage, either of the Financing
Agreements or the other Loan Documents (subject to Mortgagor's right to contest
certain amounts as set forth in the Financing Agreements or the other Loan
Documents), Mortgagee, at its right and option, may institute an action or
proceeding at law or in equity for the collection of any sums due and unpaid and
may prosecute any such action or proceeding to judgment or final decree.
Mortgagee may enforce any such judgment or final decree against Mortgagor as
provided in this Mortgage, and against any guarantor of the Obligations, to the
extent provided in any guarantee. Mortgagee may collect moneys adjudged or
decreed to be payable to Mortgagee and shall be entitled to recover such
judgment either before, after or during the pendency of any proceeding for the
enforcement of the provisions of this Mortgage or any such guarantee. The right
of Mortgagee to recover such judgment shall not be affected by any entry or
sale, by the exercise of any other right, power or remedy provided by and for
the enforcement of the provisions of this Mortgage or of the Loan Documents or
the foreclosure of the Lien hereof or sale of the Mortgaged Property hereunder.
XVI-24
B. Right to Purchase. Mortgagee (or any other person owning,
directly or indirectly, any interest in any of the Obligations) and its agents
and attorneys shall have the right to become the purchaser at any sale made
pursuant to the provisions of this Section 5.3 and shall have the right to
-----------
credit upon the amount of the bid made therefor the amount payable to it out of
the net proceeds of such sale. All other sales shall be, to the extent permitted
by Applicable Law, on a cash basis. Recitals contained in any conveyance to any
purchaser at any sale made hereunder will conclusively establish the truth and
accuracy of the matters therein stated, including without limitation nonpayment
of the Obligations and advertisement and conduct of such sale in the manner
provided herein or provided by law. Mortgagor does hereby ratify and confirm
all legal acts that Mortgagee may do in carrying out the provisions of this
Mortgage.
C. Conveyance of Title Upon Sale. Any sale of the Mortgaged Property
or any part thereof in accordance with the provisions of this Section 5.3 will
-----------
operate to divest all right, title, interest, claim and demand of Mortgagor in
and to the property sold and will be a perpetual bar against Mortgagor.
Nevertheless, if requested by Mortgagee so to do, Mortgagor shall join in the
execution, acknowledgment and delivery of all proper conveyances, assignments
and transfers of the property so sold. Subject to Applicable Law, any purchaser
at a foreclosure sale will receive immediate possession of the property
purchased, and Mortgagor agrees that if Mortgagor retains possession of the
property or any part thereof subsequent to such sale, Mortgagor will be
considered a tenant at sufferance of the purchaser, and will, if Mortgagor
remains in possession after demand to remove, be guilty of forcible detainer and
will be subject to eviction and removal, forcible or otherwise, with or without
process of law, and all damages to Mortgagor by reason thereof are hereby
expressly waived by Mortgagor.
D. Waiver of Rights and Defenses. Mortgagor acknowledges that it is
aware of and has had the advice of counsel of its choice with respect to its
rights under Applicable Law with respect to this Mortgage, the Obligations and
the Mortgaged Property. Nevertheless, Mortgagor hereby (i) waives and
relinquishes (to the maximum extent permitted by Applicable Law) and (ii) agrees
that Mortgagor shall not (subject to any mandatory requirements of Applicable
Law) at any time hereafter have or assert, any right under any Applicable Law
pertaining to: marshalling, whether of assets or Liens, the sale of property in
the inverse order of alienation, the exemption of homesteads, the administration
of estates of decedents, stay, extension, redemption, statutory right of
redemption, the maturing or declaring due of the whole or any part of the
Obligations, notice of intention of such maturing or declaring due, other notice
(whether of defaults, advances, the creation, existence, extension or renewal of
any of the Obligations or otherwise, except for rights to notices expressly
granted in the Financing Agreements, herein or in the other Loan Documents),
subrogation, or abatement, suspension, deferment, diminution or reduction of any
of the Obligations (including, without limitation, set-off), now or hereafter in
force.
E. Right to Subordinate. Mortgagee, at its option, is authorized to
foreclose this Mortgage or sell the Mortgaged Property or any portion thereof,
subject to the rights of any tenants of the Premises, and the failure to make
any such tenants parties to any such foreclosure or sale proceedings and to
foreclose their rights will not be, nor be asserted by Mortgagor to be, a
defense to any proceedings instituted by Mortgagee to collect the Obligations.
XVI-25
F. Right to Preserve Obligations. Mortgagee shall, to the extent
permitted by Applicable Law, have the option to proceed with foreclosure or to
exercise the power of sale in satisfaction of any installment or part of the
Obligations that has not been paid or performed without declaring the whole of
the Obligations as immediately mature, and such foreclosure or sale may be made
subject to the unmatured part of the Obligations, and it is agreed that such
foreclosure, if so made, shall not in any manner affect the unmatured part of
the Obligations, but as to such unmatured part of the Obligations, this
Mortgage, the Security Agreement and the Financing Agreements shall remain in
full force and effect just as though no foreclosure or sale had been made.
Several foreclosures or sales may be made without exhausting the right of
foreclosure or the power of sale for any unmatured part of the Obligations, it
being the purpose to provide for a foreclosure and sale of the security for any
matured portion of the Obligations without exhausting the power of foreclosure
and the power to sell the Mortgaged Property for any other part of the
Obligations.
G. No Waiver. No delay or omission of Mortgagee to exercise any
right or power accruing upon any Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such right or power or any
such Event of Default or an acquiescence thereto. Every power and remedy
provided by this Mortgage may be exercised, from time to time, as often as may
be deemed expedient by Mortgagee. Nothing in this Mortgage shall affect the
obligation of Mortgagor to pay and perform the Obligations in the manner and at
the time and place, respectively, expressed in the Financing Agreements or any
of the other Loan Documents.
H. Right to Discontinue Proceedings. If Mortgagee shall have
proceeded to enforce any right or remedy under this Mortgage by foreclosure,
entry or otherwise and such proceedings shall have been discontinued or
abandoned for any reason, subject to Applicable Law, then and in every such case
Mortgagor and Mortgagee shall be restored to their former positions and rights
hereunder, and all rights, power and remedies of Mortgagee shall continue as if
no such proceedings had occurred or had been taken.
I. Notices to Third Parties. Mortgagee shall have the right, but not
the obligation, to notify franchisors or ground lessors of any Event of Default
or any exercise of remedies by Mortgagee hereunder, and Mortgagee shall have the
right, but not the obligation, to notify other third parties of any Event of
Default or exercise of remedies by Mortgagee hereunder, whether or not Mortgagee
has agreed with any franchisor, ground lessor or other third party to provide
such notice.
5.4 Costs and Expenses.
-------------------
Mortgagor will pay all costs and expenses as required under the
Financing Agreements.
5.5 Additional Rights of Mortgagee.
-------------------------------
Mortgagee shall have the right, at its election, to exercise any and
all other remedies in the Security Agreement, in the Financing Agreements or in
any of the Loan Documents or available at law or in equity.
XVI-26
5.6 Application of Proceeds.
-----------------------
A. The proceeds of any sale of the Mortgaged Property or any part
thereof made pursuant to this Section 5 shall be applied as provided for in the
Financing Agreements.
B. Upon any sale made under the powers of sale herein granted and
conferred, the receipt of Mortgagee will be sufficient discharge to the
purchaser or purchasers at any sale for the purchase money, and such purchaser
or purchasers and the heirs, devisees, personal representatives, successors and
assigns thereof will not, after paying such purchase money and receiving such
receipt of Mortgagee, be obligated to see to the application thereof or be in
any way answerable for any loss, misapplication or non-application thereof.
XVI-27
SECTION 6
[INTENTIONALLY OMITTED]
SECTION 7 TERMINATION
If all of the Obligations shall be indefeasibly paid in full pursuant
to the terms and conditions of this Mortgage, the other Loan Documents, and any
Interest Rate Agreement, and all Commitments of the Lenders under the Term
Credit Agreement and the Amended and Restated Credit Agreement have terminated,
or if this Mortgage shall be released of record in accordance with the
provisions of the Financing Agreements or the other Loan Documents, then
Mortgagee shall, promptly after the request of Mortgagor, execute, acknowledge
and deliver to Mortgagor proper instruments evidencing the termination and
release of this Mortgage. Mortgagor shall pay all reasonable legal fees and
other expenses incurred by Mortgagee for preparing and reviewing such
instruments and the execution and delivery thereof, and Mortgagee may require
payment of the same prior to delivery of such instruments. Upon the receipt by
Mortgagor of terminations or releases signed by Mortgagee, and in recordable
form and evidencing the termination of this Mortgage, Mortgagor shall promptly
and at its own expense record or file such terminations or releases in each of
the cities, towns, counties and parishes, as appropriate, in which portions of
the Mortgaged Property may be located, in such a manner so as to effect a
release of all of the Mortgaged Property of record. Upon the request of
Mortgagee, Mortgagor shall promptly deliver to Mortgagee evidence reasonably
satisfactory to Mortgagee of such recordation or filing. The obligations of
Mortgagor under this Section 7 shall survive the termination of this Mortgage.
SECTION 8
MISCELLANEOUS COVENANTS AND AGREEMENTS
8.1 Cumulative Rights; Waivers; Modifications.
------------------------------------------
Each and every right, power and remedy hereby granted to Mortgagee
shall be cumulative and not exclusive, and each and every right, power and
remedy whether specifically hereby granted or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by Mortgagee, and the exercise of any such right, power or remedy will
not be deemed a waiver of the right to exercise, at the same time or thereafter,
any other right, power or remedy. No delay or omission by Mortgagee in the
exercise of any right, power or remedy will impair any such right, power or
remedy or operate as a waiver thereof or of any other right, power or remedy
then or thereafter existing. All changes to and modifications of this Mortgage
must be in writing and signed by Mortgagor and Mortgagee.
XVI-28
8.2 Partial Releases.
-----------------
No release from the Lien of this Mortgage of any part of the Mortgaged
Property by Mortgagee shall in any way alter, vary or diminish the force or
effect of this Mortgage on the balance of the Mortgaged Property or the priority
of the Lien of this Mortgage on the balance of the Mortgaged Property.
8.3 Severability.
-------------
In case any provision in or obligation under this Mortgage shall be
invalid, illegal or unenforceable in any jurisdiction or under any set of
circumstances, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction or under any other set of circumstances, shall not in any way be
affected or impaired thereby. If any Lien evidenced or created by this Mortgage
is invalid or unenforceable, in whole or in part, as to any part of the
Obligations, or is invalid or unenforceable, in whole or in part, as to any part
of the Mortgaged Property, such portion, if any, of the Obligations as is not
secured by all of the Mortgaged Property hereunder shall be paid prior to the
payment of the portion of the Obligations secured by all of the Mortgaged
Property, and all payments made on the Obligations (including, without
limitation, cash and/or property received in connection with sales of Mortgaged
Property pursuant to Section 5 hereof) shall, unless prohibited by Applicable
Law or unless Mortgagee, in its sole and absolute discretion, otherwise elects,
be deemed to have been first paid on and applied to payment in full of the
unsecured or partially secured portion of the Obligations, and the remainder to
the secured portion of the Obligations.
8.4 Subrogation.
------------
This Mortgage is made with full substitution and subrogation of
Mortgagee in and to all covenants and warranties by others heretofore given or
made in respect of the Mortgaged Property or any part thereof. If any or all of
the proceeds of the indebtedness secured hereby have been used to extinguish,
extend or renew any indebtedness heretofore existing against all or any portion
of the Mortgaged Property or to satisfy any indebtedness or obligation secured
by a Lien of any kind (including Liens securing the payment of any taxes), such
proceeds have been advanced by Mortgagee at Mortgagor's request and, to the
extent of such funds so used, the indebtedness and obligations in this Mortgage
shall be subrogated to and extend to all of the rights, claim, Liens, titles and
interests heretofore existing against the Mortgaged Property (or such portion
thereof) to secure the indebtedness or obligation so extinguished, paid,
extended or renewed, and the former rights, claims, Liens, titles and interests,
if any, shall not be waived but rather shall be continued in full force and
effect and in favor of Mortgagee and shall be merged with the Lien created
herein as cumulative security for the repayment of the indebtedness and
satisfaction of the Obligations, but the terms of the Loan Documents shall
govern and control the relationship between Mortgagor and Mortgagee.
XVI-29
8.5 Mortgagee's Powers.
-------------------
To the extent permitted by the Financing Agreements and without
affecting the liability of any other Person liable for the payment of any
obligations herein mentioned and without affecting the Lien of this Mortgage
upon any portion of the Mortgaged Property not then or theretofore released as
security for the full amount of all unpaid Obligations, from time to time,
regardless of consideration and without notice to or consent by the holder of
any subordinate Lien, right, title or interest in or to the Mortgaged Property,
Mortgagee may, (a) release any persons liable, (b) extend the maturity or alter
any of the terms of any such Obligation, (c) modify the interest rate payable on
the principal balance of the Obligations, (d) grant other indulgences, (e)
release or reconvey, or cause to be released or reconveyed at any time at
Mortgagee's option any parcel, portion or all of the Mortgaged Property, (f)
take or release any other or additional security for any obligations herein
mentioned, or (g) make compositions or other arrangements with debtors in
relation thereto.
8.6 Enforceability of Mortgage.
---------------------------
This Mortgage is deemed to be and may be enforced from time to time as
an assignment, chattel mortgage, contract, deed of trust, deed to secure debt,
financing statement, real estate mortgage, or security agreement, and from time
to time as any one or more thereof, as is appropriate under Applicable Law. A
carbon, photographic or other reproduction of this Mortgage or any financing
statement in connection herewith shall be sufficient as a financing statement
for any and all purposes.
8.7 Variable Interest.
------------------
THIS PARAGRAPH IS TO PROVIDE RECORD NOTICE OF THE RIGHT OF MORTGAGEE
TO INCREASE OR DECREASE THE INTEREST RATE ON ANY OF THE OBLIGATIONS IN
ACCORDANCE WITH THE TERMS OF THE LOAN DOCUMENTS WHERE THE TERMS AND PROVISIONS
OF SUCH LOAN DOCUMENTS PROVIDE FOR A VARIABLE INTEREST RATE.
8.8 Choice of Law.
--------------
Insofar as permitted by otherwise Applicable Law, this Mortgage and
the Obligations shall be and the other Loan Documents provide that they are to
be construed under and governed by the laws of the State of New York without
regard to conflict of law rules and principles; provided, however, that the laws
-------- -------
of the place in which the Mortgaged Property is located shall apply to the
extent, and only to the extent, necessary to permit Mortgagor to create the Lien
of this Mortgage and to permit Mortgagee to perfect the Lien of this Mortgage
and to enforce or realize upon their rights and remedies hereunder with respect
to such Mortgaged Property.
XVI-30
8.9 Counterparts.
-------------
This Mortgage and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed and acknowledged in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature and acknowledgment pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature and
acknowledgment pages are physically attached to the same document. Mortgagee
shall also have the option to exercise all rights and remedies available to
Mortgagee hereunder and under Applicable Law as though each counterpart hereof
were a separate mortgage, deed of trust, deed to secure debt, chattel mortgage
or other security instrument covering only the portions of the Mortgaged
Property located in the city, town, county or parish wherein such counterpart is
recorded.
8.10 Recording References.
---------------------
Unless otherwise specified in Exhibit A hereto, all recording
---------
references in Exhibit A are to the official real property records of the city,
---------
town, county or parish, as appropriate, in which the Land is located.
8.11 Notices.
--------
All notices, requests and demands to be made hereunder shall be made
in accordance with the terms of the Financing Agreements.
8.12 Successors and Assigns.
-----------------------
This Mortgage shall be the joint and several obligation of Mortgagor
and all of its heirs, devisees, successors and assigns, including successors in
interest of Mortgagor in and to any part of the Mortgaged Property, and all
references in this Mortgage to Mortgagor shall be deemed to include all of the
foregoing Persons. This Mortgage shall be assignable by Mortgagee in accordance
with the provisions for assignment of the Loans set forth in Section 10.1 of the
Amended and Restated Credit Agreement and Section 9.1 of the Term Credit
Agreement and shall inure to the benefit of Mortgagee, and all of its heirs,
successors, substitutes and assigns including, without limitation, (a) any other
Eligible Assignee under the terms of the Financing Agreements, and (b) any and
all other banks, lending institutions and parties which may participate in the
indebtedness evidenced by the Notes or any of them (all such banks, lending
institutions and parties who participate in the indebtedness evidenced by the
Notes or any of them being referred to herein as the "Participants"). The
Participants may, by agreement among them, provide for and regulate the exercise
of their rights and remedies hereunder, but Mortgagor and all others shall be
entitled to rely on the releases, waivers, consents, approvals, notifications
and other acts of Mortgagee, without inquiry into any such agreements or the
existence of required consents or approvals of the Participants therefor. As
used herein, the term "Mortgagee" shall mean, at any particular time, any Person
holding any interest of Mortgagee hereunder (as provided in and subject to the
provisions of Article 9 and Section 10.1 of the Amended and Restated Credit
Agreement, Section 9.1 of the Term Credit Agreement
XVI-31
and Section 6(g) of the Intercreditor Agreement) at that time including, without
limitation, any Eligible Assignee designated as Collateral Agent under the
Intercreditor Agreement, provided that such successor satisfies the requirements
of Section 6(g)(i) of the Intercreditor Agreement. Any waiver, consent,
approval, notification or other action required or permitted to be obtained from
or taken by Mortgagee may be obtained from or taken by the agent or agents of
Mortgagee appointed from time to time for that purpose. Mortgagor and all others
shall be entitled to rely on the waivers, consents, approvals, notifications and
other acts of Mortgagee. As of the date of this Mortgage, Mortgagee is the
Person identified as Mortgagee in the introductory paragraph of this Mortgage.
Notwithstanding any other provision contained herein, if any property interest
granted by this Mortgage does not vest on the execution and delivery of this
Mortgage, it shall vest, if at all, no later than 20 years and 364 days after
the death of the last surviving descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the late father
of the former President of the United States) who is alive on the execution and
delivery of this Mortgage.
8.13 Expenses.
---------
The provisions set forth in the Financing Agreements with respect to
liability for expenses are incorporated herein by this reference and shall apply
with the same force and effect as if the terms of such provisions were set forth
herein in full.
8.14 Nonforeign Entity.
------------------
Section 1445 of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code") provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. To inform
Mortgagee that the withholding of tax will not be required in the event of the
disposition of the Premises, or any portion thereof, pursuant to the terms of
this Mortgage, Mortgagor hereby certifies, under penalty of perjury, that
Mortgagor is not a foreign corporation, foreign partnership, foreign trust or
foreign estate, as those terms are defined in the Internal Revenue Code and the
regulations promulgated thereunder. It is understood that Mortgagee may
disclose the contents of this certification to the Internal Revenue Service and
that any false statement contained herein could be punished by fine,
imprisonment or both. Mortgagor covenants and agrees to execute such further
certificates, which shall be signed under penalty of perjury, as Mortgagee shall
reasonably require. The covenant set forth herein shall survive the foreclosure
of the Lien of this Mortgage or acceptance of a deed in lieu thereof.
8.15 Purpose of the Loans.
---------------------
Mortgagor hereby represents and agrees that the Loans evidenced or
guaranteed by the Loan Documents and secured by this Mortgage are being obtained
for business or commercial purposes, and the proceeds thereof will not be used
for personal, family, residential, household or agricultural purposes.
XVI-32
8.16 No Joint Venture or Partnership.
--------------------------------
The relationship created hereunder or under the other Loan Documents
is that of creditor/ debtor. The Lenders individually and collectively, do not
owe any fiduciary or special obligation to Mortgagor and/or any of Mortgagor's
partners, agents, or representatives. Nothing herein or in any other Loan
Document is intended to create a joint venture, partnership, tenancy-in-common,
or joint tenancy relationship between Mortgagor, any other Loan Party or
Subsidiary thereof and Agent and the Lenders nor to grant the Agent or the
Lenders any interest in the Mortgaged Property other than that of mortgagee or
lender.
8.17 Amendments and Waivers.
-----------------------
No amendment, modification, termination or waiver of any provision of
this Mortgage or consent to any departure by any Loan Party therefrom, shall in
any event be effective without the written concurrence of Mortgagee. Any waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Mortgagor in any case
shall entitle Mortgagor to any other or further notice or demand in similar or
other circumstances.
8.18 Covenants and Agreements Run with Land.
---------------------------------------
All of Mortgagor's covenants and agreements hereunder shall run with
the land.
8.19 Non-Waiver.
----------
Mortgagor shall not be relieved of Mortgagor's obligation to pay and
perform the Obligations at the time and in the manner provided in the Financing
Agreements and the other Loan Documents by reason of, and the rights of
Mortgagee hereunder shall not be affected by, (i) any failure of Mortgagee to
comply with any request of Mortgagor or any guarantor to take any action to
foreclose this Mortgage or otherwise enforce any of the provisions of the
Security Agreement, the Financing Agreements or any other Loan Document, (ii)
any release, regardless of consideration, of the whole or any part of the
Mortgaged Property or any other security for the Obligations, (iii) any
alteration, extension, renewal, change, modification, release, amendment,
compromise or cancellation, in whole or in part, of any term, covenant or
provision of any of the Loan Documents, including any increase or decrease in
the principal amount of the Obligations or any increase or decrease in the rate
of interest applicable thereto or any extension of time for payment thereof, or
(iv) any agreement or stipulation between Mortgagee and any subsequent owner or
owners of the Mortgaged Property or other Person extending the time of payment
or otherwise modifying or supplementing the terms of this Mortgage, the Security
Agreement, the Financing Agreements or any other Loan Document, without first
having obtained the consent of Mortgagor, and in the latter event, Mortgagor
shall continue to be obligated to pay and perform the Obligations at the time
and in the manner provided in the Financing Agreements and the other Loan
Documents, as so extended, modified and supplemented, unless expressly released
and discharged from such obligation by Mortgagee in writing. The foregoing
shall not apply to the extent the Financing Agreements or the Security Agreement
provides otherwise.
XVI-33
8.20 Survival of Obligations.
------------------------
This Mortgage shall continue to secure the entire Obligations until
the entire Obligations are paid in full or until this Mortgage has been released
of record by Mortgagee pursuant to the terms of the Financing Agreements or any
of the other Loan Documents.
8.21 Consent to Jurisdiction and Service of Process.
-----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST MORTGAGOR ARISING OUT OF OR
RELATING TO THE FINANCING AGREEMENTS, THIS MORTGAGE OR ANY OTHER LOAN DOCUMENT,
OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS MORTGAGE, MORTGAGOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY:
(i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO MORTGAGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH THE
FINANCING AGREEMENTS;
(iv) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (iii) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER MORTGAGOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(v) AGREES THAT MORTGAGEE RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST MORTGAGOR IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(vi) AGREES THAT THE PROVISIONS OF THIS SECTION 8.21 RELATING TO
------------
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
XVI-34
8.22 Waiver of Jury Trial.
---------------------
EACH OF THE PARTIES TO THIS MORTGAGE HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THE FINANCING AGREEMENTS, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED
HEREBY AND THEREBY. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Mortgage and the other Loan Documents, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.22 AND EXECUTED BY EACH OF THE
------------
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS MORTGAGE OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
UNDER THE FINANCING AGREEMENTS. In the event of litigation, this Mortgage may
be filed as a written consent to a trial by the court.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
XVI-35
IN WITNESS WHEREOF, Mortgagor has on the date set forth in the
acknowledgment hereto, effective as of the date first above written, caused this
instrument to be duly EXECUTED AND DELIVERED.
Mortgagor:
[_______________________]
By: ________________________
Name:
Title:
XVI-36
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
ON THE ____ DAY OF ___________ IN THE YEAR_______ BEFORE ME, THE UNDERSIGNED, A
NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED __________________,
PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO
BE THE INDIVIDUALS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND
ACKNOWLEDGED TO ME THAT THEY EXECUTED THE SAME IN THEIR CAPACITIES, AND THAT BY
THEIR SIGNATURES ON THE INSTRUMENT, THE INDIVIDUALS EXECUTED THE INSTRUMENT.
__________________________________________________
(SIGNATURE AND OFFICE OF INDIVIDUAL TAKING
ACKNOWLEDGMENT)
STATE OF NEW YORK )
) SS:.
COUNTY OF NEW YORK )
ON THE ____ DAY OF __________ IN THE YEAR________ BEFORE ME, THE UNDERSIGNED, A
NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED ______________,
PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO
BE THE INDIVIDUAL WHOSE NAME IS SUBSCRIBED TO THE WITHIN INSTRUMENT AND
ACKNOWLEDGED TO ME THAT HE EXECUTED THE SAME IN HIS CAPACITY, AND THAT BY HIS
SIGNATURE ON THE INSTRUMENT, THE INDIVIDUAL EXECUTED THE INSTRUMENT.
__________________________________________________
(SIGNATURE AND OFFICE OF INDIVIDUAL TAKING
XVI-37
EXHIBIT A
---------
LEGAL DESCRIPTION OF LAND
The Name of the Record Owner of the Land is ________________. The Land is
located at ___________________ in the City of _______________, County of
________________, State of ________________.
[See Attached Page(s) for Legal Description]
XVI-38
EXHIBIT B
---------
DESCRIPTION OF ADDITIONAL MORTGAGED PROPERTY
All of Mortgagor's right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Mortgagor now has or
hereafter acquires an interest, now or hereafter located upon or attached to or
to be incorporated in (regardless of where located) the Premises or appurtenant
thereto, or used or to be used in connection with the present or future use,
construction upon, leasing, sale, operation or occupancy of the Premises:
(a) all right, title and interest of Mortgagor in and to all buildings,
structures, fixtures, tenant improvements and other improvements of every
kind and description now or hereafter located in or on the Premises,
including all Materials, water, sanitary and storm sewers, drainage,
electricity, steam, gas, telephone and other utility facilities, parking
areas, roads, driveways, walks and other site improvements; and all additions
and betterments thereto and all renewals, substitutions and replacements
thereof, owned or to be owned by Mortgagor or in which Mortgagor has or shall
acquire an interest, to the extent of Mortgagor's interest therein (all of
the foregoing being referred to herein, collectively, as the "Improvements");
(b) all supplies and materials in which Mortgagor has an interest arising
in conjunction with Mortgagor's ownership or operation of the Premises,
including any supplies or materials intended for incorporation or
installation in the Improvements, prior to the time the same are so
incorporated or installed, including building materials and components (all
of the foregoing being referred to herein, collectively, as the "Materials");
(c) All equipment in all of its forms, all parts thereof and all
accessions thereto located upon the Premises, or any part thereof, or used in
connection with the use, maintenance, operation or occupancy of the
Improvements (all of the foregoing being referred to herein, collectively, as
the "Equipment");
(d) all right, title and interest now owned or hereafter acquired by
Mortgagor in and to all options and rights of first refusal to purchase or
lease any greater estate in the Premises including, but not limited to all
rights of first refusal to purchase the fee estate in the Land (all of the
foregoing being referred to herein as the "Options");
(e) all rights, titles, interests, estates or other claims, both in law
and in equity, which Mortgagor now has or may hereafter acquire in the
Premises or in and to any greater estate in the Premises or in and to any
greater estate in any Mortgaged Property (the "Greater Estate Rights");
XVI-39
(f) all prepaid rent and security deposits and all other security which
the lessor under any ground lease affecting the Premises may hold now or
later for the performance of Mortgagor's obligations as the lessee under any
such ground lease ("Security Deposits");
(g) subject to the terms of the Financing Agreements, all insurance
policies and the proceeds thereof, now or hereafter in effect with respect to
the Premises or any other Mortgaged Property, including, without limitation,
any and all title insurance proceeds, and all unearned premiums and premium
refunds, accrued, accruing or to accrue under insurance policies, and all
awards made for any taking of or damage to all or any part of the Premises or
any other Mortgaged Property by eminent domain, or by any purchase in lieu
thereof, and all awards resulting from a change of grade of streets or for
severance damages, and all other proceeds of the conversion, voluntary or
involuntary, of any Mortgaged Property into cash or other liquidated claims,
and all judgments, damages, awards, settlements and compensation (including
interest thereon) heretofore or hereafter made to the present and all
subsequent owners of any Mortgaged Property or any part thereof for any
injury to or decrease in the value thereof for any reason (collectively, the
"Insurance/Condemnation Proceeds");
(h) all right, title and interest of Mortgagor as landlord in and to all
leaseholds and all leases, subleases, licenses, franchises, concessions or
grants of other possessory interests, tenancies, and any other agreements
affecting the use, possession or occupancy of the Premises or any part
thereof, whether now or hereafter existing or entered into (including,
without limitation, any use or occupancy arrangements created pursuant to
Section 365(d) of the Bankruptcy Code or otherwise in connection with the
commencement or continuance of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar proceedings, or any
assignment for the benefit of creditors, in respect of any tenant or occupant
of any portion of the Premises) and all amendments, modifications,
supplements, extensions or renewals thereof, and all guaranties thereof or of
leasing commissions, whether now or hereafter existing and all amendments,
modifications, supplements, extensions or renewals thereof, (all of the
foregoing being collectively referred to as the "Leases"), and all rents,
issues, profits, royalties (including all oil and gas or other hydrocarbon
substances and minerals), earnings, receipts, revenues, accounts, accounts
receivable, security deposits and other deposits (subject to the prior right
of the tenants making such deposits) and income, including, without
limitation, fixed, additional and percentage rents, vending receipts, service
charges, telephone charges, and all other fees, charges, accounts and other
payments for the use or occupancy of facilities and/or the services rendered
and goods provided in connection therewith, and all operating expense
reimbursements, reimbursements for increases in taxes, sums paid by tenants
to Mortgagor to reimburse Mortgagor for amounts originally paid or to be paid
by Mortgagor or Mortgagor's agents or affiliates for which such tenants were
liable, as, for example, tenant improvements costs in excess of any work
letter, lease takeover costs, moving expenses and tax and operating expense
pass-throughs for which a tenant is solely liable, parking, maintenance,
common area, tax, insurance, utility and service charges and contributions,
proceeds of sale of electricity, gas, heating, air-conditioning and other
utilities and services, deficiency rents and liquidated damages, and other
benefits now or hereafter derived from any portion of the Premises or
otherwise due and payable or to become due and payable as a result of any
ownership, use, possession, occupancy or operation
XVI-40
thereof (including any payments received pursuant to Section 502(b) of the
Bankruptcy Code or otherwise in connection with the commencement or
continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings, or any assignment for the
benefit of creditors, in respect of any tenant or other occupants of any
portion of the Premises and all claims as a creditor in connection with any
of the foregoing) and all cash or security deposits, advance rentals, and all
deposits or payments of a similar nature relating thereto, now or hereafter,
including during any period of redemption, derived from the Premises and all
proceeds from the cancellation, surrender, sale or other disposition of the
Leases (all of the foregoing being referred to collectively, as the "Rents ")
and the right to receive and apply the Rents to the payment of the
Obligations, subject to the right hereinafter given to Mortgagor to collect
the Rents;
(i) all refunds or rebates of real and personal property taxes or charges
in lieu of taxes, heretofore or now or hereafter assessed or levied against
the Premises, including interest thereon, and the right to receive the same,
whether such refunds or rebates relate to fiscal periods before or during the
term hereof (collectively, the "Refunds");
(j) all abstracts of title, plans, specifications, operating manuals,
computer programs, computer data, maps, surveys, studies, reports,
appraisals, architectural, engineering and construction drawings and
contracts, or whatever kind or character, whether now or hereafter existing,
relating to the Premises (all of the foregoing being referred to herein as
the "Specifications");
(k) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to the Premises (collectively, the
"Records");
(l) at such times and to the extent the granting of a security interest
therein is permitted by Applicable Law, all approvals, authorizations,
building permits, certifications, entitlements, exemptions, franchises,
licenses, orders, variances, plat plan approvals, environmental approvals
(including, without limitation, an environmental impact statement or report
if required under Applicable Law), air pollution authorities to construct and
permits to operate, sewer and waste discharge permits, national pollutant
discharge elimination system permits, water permits, zoning and land use
entitlements and all other permits, whether now existing or hereafter issued
to or obtained by or on behalf of Mortgagor, that relate to or concern in any
way the Premises and are given or issued by any governmental or quasi-
governmental authority, whether now existing or hereafter created (as the
same may be amended, modified, renewed or extended from time to time, and
including all substitutions and replacements therefor) (collectively, the
"Permits");
(m) subject to the terms of the Financing Agreements, all proceeds,
products, rents and profits of or from any and all of the foregoing Mortgaged
Property and, to the extent not otherwise included, all payments under
insurance (whether or not Mortgagee is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Mortgaged Property. For
purposes hereof, the term "proceeds" includes
XVI-41
whatever is receivable or received when Mortgaged Property or proceeds are
sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary;
provided, however, that in no event shall the Mortgaged Property include, and
-----------------
no Mortgagor shall be deemed to have granted a security interest in, any of
Mortgagor's rights or interests in any agreement to which Mortgagor is a party
or any of its rights or interests thereunder to the extent but only to the
extent that such a grant would result in a breach of the terms of, or
constitute a default under, any such agreement, and the other party to such
agreement has not consented to the granting of such security interest in such
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-318(4) of the Uniform Commercial Code of any
relevant jurisdiction or any other Applicable Law (including the Bankruptcy
Code) or principles of equity); and provided further, that immediately upon
----------------
the ineffectiveness, lapse or termination of any such provision, the Mortgaged
Property shall include and Mortgagor shall be deemed to have granted a
security interest in, all such rights or interests in the applicable Mortgaged
Property as if such provision had never been in effect.
The term "Premises" means the Premises described in the Mortgage to which this
Exhibit B is attached.
---------
XVI-42
EXHIBIT C
UCC INFORMATION
Debtor:
------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.
Corporate Structure: Pennsylvania limited partnership
Notice Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Secured Party:
-------------
FLEET NATIONAL BANK
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Secured Party acts as Collateral Agent for the Lenders party from time to time
to the Financing Agreements. Information regarding the security interest held
by the Lenders, for which Secured Party acts as Collateral Agent, may be
obtained by contacting Secured Party at the address set forth above.
XVI-43
EXHIBIT XVII
[FORM OF COLLATERAL ACCESS AGREEMENT]
REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT
This REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT (this
"Agreement ") is dated as of _________ __, 1999 and entered into by
_______________________________________________________________________________,
a ____________________ ("Real Property Holder"), to and for the benefit of FLEET
NATIONAL BANK ("Fleet"), as collateral agent ("Agent") for the financial
institutions ("Lenders") which are or may hereafter become parties to the
Financing Agreements (as hereinafter defined).
R E C I T A L S
---------------
8.23 __________________________________("Guarantor"), has possession of
and occupies all or a portion of the property described on Exhibit A annexed
---------
hereto (the "Premises").
8.24 Guarantor's interest in the Premises arises under the lease
agreement (the "Lease") more particularly described on Exhibit B annexed hereto,
---------
pursuant to which Real Property Holder has rights, upon the terms and conditions
set forth therein, to take possession of, and otherwise assert control over, the
Premises.
8.25 Fleet, as administrative agent, those Lenders which are or may
hereafter become parties to the Amended and Restated Credit Agreement, and
▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as lead arranging agent and syndication
agent, and DLJ Capital Funding, Inc., as documentation agent, will be entering
into that certain Amended and Restated Credit Agreement (the "Amended and
Restated Credit Agreement") with ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., a Pennsylvania
limited partnership ("Company"), as borrower, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental
Holdings, L.P. ("Holdings"), a Pennsylvania limited partnership, as guarantor,
and Company has executed a security agreement, mortgages, deeds of trust, deeds
to secure debt and assignments of rents and leases, and other collateral
documents in relation to the Amended and Restated Credit Agreement.
Furthermore, Fleet, as administrative agent, those Lenders which are or may
hereafter become parties to the Term Credit Agreement (as hereinafter defined)
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as arranging agent and syndication
agent, and DLJ Capital Funding, Inc., as documentation agent, entered into that
certain Term Credit Agreement dated July 22, 1998 with Company, as borrower, and
Holdings, as guarantor, and Company has executed a security agreement,
mortgages, deeds of trust, deeds to secure debt and assignments of rents and
leases, and other collateral documents in relation to the Term Credit Agreement.
The Amended and Restated Credit Agreement and the Term Credit Agreement, as
either is amended, supplemented or otherwise modified from time to time, are
collectively referred to as the "Financing Agreements". Fleet has been
appointed as the collateral agent for the Lenders under
XVII-1
the Financing Agreements. Guarantor has unconditionally guaranteed the prompt
payment and performance of all of the Company's obligations under the Financing
Agreements.
8.26 Guarantor's guaranty of Company's repayment of the extensions of
credit made by Lenders under the Financing Agreements will be secured, in part,
by all inventory of Guarantor (including all inventory of Company now or
hereafter located on the Premises (the "Inventory")) and all equipment,
machinery and other goods used in Guarantor's business (including all equipment
of Guarantor now or hereafter located on the Premises (the "Equipment" and,
together with the Inventory, the "Collateral")).
8.27 Agent has requested that Real Property Holder execute this Agreement
as a condition to the extension of credit to Company under the Financing
Agreements.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Real Property Holder hereby represents and warrants to, and
covenants and agrees with, Agent as follows:
1. Real Property Holder hereby (a) waives and releases unto Agent and
its successors and assigns any and all rights granted by or under any present or
future laws to levy or distraint for rent or any other charges which may be due
to Real Property Holder against the Collateral, and any and all other claims,
liens and demands of every kind which it now has or may hereafter have against
the Collateral, and (b) agrees that any rights it may have in or to the
Collateral, no matter how arising (to the extent not effectively waived pursuant
to clause (a) of this paragraph 1), shall be second and subordinate to the
rights of Agent in respect thereof. Real Property Holder acknowledges that the
Collateral is and will remain personal property and not fixtures even though it
may be affixed to or placed on the Premises.
2. Real Property Holder certifies that (a) Real Property Holder is the
landlord under the Lease, (b) the Lease is in full force and effect and has not
been amended, modified, or supplemented except as set forth on Exhibit B annexed
hereto, (c) to the knowledge of Real Property Holder, there is no defense,
offset, claim or counterclaim by or in favor of Real Property Holder against
Guarantor under the Lease or against the obligations of Real Property Holder
under the Lease, (d) no notice of default has been given under or in connection
with the Lease which has not been cured, and Real Property Holder has no
knowledge of the occurrence of any other default under or in connection with the
Lease, and (e) except as disclosed to Agent, no portion of the Premises is
encumbered in any way by any deed of trust or mortgage lien or ground or
superior lease.
3. Real Property Holder consents to the installation or placement of the
Collateral on the Premises, and Real Property Holder grants to Agent a license
to enter upon and into the Premises to do any or all of the following with
respect to the Collateral: assemble, have appraised, display, remove, maintain,
prepare for sale or lease, repair, transfer, or sell (at public or private
sale). In entering upon or into the Premises, Agent hereby agrees to indemnify,
defend and hold Real Property Holder harmless from and against any and all
claims, judgments, liabilities, costs and expenses incurred by Real Property
Holder caused solely by Agent's entering upon or into the Premises and taking
any of the foregoing actions with respect to the Collateral. Such costs shall
include any damage to the Premises made by Agent in severing and/or removing the
Collateral therefrom.
XVII-2
4. Real Property Holder agrees that it will not prevent Agent or its
designee from entering upon the Premises at all reasonable times to inspect or
remove the Collateral. In the event that Real Property Holder has the right to,
and desires to, obtain possession of al or any portion of the Premises (either
through expiration of the Lease or termination thereof due to the default of
Guarantor thereunder), Real Property Holder will deliver notice (the "Real
Property Holder's Notice") to Agent to that effect. Within the 45 day period
after Agent receives the Real Property Holder's Notice, Agent shall have the
right, but not the obligation, to cause the Collateral to be removed from the
Premises. During such 45 day period, Real Property Holder will not remove the
Collateral from the Premises nor interfere with Agent's actions in removing the
Collateral from the Premises or Agent's actions in otherwise enforcing its
security interest in the Collateral. Notwithstanding anything to the contrary
in this paragraph, Agent shall at no time have any obligation to remove the
Collateral from the Premises.
5. Real Property Holder shall send to Agent a copy of any notice of
default under the Lease sent by Real Property Holder to Guarantor. In addition,
Real Property Holder shall send to Agent a copy of any notice received by Real
Property Holder of a breach or default under any other lease, mortgage, deed of
trust, security agreement or other instrument to which Real Property Holder is a
party which may affect Guarantor's rights in, or possession of, the Premises.
6. All notices to Agent under this Agreement shall be in writing and
sent to Agent at its address set forth on the signature page hereof by
telefacsimile, by United States mail, or by overnight delivery service.
7. The provisions of this Agreement shall continue in effect until Real
Property Holder shall have received Agent's written certification that all
amounts advanced under the Financing Agreements have been paid in full.
8. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York, without regard to
conflicts of laws principles.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed and delivered as of the day and year first set forth above.
[NAME OF REAL PROPERTY HOLDER]
By: ________________________________
Name:
Title:
Real Property Holder's Address For Notices:
___________________________________
___________________________________
XVII-3
___________________________________
___________________________________
Fax: (___) ________
By its acceptance hereof, as of the day and year first set forth above,
Agent agrees to be bound by the provisions hereof.
FLEET NATIONAL BANK
as Agent
By: ________________________________
Name:
Title:
Agent's Address For Notices:
Fleet National Bank
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
XVII-4
NOTARY BLOCK
XVII-1
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇
[Legal Description]
Address: 10787 "B" ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Legal Description]
Address: ▇▇▇▇ ▇. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
[Legal Description]
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Legal Description]
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Legal Description]
Address: Between 3rd and ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
[Legal Description]
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇
XVII-1
[Legal Description]
XVII-2
EXHIBIT B
DESCRIPTION OF LEASE
Landlord: Real Property Holder
Tenant: ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
Date: ____________________, 19__
Premises: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ "B" Mulberry Avenue
Fontana, CA
▇▇▇▇ ▇. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇
Between 3rd and 4th Streets on Armco Road
Ashland, KY
Ohio Route 7N
Reno, OH
XVII-3
EXHIBIT XVIII
[FORM OF SUBORDINATION PROVISIONS]
"Indebtedness" means (i) all obligations for borrowed money or for the
deferred purchase price of property or services (including, without limitation,
all obligations contingent or otherwise in connection with acceptance, letter of
credit or similar facilities, but excluding any such obligations incurred under
ERISA and any accrued expenses or trade payables, (ii) all obligations evidenced
by bonds, notes, debentures or other similar instruments, (iii) all indebtedness
created or arising under any sale and leaseback arrangement, conditional sale or
other title retention agreement with respect to property owned or acquired
(whether or not the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (iv) all rental obligations under capital leases to the extent not
included in clause (iii) above to the extent properly classified as a liability
on a balance sheet in conformity with GAAP, (v) all guarantees (direct or
indirect) to the extent properly classified as a liability on a balance sheet in
conformity with GAAP, all contingent reimbursement obligations under undrawn
letters of credit and all other contingent obligations in respect of, or
obligations to purchase or otherwise acquire or to assure payment of,
Indebtedness of others and (vi) indebtedness of others secured by any lien upon
property, whether or not assumed, but only to the extent of the lesser of such
property's fair market value and the stated amount of such obligation.
"Person" means an individual, a partnership, a corporation, an association, a
limited liability company, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof
"Senior Agent" shall mean Fleet National Bank, as Administrative Agent and
Collateral Agent for the Lenders under the Senior Credit Agreements, and its
successors in such capacity, or if there is then no acting Administrative Agent
and Collateral Agent under the Senior Credit Agreements, financial institutions
holding a majority in principal amount of the Senior Debt outstanding
thereunder.
"Senior Credit Agreements" shall mean, collectively, (i) the Revolving Credit
Agreement dated as of July 22, 1998, and (ii) the Term Loan Credit Agreement
dated as of July 22, 1998, in each case by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Holdings, L.P., the financial institutions listed therein
as Lenders, Senior Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as Syndication
Agent, and DLJ Capital Funding, Inc., as Documentation Agent, as each such
agreement has heretofore been and may hereafter be amended, restated, modified
or supplemented from time to time, together with any credit agreement or similar
document from time to time executed by the Borrower to evidence any Refinancing
(as defined in the definition of Senior Indebtedness) or successive
Refinancings.
"Senior Debt Documents" shall mean the Senior Credit Agreements and all other
documents and instruments delivered or filed in connection with the creation or
incurrence of any Senior Indebtedness (including, without limitation, the
promissory notes, guaranties, security agreements, pledge agreements and
mortgages executed and delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P., ▇▇▇▇▇▇▇ ▇▇▇▇▇
Rental Holdings, L.P., and the subsidiaries of the Borrower in respect of the
Obligations under the Senior Credit Agreements).
XVIII-1
"Senior Indebtedness" shall mean (i) all Obligations (as defined in the
Senior Credit Agreements) now or hereafter incurred pursuant to and in
accordance with the terms of the Senior Debt Documents, (ii) any additional
Indebtedness incurred under or pursuant to the Senior Credit Agreements and the
other Senior Debt Documents whether such Obligations or additional Indebtedness
involve principal prepayment charges, interest (including, without limitation,
interest accruing after the filing of a petition initiating any proceeding under
the Bankruptcy Code, whether or not allowed as a claim in such proceeding),
indemnities (other than inchoate indemnification obligations with respect to
claims, losses or liabilities which have not yet arisen after all other
Obligations have been repaid in full and all commitments to lend thereunder have
terminated) or reimbursement of fees, expenses or other amounts, and (iii) any
indebtedness incurred (other than those not due and payable when all other
Obligations have been repaid and Commitments are terminated) for the purpose of
refinancing, restructuring, extending or renewing (collectively, "Refinancing")
the obligations of the Borrower under the Senior Credit Agreements as set forth
in clauses (i) and (ii) above.
"Senior Lenders" shall mean the financial institutions party to either of the
Senior Credit Agreements as "Lenders" from time to time.
1. Subordination.
(a) Agreement to Subordinate. The Borrower and, by its acceptance hereof,
------------------------
each Holder agree that the indebtedness of the Borrower evidenced by this Note,
whether for principal, interest on any other amount payable under or in respect
hereof and all rights or claims arising out of or associated with such
Indebtedness (the "Subordinated Obligations"), shall be junior and subordinate
in right of payment to the prior payment in full in cash of all Senior
Indebtedness, in accordance with the provisions of this Section X. Each holder
of Senior Indebtedness shall be deemed to have acquired Senior Indebtedness in
reliance upon the agreements of the Borrower and the holder of this Note
contained in this Section X. The provisions of this Section X shall be
reinstated if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior Indebtedness or
any representative of such holder upon the insolvency, bankruptcy or
reorganization of the Borrower. Any provision of this Note to the contrary
notwithstanding, the Borrower shall not make, and no Holder shall accept, any
payment or prepayment of principal, or prepayment of other amounts due
thereunder, of any kind whatsoever (including without limitation by distribution
of assets, set off, exchange or any other manner) with respect to the
Subordinated Obligations at any time when any of the Senior Indebtedness remains
outstanding. Holder may receive interest payments in respect of the Subordinated
Obligations in accordance with the terms of this Note except to the extent and
at the times prohibited or restricted by the provisions of this Section X. In
no event shall the Holder commence any action or proceeding to contest the
provisions of this Section X or the priority of the Liens (as defined in the
Senior Credit Agreements) granted to the holders of the Senior Indebtedness by
the Borrower. No Holder shall take, accept or receive any collateral security
from the Borrower for the payment of the Subordinated Obligations.
(b) Liquidation, Dissolution, Bankruptcy. In the event of any insolvency,
------------------------------------
bankruptcy, dissolution, winding up, liquidation, arrangement, reorganization,
marshalling of assets or liabilities, composition, assignment for the benefit of
creditors or other similar proceedings relating to the Borrower, its debts, its
XVIII-2
property or its operations, whether voluntary or involuntary, including, without
limitation the filing of any petition or the taking of any action to commence
any of the foregoing (which, in the case of action by a third party, is not
dismissed within 60 days) (a "Bankruptcy Event"), all Senior Indebtedness shall
first be paid in full in cash or other immediately available funds before Holder
shall be entitled to receive or retain any payment or distribution of assets of
the Borrower with respect to any Subordinated Obligations. In the event of any
such Bankruptcy Event, any payment or distribution of assets to which Holder
would be entitled if the Subordinated Obligations were not subordinated to the
Senior Indebtedness in accordance with this Section X, whether in cash,
property, securities or otherwise, shall be paid or delivered by the debtor,
custodian, trustee or agent or other Person making such payment or distribution,
or by the Holder if received by it, directly to the Senior Agent on behalf of
the holders of the Senior Indebtedness for application to the payment of the
Senior Indebtedness remaining unpaid, to the extent necessary to make payment in
full in cash or other immediately available funds of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
to or for the holders of the Senior Indebtedness.
(c) No Payments with Respect to Subordinated Obligations in Certain
---------------------------------------------------------------
Circumstances.
--------------
(i) In circumstances in which Section X(b) is not applicable, no payment
of any nature (including, without limitation, any distribution of assets) in
respect of the Subordinated Obligations (including, without limitation,
pursuant to any judgment with respect thereto or on account of the purchase
or redemption or other acquisition of Subordinated Obligations, by set off,
prepayment exchange or other manner) shall be made by or on behalf of the
Borrower if, at the time of such payment:
(A) a default in the payment when due (whether at the maturity
thereof, or upon acceleration of maturity or otherwise and without giving
effect to any applicable grace periods) of all or any portion of the
Senior Indebtedness (whether of principal, interest or any other amount
with respect thereto) shall have occurred, and such default shall not
have been cured or waived in accordance with the terms of the Senior Debt
Documents; or
(B) subject to the last sentence of this Section X(c), (x) the
Borrower shall have received notice from the Senior Agent or the Lenders
of the occurrence of one or more Events of Default (as defined in either
of the Senior Credit Agreement) in respect of any Senior Indebtedness
(other than payment defaults described in Section X(c)(i)(A) above), (y)
each such Event of Default shall not have been cured or waived in
accordance with the terms of the Senior Debt Documents, and (z) 180 days
shall not have elapsed since the date such notice was received.
The Borrower may resume payments (and may make any payments missed due to
the application of Section X(c)(i) in respect of the Subordinated Obligations
or any judgment with respect thereto:
(A) in the case of a default referred to in clause (A) of this
Section X(c)(i), upon a cure or waiver thereof in accordance with the
terms of the Senior Debt Documents; or
XVIII-3
(B) in the case of an Event of Default or Events of Default referred
to in clause (B) of this Section X(c)(i), upon the earlier to occur of
(1) the cure or waiver of all such Events of Default in accordance with
the terms of the Senior Debt Documents, or (2) the expiration of such
period of 180 days.
(ii) Following any acceleration of the maturity of any Senior
Indebtedness and as long as such acceleration shall continue unrescinded and
unannulled, such Senior Indebtedness shall first be paid in full in cash, or
provision for such payment shall be made in a manner reasonably satisfactory
to the holders of the Senior Indebtedness, before any payment is made on
account of or applied on the Subordinated Obligations.
(iii) The Borrower shall give prompt written notice to the Holder of (i)
any default in respect of Senior Obligations referred to in Section
X(c)(i)(A) and (ii) any notice of the type described in Section X(c)(i)(B)
from the Senior Agent.
(d) When Distribution Must Be Paid Over. In the event that Holder shall
------------------------------------
receive any payment or distribution of assets that Holder is not entitled to
receive or retain under the provisions of this Note, Holder shall hold any
amount so received in trust for the holders of Senior Indebtedness, shall
segregate such assets from other assets held by Holder and shall forthwith turn
over such payment or distribution (without liability for interest thereon) to
the Senior Agent on behalf of the holders of Senior Indebtedness in the form
received (with any necessary endorsement) to be applied to Senior Indebtedness.
(e) Exercise of Remedies. So long as any Senior Indebtedness is outstanding
---------------------
(including any loans, any letters of credit, any commitments to lend or any
lender guarantees), Holder (solely in its capacity as a holder of this Note)
shall not exercise any rights or remedies with respect to an Event of Default
under this Note, including, without limitation, any action (l) to demand or ▇▇▇
for collection of amounts payable hereunder, (2) to accelerate the principal of
this Note, or (3) to commence or join with any other creditor (other than the
holder of a majority in principal amount of the Senior Indebtedness) in
commencing any proceeding in connection with or premised on the occurrence of a
Bankruptcy Event prior to the earlier of:
(A) the payment in full in cash or other immediately available funds of
all Senior Indebtedness;
(B) the initiation of a proceeding (other than a proceeding prohibited by
clause (3) of this Section X(e)) in connection with or premised upon the
occurrence of a Bankruptcy Event;
(C) the expiration of 180 days immediately following the receipt by the
Senior Agent of notice of the occurrence of such Event of Default from the
Holder; and
(D) the acceleration of the maturity of the Senior Indebtedness;
provided, however, that if, with respect to (B) and (D) above, such proceeding
-------- -------
or acceleration, respectively, is rescinded, or with respect to (C) above,
during such 180-day period such Event of Default
XVIII-4
has been cured or waived, the prohibition against taking the actions described
in this Section X(e) shall automatically be reinstated as of the date of the
rescission, cure or waiver, as applicable. In all events, unless an event
described in clause (A), (B) or (D) above has occurred and not been rescinded,
the Holder shall give thirty (30) days prior written notice to the Senior Agent
before taking any action described in this Section X(e), which notice shall
describe with specificity the action that the Holder in good faith intends to
take.
(f) Acceleration of Payment of Note. If this Note is declared due and
--------------------------------
payable prior to the Maturity Date, no direct or indirect payment that is due
solely by reason of such declaration shall be made, nor shall application be
made of any distribution of assets of the Borrower (whether by set off or in any
other manner, including, without limitation, from or by way of collateral) to
the payment, purchase or other acquisition or retirement of this Note, unless,
in either case, (i) all amounts due or to become due on or in respect of the
Senior Indebtedness (including with respect to any outstanding letters of
credit) shall have been previously paid in full in cash or other immediately
available funds or in any other manner satisfactory to all holders of such
Senior Indebtedness, (ii) all commitments to lend under Senior Indebtedness
shall have been terminated and (iii) all guarantees constituting Senior
Indebtedness shall have been terminated.
(g) Proceedings Against Borrower. So long as any Senior Indebtedness is
----------------------------
outstanding (including any loans, any commitments to lend or open lender
guarantees or any lender guarantees, Holder (solely in its capacity as a holder
of this Note) shall not commence any bankruptcy, insolvency, reorganization or
other similar proceeding against Borrower.
(h) Amending Senior Indebtedness. Any holder of Senior Indebtedness may, at
-----------------------------
any time and from time to time, without the consent of or notice to Holder (i)
modify or amend the terms of the Senior Indebtedness, (ii) sell, exchange,
release, fail to perfect a lien on or a security interest in or otherwise in any
manner deal with or apply any property pledged or mortgaged to secure, or
otherwise securing, Senior Indebtedness, (iii) release any guarantor or any
other person liable in any manner for the Senior Indebtedness, (iv) exercise or
refrain from exercising any rights against Borrower or any other person, (v)
apply any sums by whomever paid or however realized to Senior Indebtedness or
(vi) take any other action that might be deemed to impair in any way the rights
of the holder of this Note. Any and all of such actions may be taken by the
holders of Senior Indebtedness without incurring responsibility to Holder and
without impairing or releasing the obligations of Holder to the holders of
Senior Indebtedness.
(i) Certain Rights in Bankruptcy. Holder hereby irrevocably authorizes and
----------------------------
empowers each holder of Senior Indebtedness (and its representative or
representatives) to demand, ▇▇▇ for, collect and receive all payments and
distributions under the terms of this Note, to file and prove all claims
(including claims in bankruptcy) relating to this Note, to exercise any right to
vote arising with respect to this Note and any claims hereunder in any
bankruptcy, insolvency or similar proceeding and take any and all other actions
in the name of Holder (solely in its capacity as a holder of this Note), as such
holder of Senior Indebtedness determines to be necessary or appropriate.
(j) Subrogation. No payment or distribution to any holder of Senior
------------
Indebtedness pursuant to the provisions of this Note shall entitle Holder to
exercise any right of subrogation in respect thereof until (i)(x) all Senior
Indebtedness shall have been paid in full in cash or other immediately available
funds or in any
XVIII-5
other manner satisfactory to all holders of Senior Indebtedness, (y) all
commitments to lend under Senior Indebtedness shall have been terminated and (z)
all guarantees constituting Senior Indebtedness shall have been terminated or
(ii) all holders of Senior Indebtedness have consented in writing to the taking
of such action.
(k) Relative Rights. The provisions of this Section X are for the benefit of
----------------
the holders of Senior Indebtedness (and their successors and assigns) and shall
be enforceable by them directly against Holder. Holder acknowledges and agrees
that any breach of the provisions of this Section X will cause irreparable harm
for which the payment of monetary damages may be inadequate. For this reason,
Holder agrees that, in addition to any remedies at law or equity to which a
holder of the Senior Indebtedness may be entitled, a holder of the Senior
Indebtedness will be entitled to an injunction or other equitable relief to
prevent breaches of the provisions of this Section X and/or to compel specific
performance of such provisions. The provisions of this Section X shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of Senior Indebtedness is rescinded or must otherwise be returned by any holder
of Senior Indebtedness upon the occurrence of a Bankruptcy Event or otherwise,
all as though such payment had not been made. The provisions of this Section X
are not intended to impair and shall not impair as between Borrower and Holder,
the obligation of Borrower, which is absolute and unconditional, to pay Holder
all amounts owing under this Note.
(l) Reliance on Orders and Decrees. Subject to the provisions of Section
-------------------------------
X(d) hereof, upon any payment or distribution of assets of Borrower, whether in
cash, property, securities or otherwise, Holder shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to Holder for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Section
X.
XVIII-6
EXHIBIT XIX
[FORM OF BORROWING BASE CERTIFICATE]
BORROWING BASE CERTIFICATE
The undersigned, being the Chief Financial Officer of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental,
L.P., a Pennsylvania limited partnership (the "Company"), hereby certifies as to
the following:
II. ELIGIBLE COLLATERAL
A. Accounts Receivable
1. Aggregate face amount of Borrower's Accounts $_____
2. Ineligibles/Deductions
(a) Discounts, claims, charges and allowances of any nature _____
(b) Sales to Affiliates _____
(c) Accounts unpaid 90 days or more after invoice date or "dated
Accounts" more than 30 days past due or 180 days past
invoice date _____
(d) Accounts owing by any debtor which has more than 50%
of other Accounts in 2c above _____
(e) Excess by which the Accounts of any single account debtor
constitutes more than 15% of aggregate Accounts _____
(f) Creditors of Borrower/Disputed Accounts/Set-Off _____
(g) Bankruptcy _____
(h) Foreign invoices (unless supported by guaranty of L/C) _____
(i) ▇▇▇▇-and-hold, sale-and-return, etc. _____
(j) Government account debtor _____
(k) Non-delivered or rejected goods _____
(l) Accounts determined ineligible by Administrative Agent _____
Total Ineligibles/Deductions: _____
3. Eligible Accounts Receivable (IA1-IA2) $_____
4. Eligible Accounts Receivable Advance Rate 85%
5. Available Eligible Accounts Receivable (IA3xIA4) $_____
XIX-1
XIX-2
B. Parts and Supplies
------------------
1. Gross Value of Borrower's Parts and Supplies Inventory $_____
2. Ineligibles/Deductions
(a) Fluids and other deminimus amounts _____
(b) Inventory located on leased property and no landlord waiver _____
(c) Inventory subject to other Liens _____
(d) Inventory in foreign location _____
(e) Obsolete or slow moving Inventory _____
(f) Inventory determined ineligible by Administrative Agent _____
Total Ineligibles/Deductions _____
3. Eligible Parts and Supplies Inventory (IB1-IB2) $_____
4. Eligible Parts and Supplies Inventory Advance Rate 75%
5. Available Eligible Parts and Supplies Inventory (IB3xIB4) _____
C. Cranes and Lifting Equipment
----------------------------
1. Orderly Liquidation Value of Cranes and Lifting Equipment (see
attached schedule and/or summary of changes from last Borrowing
Base Certificate) $_____
2. Ineligibles/Deductions
(a) Cranes and Lifting Equipment located on leased property and
no landlord waiver _____
(b) Cranes and Lifting Equipment subject to other Liens _____
(c) Cranes and Lifting Equipment in foreign location _____
(d) Obsolete or slow moving Cranes and Lifting Equipment _____
(e) Cranes and Lifting Equipment determined ineligible by
Administrative Agent _____
Total Ineligibles/Deductions _____
3. Eligible Cranes and Lifting Equipment (IC1-IC2) $_____
4. Eligible Cranes and Lifting Equipment Advance Rate 100%
XIX-3
5. Available Eligible Cranes and Lifting Equipment (IC3xIC4) $_____
D. Trucks and Trailers
-------------------
1. Orderly Liquidation Value of Trucks and Trailers (see attached
Schedule and/or summary of changes from last Borrowing Base
Certificate _____
2. Ineligibles/Deductions
(a) Trucks and Trailers located on leased property and no landlord
waiver _____
(b) Trucks and Trailers subject to other Liens _____
(c) Trucks and Trailers in foreign location _____
(d) Obsolete or slow moving Equipment _____
(e) Trucks and Trailers determined ineligible by Administrative
Agent - Improper Title _____
Total Ineligibles/Deductions _____
3. Eligible Trucks and Trailers (ID1-ID2) $_____
4. Eligible Trucks and Trailers Advance Rate 75%
5. Available Eligible Trucks and Trailers (ID3xID4) $_____
E. Excavation Equipment
--------------------
1. Orderly Liquidation Value of Excavation Equipment.
2. Ineligible/Deductions
(a) Excavation Equipment located on leased property and no
waiver from landlord.
__________
(b) Excavation Equipment subject to other Liens
__________
(c) Excavation Equipment in foreign locations
__________
(d) Excavation Equipment that is obsolete
(e) Excavation Equipment that is not available for use,
rent or lease
___________
XIX-4
(f) Excavation Equipment that does not conform
to Collateral Warranties
(g) Excavation Equipment determined ineligible by
Administrative Agent
____________
3. Eligible Excavation Equipment
(IE1-IE2)
XIX-5
4. Eligible Excavation Equipment Advance Rate
75%
5. Available Eligible Excavation Equipment ____________
(IE3xIE4)
XIX-6
III. ADJUSTED BORROWING BASE
A. Borrowing Base Amount
---------------------
(IA5 + 1B5 + 1C5 + 1D5 + 1E5): $_____
B. Adjustments pursuant to Schedule 1.1(i):
----------------------------------------
(see attached Schedule) _____
C. Adjusted Borrowing Base Amount _____
------------------------------
D. Total Utilization of Commitments _____
--------------------------------
E. Net Borrowing Availability
--------------------------
(the lesser of (x) IIC and (z) IIC minus IID) $
=====
XIX-7
This Borrowing Base Certificate is made and delivered as of ______
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
BY: ACR Management, LLC,
its General Partner
By:______________________________
Title: Chief Financial Officer
XIX-8
EXHIBIT XX
[FORM OF ACKNOWLEDGMENT AND CONSENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
ACKNOWLEDGMENT AND CONSENT
This ACKNOWLEDGMENT AND CONSENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Acknowledgment and Consent") is dated as of July __, 1999 and entered
into by the undersigned, and is made with reference to that certain Amended and
Restated Credit Agreement dated as of the date hereof (the "Amended Credit
Agreement"), by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental, L.P. ("Company"), ▇▇▇▇▇▇▇ ▇▇▇▇▇
Rental Holdings, L.P. ("Holdings"), the lenders party thereto (the "Lenders"),
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent and Lead
Arranger, DLJ Capital Funding, Inc. ("DLJ"), as Documentation Agent, and Fleet
National Bank ("Fleet"), as Administrative Agent and Collateral Agent for
Lenders, which amends and restates that certain Credit Agreement dated as of
July 22, 1998 (as amended, restated, supplemented or otherwise modified prior to
the date hereof, the "Existing Credit Agreement"), by and among Company,
Holdings, the Lenders, GSCP, DLJ and Fleet. Capitalized terms used therein
without definition shall have the same meanings herein as set forth in the
Amended Credit Agreement.
Company is a party to the Pledge and Security Agreement, as amended
through the Effective Date, pursuant to which Company has created Liens in favor
of Administrative Agent on certain Collateral to secure the Obligations. Each
of the Persons indicated as Holdings Guarantors on the signature pages hereof
(each, a "Holdings Guarantor") is a party to the Holdings Guaranty, and where
applicable, the Pledge and Security Agreement, as amended through the Effective
Date, pursuant to which such Holdings Guarantor has (i) guaranteed the
Obligations and (ii) created Liens in favor of Administrative Agent on certain
Collateral to secure the obligations of such Holdings Guarantor under the
Holdings Guaranty. Each of the Persons indicated as Subsidiary Guarantors on
the signature pages hereof (each, a "Subsidiary Guarantor") is a party to the
Subsidiary Guaranty, and where applicable, the Pledge and Security Agreement, as
amended through the Effective Date, pursuant to which such Subsidiary Guarantor
has (i) guaranteed the Obligations and (ii) created Liens in favor of
Administrative Agent on certain Collateral to secure the obligations of such
Subsidiary Guarantor under the Subsidiary Guaranty. Company, Holdings
Guarantors and Subsidiary Guarantors are collectively referred to herein as the
"Credit Support Parties," and the Holdings Guaranty, Subsidiary Guaranty and the
Pledge and Security Agreement are collectively referred to herein as the "Credit
Support Documents."
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Amended Credit Agreement and consents to the
amendment and restatement of the Existing Credit Agreement effected pursuant to
the Amended Credit Agreement. Each Credit Support Party hereby confirms that
each Credit Support Document to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or secure, as the case
may be, to the fullest extent possible, the payment and performance of all
"Guaranteed Obligations" and "Secured Obligations," as the
XX-1
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance of
all such "Guaranteed Obligations" or "Secured Obligations," as the case may be,
in respect of the Obligations of Company now or hereafter existing under or in
respect of the Amended Credit Agreement and the Notes defined therein. Without
limiting the generality of the foregoing, each Credit Support Party hereby
acknowledges and confirms the understanding and intent of such party that, upon
the Effective Date, the definition of "Obligations" contained in the Amended
Credit Agreement includes the obligations of Company under the Term Notes.
Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability and shall not be impaired or limited by the execution
or effectiveness of this Acknowledgment and Consent.
Each Credit Support Party (other than Company and Holdings) acknowledges
and agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Acknowledgment and Consent, such Credit Support Party is not required by
the terms of the Credit Agreement or any other Loan Document to consent to the
amendments to the Credit Agreement effected pursuant to this Acknowledgment and
Consent and (ii) nothing in the Credit Agreement, this Acknowledgment and
Consent or any other Loan Document shall be deemed to require the consent of
such Credit Support Party to any future amendments to the Credit Agreement.
THIS ACKNOWLEDGMENT AND CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE
UNDERSIGNED SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
[Remainder of page intentionally omitted]
XX-2
IN WITNESS WHEREOF, the undersigned have caused this Acknowledgment and
Consent to be duly executed and delivered by their respective officers thereunto
duly authorized as of the date first written above.
COMPANY: ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: ACR Management, LLC, its general partner
By: ________________________________
Name:
Title:
HOLDINGS
GUARANTORS: ▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDINGS CAPITAL CORPORATION
By: ________________________________
Name:
Title:
ACR MANAGEMENT LLC
By: ________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By: ACR Management, LLC, its general partner
By: ________________________________
Name:
Title:
S-1
SUBSIDIARY
GUARANTORS: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL, L.P.
By: ▇▇▇▇▇▇▇ International Equipment Services
Corporation, its general partner
By: ________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SALES AND LEASING, L.P.
By: ▇▇▇▇▇▇▇ Sales & Leasing Corporation, its general
partner
By: ________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
By: ________________________________
Name:
Title:
S-2
Notice Address for Company and each of the
foregoing Holdings and Subsidiary Guarantors:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ Capital, Inc.
Two ▇▇▇▇▇▇ Place
Boston, MA 02116
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-3